People got mad at me for my real estate comments

I posted this and got some very angry responses, which made me laugh, so I want To view this email as a web page, [click here]() {NAME}, I posted this and got some very angry responses, which made me laugh, so I want to show you. [Ramit post] [See replies here]() As you know, I talk about how renting can be a better financial decision than owning a house, and that you should run the numbers carefully. (I’ve made more money renting for 15+ years than I ever would have by owning a house.) Basically, you need to run the numbers on the biggest purchase of your life. Predictably, this gets people very, very mad. There’s nothing like someone telling Americans that their primary religion -- real estate -- just might not be as profitable as they think. I love their anger. Once I start mentioning phrases like “inflation” and “opportunity cost” and “maintenance” -- basic phrases that anyone buying a multi-hundred-thousand-dollar house should understand fluently -- they become enraged. They start throwing around handy-dandy responses like: - “You’re throwing money away on rent!!!” - “Who wants to pay a landlord’s mortgage?!” - “Well, I bought in 1980 for $100,000 and just sold for $500,000. Can’t argue with results!!” (This one is so heartbreaking, I almost never reply. They genuinely think they made $400,000, even though they actually lost money.) These always make me laugh because they are very wrong and very sure of themselves. Today, I’ll share a few responses. Remember that I’m not anti-home ownership. I myself will buy one day ([here’s how I plan to buy a house]()). But know this: Sometimes renting can be a better financial decision. Sometimes owning can. For the biggest purchase of your life, I insist you run the numbers. --------------------------------------------------------------- Today’s newsletter is brought to you by: [Methodology](). 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But if you only live in the house for 4 years, that’s $18,750/year, or $1562.50/month in fees alone. People intuitively understand that if you drive your car off the lot, it instantly loses value. Why they don’t understand that houses work the exact same way blows my mind. [Response to Ramit's post] That’s fine! I’m not against owning, and I’m not against investing in real estate. (Two of my guests on [my Netflix show]() owned a property, which produced income every month. I told them great!) But Ma and Pa Jones, who randomly decide to buy a primary residence and then tell everyone “it’s an investment” are, shall we say, probably not very savvy with money. A true real estate investment involves spreadsheets, ratios, reserve funds. You buying a cool house with a basketball hoop and then renovating your kitchen because “marble is awesome” is probably not an investment. [Response to Ramit's post] I used to think that I would feel good when people found out I was right decades later. Now that I’ve been writing my material for 20 years, I get a lot of these stories. Unfortunately, I hate knowing that some people end up in less-than-great financial situations. I would rather people be financially secure. Here’s something to think about: I never want to set my life up so ONE FINANCIAL MOVE could ruin me. If 80% of my net worth is in a single illiquid property, that would terrify me! What happens if my house gets flooded? You see this in real estate a lot, especially developers. They’ll be making tons of money every year...and then suddenly, they’re bankrupt. Not for me. [Response to Ramit's post] Agreed. Simply not knowing where you’re going to be in 10 years doesn’t mean buying is a bad decision. But it significantly raises the bar for buying over merely renting. To put it another way, if you were only going to live someplace for 1 year, you’d rent. What changes after 10 years? If the answer is “knowing where I’ll be in 10 years is hard,” that’s not an acceptable answer. You need to understand an amortization table, which will show how you barely pay your principal in the first 10 years. You’re mostly paying interest! I posted about this on social media and people got mad at me. However, I know I’m right. [Response to Ramit's post] This is what people say after a bull run for 15+ years. They call me a boomer (lol), they say I’m out of touch, and when they go bankrupt, they delete all their posts. Many of the crypto bros did the same thing. Good luck. Btw, you don’t have to put 20% down. But you should be able to. And if not, you should be able to carefully answer why. What will happen if you face a sudden expensive repair? What if one of you loses their job? If you couldn’t save before, why are you magically going to be able to save now? No answer? Oh. Sorry, it’s just me asking BoOmEr QuEsTIoNs. [Response to Ramit] LOVE IT. You should not feel pressure to make the biggest purchase of your life!! You should be calm, cool, and collected. I see so many people in real estate subreddits -- especially in the last 2 years -- and it sounds like a collection of depressed incels and the perpetually morose. They use phrases like “depressed” and “I’ll never catch up” and “it’s too late for me” to describe their journey to buy a house. I’m like, THIS IS A FUCKIN WOOD STRUCTURE WITH 4 WALLS. It’s not your grandma. It’s not even your mangy dog. WE’RE TALKING ABOUT A CONSUMER GOOD. Some of these people don’t need a house, they need a hug. [Response to Ramit's post] This may literally be the worst comment on the planet. I won’t even dignify it with a response except to say this: The average net worth of caviar eaters is 102x higher than burger eaters. That's why I recommend you go and buy 2 tons of caviar. It will definitely make you wealthy. I actually [posted that]() to some guy who replied with even worse comments, which ended in me offering to fund his education at a community college to learn statistics. He did not take me up on the offer. [Response to Ramit's post] Someone once said to me, “30 years from now, your rent will be DOUBLE what it is today! Do you want to pay that??” I told him, if my rent is only double, that would be an amazing deal. What most people don’t understand is that in the same way you build up a portfolio, which pays your expenses when you retire, you could apply the same principle to housing, which your retirement funds could pay in perpetuity. Most people don’t do that, but it’s just math if that’s what you want. That guy never replied, btw. [Response to Ramit's post] Note that I never said renting is “better than owning”—but it can be. My favorite comments are also where someone tries to find “the catch” in who I am. They’ll say: - “Are you a landlord???” (No) - “How many properties do you own??” (None) - “Must be nice to be born to rich parents” (I wasn’t) When they try 2-3 of these accusations and they fail, they just walk away, never to reply again. [Response to Ramit's post] Yes, exactly. Thanks, [Signature] P.S. This week, I spoke to Jonathan and Shalom on my podcast. They rushed into buying a $730,000 house—and now Jonathan is losing sleep at night. Check out their fascinating story [here](). ["Our $730k home keeps me up at night"]()   You may be new to IWT. Here's all the stuff we offer [Programs]() [Podcast]() [Netflix show]() [Books]() [Check out our website for more]() Follow Ramit [ig]() [fb]() [tw]() [yt]() [pc]() Was this forwarded to you? Sign up [here](). This email was sent to [{EMAIL}](). If you no longer wish to receive these emails you may [unsubscribe]( at any time. 548 Market St #89946 San Francisco, CA 94104-5401