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Response to Gormy Cuss (Reply #26)

Mon Feb 9, 2015, 01:07 PM

43. I suppose if you have cash to invest elsewhere, buying or renting is neutral

either way your cash is free to invest. The advantage of renting is mobility, the lack of which trapped a lot of people in the last recession when jobs were elsewhere and the housing market went south.

Maybe I'm old-fashioned in thinking that going 500k into debt just to have a place to live isn't a good choice for most people, especially if the debt is more or less perpetual (interest only). If inflation kicks up, it might wind up being a good choice. If the home value remains stagnant, then you have to earn more on your investment income than you are paying on your loan to get ahead; that's a risky bet either way. I guess I'm risk-averse, and see the least risk in living within my means, however meager that might be. Its hasn't worked out badly for me, though I drive an old car, live in an old house, work hard. Most of my plan is to retire without debt, which should happen. I won't have much of a cash-cushion, but being debt-free should provide options.

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LineLineLineReply I suppose if you have cash to invest elsewhere, buying or renting is neutral
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