Quote:
Originally Posted by Lenny2
Who says you have to trade at all?
What if you buy a house and live there until you die?
Say your mortgage is $1500 a month, and you pay it off by the time you retire. That's the equivalent of $1500 a month in your pocket. You would need roughly $350K in treasury bills to earn that kind of interest income.
Plus if you rent for $1500 a month today, in 30 years rent on a comparable property will be more like $3000-4500 per month.
There are so many other advantages I can't even begin to list them here. The most basic of them is you're going to have to pay a monthly nut to live anywhere, and you have to live somewhere. Why would you pay rent instead of paying a mortgage that gives you tax benefits, builds equity, and allows you to realize the appreciation of the property?
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There more to house expenses than paying a mortgage. You also have to consider paying taxes, utilities, insurance and repairs and maintenance, and these expenses will continue to rise in time.
Also, renting an appartment is quite less than the sum of all the expenses of owning a house. If the person is discipline enough to invest the difference, I think he/she will be better off at retirement than the home owner.