Quote:
Originally Posted by DareRing
I am advocating actual ownership, not renting from the bank. Unless you mean that the government could confiscate my property from me for some unimaginable reason, but such a circumstance is sort of irrelevant to this discussion, isn't it?
I sympathize with the wage-slaves who won't ever own but, for the sake of this thread, if you make enough money to play in the stock market then you make enough money to own your home.
My first house was a cheap little thing I bought 6 years ago for $100K and I was able to pay that off very quickly simply by not wasting money. All it took was a few years of saving everywhere possible. Don't buy new cars, don't buy silly gadgets, or xbox, playstation, games, CDs, DVDs, memorabilia, etc. Limit going out to the movies, concerts, sporting events, vacations. You don't need the newest computer or cell phone. Your old clothes still fit. Don't eat out, don't smoke, don't go gambling, don't spend more than you need to live. No impulse purchases. Imagine how all this little stupid shit you don't need adds up. When you have a good income, but live modestly, you'd be surprised at how fast you can save. And as I saved more, I moved up to better property. The only time since then that I've ever had to borrow (temporarily) was when I was flipping, but I never risked my own home.
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Everything you said is great but there is nothing wrong with borrowing. Borrowing allows you to gain leverage and you can do a lot more at one time.
Unless I hit the power ball I will always borrow money, I don't care if I make 10 million a year. I like making money off of the bank's money. If I can borrow at say 8% and get a return of 12% than I am making 4% off the BANK's money, not my own. I can do that x 10.
Absolutly nothing wrong with borrowing money. Say you pay cash for an investment, so now you are tieing up a lot of your money to save what 8% interest fees, not to mention if you had a loan you could deduct the interest, so your money is making very little for you if you pay cash for something. Instead of taking 100K and buying 1 house cash, buy 5, 100K houses and put 20K down on each (20% typically required for investment property purchases and to insure a better interest rate.) it's all about leverage and making money off of the bank's money.