Are Millennials making a mistake ?? (percent, properties, advantage, loan)
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My boss is trying to sell me on the idea of taking out a mortgage, why? Because she wants to me to be even more dependent on her. Right now my living expenses and liabilities are so low I can pick up and leave any time I want. Or if I did lose my job I wouldn't be totally stressed out. Freedom is very valuable even if you don't use it.. Buying a house in my personal situation would just trap me even more. What if I wanted to take a risk and start a business? With a mortgage I would be less risk adverse and play the safer route.
Ok a little bit too far down the conspiracy theory route now......
Ok a little bit too far down the conspiracy theory route now......
It's not a conspiracy, it's reality. When a women finds a good man she wants to tie him down by getting married and having babies with him or vice versa. Same thing with employers. The more bills and expenses your employee's have the more they depend on you, the more power you have over them. That's why a lot of people in this world have no choice but to succumb to work politics and kiss ass. Currently in my life yes I may need a job, but I have the luxury of not needing the one I have. Sure many people have a mortgage and still change jobs if they aren't happy at the one they are at, but it just makes the whole process harder and more stressful.
You are also taking one quote of mine out of context... I would have no problem being more needy and dependent on my job if I really loved my job and work. People work jobs they aren't particularly happy at and then think owning a home and driving a cool car will somehow compensate for it and fulfill them...
Uh so where is your argument home equity out performs a mutual fund
if we had our money tied up in a home we would not had the funds available to us to invest in far more lucrative deals . renting allowed us to make enough today to buy multiple homes with that amount .
renting is not about paying rent in vain . it is also if you have the choice , the ability to rent and invest large sums of money not sitting in a home
Last edited by mathjak107; 04-07-2017 at 09:06 AM..
Millennial here. I don't speak for all of us but I don't plan on buying a home for quite some time for three reasons:
1. I don't see home ownership as a financial investment. It's more like a step of settling down. When my parents were my age, they had two kids and a house. They chose to settle down early and had to make sacrifices. They didn't go to college and they chose dead-end careers with no advancement. I don't want that. I would rather finish grad school, get a stable career that I love, and pay off my student loans before making this investment.
2. I won't be able to justify having student loan debt and a mortgage. By the time I finish grad school, I will have $90k in student loan debt. I will be able to pay them off but owning a home will make it harder for me. Sure, I could find a mortgage payment equal to a rental payment but the hidden costs of home ownership make renting look more beneficial.
3. I don't want to be stuck in one city/town. If I were to buy a home, I would have to live there for 5-10 years in order to justify the purchase to myself. Renting offers a freedom of being able to pack up and move if I decide that I don't like where I'm living.
Millennial here. I don't speak for all of us but I don't plan on buying a home for quite some time for three reasons:
1. I don't see home ownership as a financial investment. It's more like a step of settling down. When my parents were my age, they had two kids and a house. They chose to settle down early and had to make sacrifices. They didn't go to college and they chose dead-end careers with no advancement. I don't want that. I would rather finish grad school, get a stable career that I love, and pay off my student loans before making this investment.
2. I won't be able to justify having student loan debt and a mortgage. By the time I finish grad school, I will have $90k in student loan debt. I will be able to pay them off but owning a home will make it harder for me. Sure, I could find a mortgage payment equal to a rental payment but the hidden costs of home ownership make renting look more beneficial.
3. I don't want to be stuck in one city/town. If I were to buy a home, I would have to live there for 5-10 years in order to justify the purchase to myself. Renting offers a freedom of being able to pack up and move if I decide that I don't like where I'm living.
None of those factors was different for earlier generations. The only difference with Millennials is the proportion of the generation for whom those factors are primary.
Research is showing that the millennial generation is forgoing the once cherished tradition of purchasing a home. For many of us 'Baby Boomers' our greatest asset is the equity we have built up over the years by buying rather than renting. In my case several hundred thousand thousand dollars. If I had chosen to rent through the years and perhaps taken the easy route (no maintenance, freedom to move at will, etc) I probably would have payed about the same in rent as I did in mortgage.
I can see singles or childless opting for urban rentals and walk to work and bars but I can't really understand why families would choose to rent.
Lots of very smart folks on this CD forum so I would appreciate insight. Maybe things have changed and I am looking at things totally wrong.
I'm also a millennial. I cant afford to buy a home here in NYC, not even in the whole tri state area unless if I plan to live an hour or more away from NYC. I have thoughts about moving to DC area, but that too is also expensive. The only issue with me is that I don't have that college debt that most Millennials have due to attending a public college, plus with a good fico and credit report scores. Renting sucks, especially since I pay near market rate prices here in NYC. What I pay in rent can cover mortgage, utility bills, taxes, car notes, gas for home and cars combined in generic middle America. Another big problem with millennials is the liberal push of moving to big cities such as San Francisco, NYC, DC, LA, Boston and such. THese cities have expensive rents for such a small place to dwell in.
What can help millennials out for future economic growth? A better job market. Even though their are talks about job growth and jobs added. Most of these jobs do not pay well enough to sustain a livelihood, and to pay for a home purchase in the future. Often folks need to work two jobs to get by. Another thing is parents of millennials such as boomers. When the boomers begin to die off, boomers will leave billions and billions of assets left over to their kids. Last, maybe hope inflation slows instead of rising faster. Rents, utilities college prices have gone up to keep up with inflation in recent years. Thus this hurts millennials prospects for the future.
1. I don't see home ownership as a financial investment. It's more like a step of settling down.
I also see landline phones (POTS or VOIP) becoming popular with Millennials as symbolic of settling down. Mobile phone numbers are disposable, while landline numbers are more permanent and geographically tied.
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3. I don't want to be stuck in one city/town. If I were to buy a home, I would have to live there for 5-10 years in order to justify the purchase to myself. Renting offers a freedom of being able to pack up and move if I decide that I don't like where I'm living.
Not just in one city/town but a part of a major metro area. Exxon and Shell moved out of Downtown Houston recently. Exxon moved to the northern suburbs, Shell moved to West Houston. If you lived in Katy, west of Houston, Shell's move was favorable while Exxon was more detrimental. If you lived in The Woodlands, the opposite would be true.
The detrimental option would be sitting in bumper-to-bumper rush hour traffic or paying tolls to drive on the Grand Parkway to bypass the city-bound traffic to reach the other suburb. The only other way out of this without changing jobs or housing is to live in the city centre.
Speaking of living in the city centres, land is becoming scarce that the only way to build is up, whether apartments or condos. There is not enough room for single-family housing in the city. Wasting time and gas in soul-crushing bumper-to-bumper traffic for a single-family house in the suburbs is undesirable for millennials who are used to convenience and lightning speed from their online exploits. In addition, gasoline prices are starting to rise again forcing people to make wise decisions such as vehicle size and length of commute. Some young people are foregoing automobile ownership, relying on public transit and Uber/Lyft/etc. for transportation.
Millennial here. I don't speak for all of us but I don't plan on buying a home for quite some time for three reasons:
1. I don't see home ownership as a financial investment. It's more like a step of settling down. When my parents were my age, they had two kids and a house. They chose to settle down early and had to make sacrifices. They didn't go to college and they chose dead-end careers with no advancement. I don't want that. I would rather finish grad school, get a stable career that I love, and pay off my student loans before making this investment.
2. I won't be able to justify having student loan debt and a mortgage. By the time I finish grad school, I will have $90k in student loan debt. I will be able to pay them off but owning a home will make it harder for me. Sure, I could find a mortgage payment equal to a rental payment but the hidden costs of home ownership make renting look more beneficial.
3. I don't want to be stuck in one city/town. If I were to buy a home, I would have to live there for 5-10 years in order to justify the purchase to myself. Renting offers a freedom of being able to pack up and move if I decide that I don't like where I'm living.
Speaking as a boomer and a home owner, I think your plan is just fine. One debt at a time. Far too many people sell themselves into debt slavery and end up spending a large percentage of their incomes on interest payments. I'm firmly in favor of being debt free. If you really want flexibility in life, avoid having to make payments, on anything.
You don't have to start in kindergarten to be a homeowner. I didn't buy my first home until I was 30, and then lost everything in the 1980 recession and a divorce. Start over, and I bought my second home when I was 40. It was an unlivable dump, but all I could afford. It had potential, and 8 years later, with some work, I sold it for 2x what I paid for it. That gave me the down for the place I live now. The original mortgage was 8%, so when rates dropped I took the opportunity to refi on a 15 year note, and paid it off.
Your horizon is just fine. Many people can't think past their next paycheck, or the end of the month. You are planning to have a graduate degree and no student debt. It's a good plan. Home ownership will probably happen for you eventually, but doing it before the ink is dry on your degree would be a bad choice.
I also see landline phones (POTS or VOIP) becoming popular with Millennials as symbolic of settling down. Mobile phone numbers are disposable, while landline numbers are more permanent and geographically tied.
I feel so weird when I call a landline phone. It's as odd as seeing someone write a check at the grocery store.
if we had our money tied up in a home we would not had the funds available to us to invest in far more lucrative deals . renting allowed us to make enough today to buy multiple homes with that amount .
renting is not about paying rent in vain . it is also if you have the choice , the ability to rent and invest large sums of money not sitting in a home
The key to this strategy is CHEAP rent, if rental rates on a 2 bed room tight condo is the same as a mortgage on a single family home then your strategy falls apart. Either that or you have to live in a camper or motor home or with family etc.
Either that or you are renting and working in a cheap area and investing somewhere else to live but that means you have to have the jobs skills to be able to land a job in said area you are investing in when your ready to make the jump unless you are simply retiring early.
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