Comments on: I have zero debt. Am I weird? http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/ Where personal finance & frugal living are sexy, delicious, and fun. Mon, 15 Mar 2010 04:19:13 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: How to win the Rent Vs Own argument http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/comment-page-1/#comment-23781 How to win the Rent Vs Own argument Fri, 20 Nov 2009 15:04:50 +0000 http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/#comment-23781 When you rent you will inevitably encounter those who feel they should convince you that making payments a house is better than paying rent. Here is how I win these arguments. 1. When you rent you don't pay: Mortgage Interest, Insurance, Property Taxes, Repair Cost, or Excess Bills such as a higher power bill due to so many rooms in the house Or the fact that Cable and Internet are often available for FREE when you rent along with water/sewer, pest control. etc. There are many reasons why RENTING means LESS $$$ out of your pocket over a 1 year period. But when you sell you get ALL that money back and some!! This statement is ONLY true if you keep the house for 10+ years and even then if you add in ALL the cost associated with living in the house and keeping it maintained this is a FALSE statement. You'll be lucky if you break even when you sell. But Houses always go up on value... True, but the longer you keep a house the more you have to spend on Maintenance Cost to keep the house in good condition. But Rent always Increases and when you own a house your payments stay the same.... PROPERTY TAXES increase over time just like rent, along with Insurance Rates and Maintenance Cost increases as well the longer you own the house. Sooner or later you WILL need a new roof, Hot water heater or new driveway. Rent does not ALWAYS go up... I have lived in the same Luxury Condo for 4 years and my rent has NEVER increased. But with a Mortgage you get the Income Deduction!!! This is total NONSENSE... You pay $1.00 in interest to save .10 on your taxes. This argument is easier now that the Housing Bubble burst in 2008... Many people are now DEEP in debt for a house that is dropping in value like the Titanic. When you rent you will inevitably encounter those who feel they should convince you that making payments a house is better than paying rent. Here is how I win these arguments.

1. When you rent you don’t pay: Mortgage Interest, Insurance, Property Taxes, Repair Cost, or Excess Bills such as a higher power bill due to so many rooms in the house Or the fact that Cable and Internet are often available for FREE when you rent along with water/sewer, pest control. etc. There are many reasons why RENTING means LESS $$$ out of your pocket over a 1 year period.

But when you sell you get ALL that money back and some!! This statement is ONLY true if you keep the house for 10+ years and even then if you add in ALL the cost associated with living in the house and keeping it maintained this is a FALSE statement. You’ll be lucky if you break even when you sell.

But Houses always go up on value… True, but the longer you keep a house the more you have to spend on Maintenance Cost to keep the house in good condition.

But Rent always Increases and when you own a house your payments stay the same…. PROPERTY TAXES increase over time just like rent, along with Insurance Rates and Maintenance Cost increases as well the longer you own the house. Sooner or later you WILL need a new roof, Hot water heater or new driveway. Rent does not ALWAYS go up… I have lived in the same Luxury Condo for 4 years and my rent has NEVER increased.

But with a Mortgage you get the Income Deduction!!! This is total NONSENSE… You pay $1.00 in interest to save .10 on your taxes.

This argument is easier now that the Housing Bubble burst in 2008… Many people are now DEEP in debt for a house that is dropping in value like the Titanic.

]]> By: RaspberrySwirl http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/comment-page-1/#comment-23483 RaspberrySwirl Sun, 15 Nov 2009 16:55:47 +0000 http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/#comment-23483 I too live simply, rent, avoid debt and save fanatically. Now that I'm 30, I'm noticing that others tend to think less of apartment dwellers in general (there are some very bad apartment communities in my area). Even though I live in a "luxury" complex, I'm still seen as somehow deficient for not having a house. I've had coworkers nag me for hours about how homes are so affordable here, and that a mortgage would be less than my rent is now, but they don't understand that I like the convenience renting brings. If I want to cut ties and move to europe, I could, whereas all of their money and time is tied up with keeping up their homes, repairs and renovations and protecting their property values. I also feel a lot safer up in my third floor loft with gates and security than I would in some of the neighborhoods here. I too live simply, rent, avoid debt and save fanatically. Now that I’m 30, I’m noticing that others tend to think less of apartment dwellers in general (there are some very bad apartment communities in my area). Even though I live in a “luxury” complex, I’m still seen as somehow deficient for not having a house. I’ve had coworkers nag me for hours about how homes are so affordable here, and that a mortgage would be less than my rent is now, but they don’t understand that I like the convenience renting brings. If I want to cut ties and move to europe, I could, whereas all of their money and time is tied up with keeping up their homes, repairs and renovations and protecting their property values. I also feel a lot safer up in my third floor loft with gates and security than I would in some of the neighborhoods here.

]]> By: Martin777 http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/comment-page-1/#comment-23480 Martin777 Sun, 15 Nov 2009 14:07:15 +0000 http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/#comment-23480 Owning a House is a lot like Gambling, the Longer you play the game the more likely you are to loose money!! The longer you live in your house the more likely you are to need a major repair that is going to cost you a LOT of money. Once you make that first repair, your "invested" so if anything else breaks, well you'll just have to fix that as well because you've already lost XXX Dollars on the last repair... It's a never ending cycle of Fixing, Spending, Borrowing more money and trying to stay ahead of the fact that your house is falling apart. Your only hope is to sell it NOW before something else needs to be fixed but if you want to sell it, it has to PASS A HOME INSPECTION so you better spend a little more to get it PERFECT if you want to sell it... Yea, it would be cheaper to just stay where you are than move.. The cycle continues. Cost of owning a house: 1. Mortgage Interest on the loan. 2. Property Taxes 3. Property Insurance 4. Full Utility bills for a large house with many rooms. 5. Maintenance cost including ALL repairs on AC, Pluming, electrical, ROOF, Foundation, etc. 6. Any necessary Updates to keep the house current. 7. ALL Appliance replacement and Repair cost 8. Real Estate Fees and Closing Cost when selling. 9. Moving Cost I'm so glad I RENT...;) Owning a House is a lot like Gambling, the Longer you play the game the more likely you are to loose money!! The longer you live in your house the more likely you are to need a major repair that is going to cost you a LOT of money. Once you make that first repair, your “invested” so if anything else breaks, well you’ll just have to fix that as well because you’ve already lost XXX Dollars on the last repair… It’s a never ending cycle of Fixing, Spending, Borrowing more money and trying to stay ahead of the fact that your house is falling apart. Your only hope is to sell it NOW before something else needs to be fixed but if you want to sell it, it has to PASS A HOME INSPECTION so you better spend a little more to get it PERFECT if you want to sell it… Yea, it would be cheaper to just stay where you are than move.. The cycle continues.

Cost of owning a house:

1. Mortgage Interest on the loan.
2. Property Taxes
3. Property Insurance
4. Full Utility bills for a large house with many rooms.
5. Maintenance cost including ALL repairs on AC, Pluming, electrical, ROOF, Foundation, etc.
6. Any necessary Updates to keep the house current.
7. ALL Appliance replacement and Repair cost
8. Real Estate Fees and Closing Cost when selling.
9. Moving Cost

I’m so glad I RENT…;)

]]> By: Fox http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/comment-page-1/#comment-23388 Fox Fri, 13 Nov 2009 04:11:50 +0000 http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/#comment-23388 @It's lonely at the TOP -- You rock. Sock that moolah away and stay lonely without the debt. I'll be lonely with you. ;) @It’s lonely at the TOP — You rock. Sock that moolah away and stay lonely without the debt. I’ll be lonely with you. ;)

]]> By: It's lonely at the TOP. http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/comment-page-1/#comment-23387 It's lonely at the TOP. Fri, 13 Nov 2009 03:35:45 +0000 http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/#comment-23387 Yes, it's lonely at the TOP... Only about 1% of Americans live the way you describe. My wife and I live in a small 1 bedroom apartment. EVERYONE keeps telling us to buy a house or get a 2/3 bedroom apartment... YEA RIGHT.. We pay $750 for a LUXURY apartment with washer+dryer, Cable, High speed WiFi, water, pest control, ZERO: Taxes, Insurance, Maintenance. Etc. etc. It would be STUPID for us to purchase a house when we can live the way we do for only $750 per month. Together my wife and I earn about $75,000 per year so you can imagine the $$$$ we accumulate with no kids. I see us retiring in another 5 years and traveling the WORLD. Screw those who cannot see the reality of DEBT. We are 100% DEBT FREE at 37 years old. Yes, it’s lonely at the TOP… Only about 1% of Americans live the way you describe.

My wife and I live in a small 1 bedroom apartment.

EVERYONE keeps telling us to buy a house or get a 2/3 bedroom apartment… YEA RIGHT..

We pay $750 for a LUXURY apartment with washer+dryer, Cable, High speed WiFi, water, pest control, ZERO: Taxes, Insurance, Maintenance. Etc. etc.

It would be STUPID for us to purchase a house when we can live the way we do for only $750 per month.

Together my wife and I earn about $75,000 per year so you can imagine the $$$$ we accumulate with no kids.

I see us retiring in another 5 years and traveling the WORLD.

Screw those who cannot see the reality of DEBT.

We are 100% DEBT FREE at 37 years old.

]]> By: dlm http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/comment-page-1/#comment-14567 dlm Tue, 26 May 2009 20:45:11 +0000 http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/#comment-14567 You're absolutely right about renting being better than buying. We bought in the last couple years after renting forever because we thought it was then or never. Can't wait for the market to improve to sell and break even. Renting is much less expensive and doesn't leave you stuck. Condos are horrible dealing with trying to get agreement on budgets etc. There is no recourse (other than the provincial supreme court in two years) if you disagree. At least if you hate your job you get away from it at night. We have the wrong personality for communal living. And a house we bought had screaming screaming kids move in next door. Took us a year to sell away from that. You’re absolutely right about renting being better than buying. We bought in the last couple years after renting forever because we thought it was then or never. Can’t wait for the market to improve to sell and break even. Renting is much less expensive and doesn’t leave you stuck. Condos are horrible dealing with trying to get agreement on budgets etc. There is no recourse (other than the provincial supreme court in two years) if you disagree. At least if you hate your job you get away from it at night. We have the wrong personality for communal living. And a house we bought had screaming screaming kids move in next door. Took us a year to sell away from that.

]]> By: Betsy Bargain http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/comment-page-1/#comment-9805 Betsy Bargain Tue, 03 Mar 2009 03:20:22 +0000 http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/#comment-9805 I agree with you that avoiding debt is the key to thriving financially. The only debt I have is a mortgage on a rental property. I view it as an investment. It just breaks even now, but someday it will pay my bills. I agree with you that avoiding debt is the key to thriving financially. The only debt I have is a mortgage on a rental property. I view it as an investment. It just breaks even now, but someday it will pay my bills.

]]> By: S http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/comment-page-1/#comment-6106 S Mon, 10 Nov 2008 20:43:13 +0000 http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/#comment-6106 It is really easy. Make sure at all times Assets > Liabilities. Then use 100% of the extra money to purchase more Assets. And Assets are very strictly defined by this maxim. Something that brings you money on a regular basis. If it costs you something, or less then what it brings you it is a liability. It is really easy.

Make sure at all times Assets > Liabilities.

Then use 100% of the extra money to purchase more Assets.
And Assets are very strictly defined by this maxim.
Something that brings you money on a regular basis.

If it costs you something, or less then what it brings you it is a liability.

]]> By: last-minute-stef http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/comment-page-1/#comment-1955 last-minute-stef Sat, 19 Jul 2008 22:14:30 +0000 http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/#comment-1955 A friend of mine told me "... it's not about how much you make but how much you SAVE." An obvious truth I never want to forget. Great Post! A friend of mine told me “… it’s not about how much you make but how much you SAVE.” An obvious truth I never want to forget.

Great Post!

]]> By: Readyforaction » squawkfox - great advice http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/comment-page-1/#comment-804 Readyforaction » squawkfox - great advice Fri, 25 Apr 2008 15:35:17 +0000 http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/#comment-804 [...]  http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/ [...] [...]  http://www.squawkfox.com/2008/01/25/i-have-zero-debt-am-i-weird/ [...]

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