You are completely missing the point. Because they have money to begin with the have the money to invest. For example, buying a home instead of paying twice as much to live in a motel because you can’t get a loan because you weren’t born with wealth.
The principal is about the cost of poverty. It’s not meant to be taken literally.
…ish. My wife and I just did this calculation and (at least in America) property taxes throw a wrench into it.
A decent rental home in Texas costs about $2650 per month. A similar house costs about $460k to buy, and run about $1000/mo in taxes. So you’ll only save about $1650 per month.
Even putting that 460k into a bank account at 4.5% interest will give you $1725/mo, let alone stocks, index funds, and all the other investments you could be doing that will out-perform real estate.
Of course, that doesn’t disprove your point about poverty since you need to have the money to buy/invest. But it’s just a reminder that houses are not the wealth builder that a lot of people imagine them to be.
Always research and determine the best option for your financial situation. Gate-keeping financial literacy is another tool the wealthy use to keep people in poverty.
And that’s not even getting into the realities that it was a statement made some 30, 40 years ago(?) and the qualities of “quality” can shift in much less time than that.
You are completely missing the point. Because they have money to begin with the have the money to invest. For example, buying a home instead of paying twice as much to live in a motel because you can’t get a loan because you weren’t born with wealth.
The principal is about the cost of poverty. It’s not meant to be taken literally.
Exactly. To use another example it’s cheaper to simply own your home outright than to pay rent for the rest of your life.
…ish. My wife and I just did this calculation and (at least in America) property taxes throw a wrench into it.
A decent rental home in Texas costs about $2650 per month. A similar house costs about $460k to buy, and run about $1000/mo in taxes. So you’ll only save about $1650 per month.
Even putting that 460k into a bank account at 4.5% interest will give you $1725/mo, let alone stocks, index funds, and all the other investments you could be doing that will out-perform real estate.
Of course, that doesn’t disprove your point about poverty since you need to have the money to buy/invest. But it’s just a reminder that houses are not the wealth builder that a lot of people imagine them to be.
Always research and determine the best option for your financial situation. Gate-keeping financial literacy is another tool the wealthy use to keep people in poverty.
And that’s not even getting into the realities that it was a statement made some 30, 40 years ago(?) and the qualities of “quality” can shift in much less time than that.