*to Hanlon's razor: Never attribute to malice that which is adequately explained by stupidity.

Thursday, 24 April 2014

'You're throwing away your money on rent!'

Said the Toronto women who wouldn't date me, because I was a 'renter'.  Hope the man they made castrato likes 'throwing away [his] money on' mortgage.  The first chart says all you need to know.

The next chart explains why I am over forty without a house: I entered financial stability with a teaching degree in 1999.  Just when the prices took off, nobody yet knowing that, and at the bottom of my payscale, something like 60% of where I am now.  Did I mention I had student loans?

This chart shows why I am not going to enter for a little while: note 2006.



  1. I am a proud renter. For financial reasons and I have no desire to plant myself permanently.... or have the hassle of having to rent out a home I would own. The only foreseeable future for me owning is when my sister dies, she is leaving me her house. She is younger than me and I don't see that happening any time soon, she JUST turned 30.

  2. If you've got 5 years to spend somewhere and can find a cheap fixer-upper in a location that suits you, and you're ok with DIY stuff, buying, upgrading, and then selling when the market turns for the better is not a bad idea.

  3. The one pro-buying argument that I can follow is that to paying for a mortgage is some sort of "forced saving". Meaning that it forces one to be disciplined and not spend money on unnecessary things.
    But that's only true if you find a house that's not a ripoff, which proves increasingly difficult as the low-interest bubble keeps growing.
    I think the best option is to rent cheaply as long as you've got a job in or near a big city (where owning is too expensive), so you can save enough to buy a house in a nice but inexpensive place in the countryside to settle down after you're done working, with no or only a very small mortgage.

    1. Yes, I think we agree the best thing to do is make your money work for you best, and have some discipline. As for "a house in a nice but inexpensive place in the countryside to settle down after you're done working" people do not properly anticipate the costs of such a property, especially as in one's 'silver years' the ability to manage the property oneself diminishes quite sharply at some point, as well mobility inside and outside the house. Better to be old in a walkable neighborhood near doctors, emergency health services, and service industry that will continue to give you a reason to go out and walk.

    2. But aren't we expecting house prices to go down siginificantly once the bubble bursts, maybe even right in time for the silver years?

      Even if it doesn't, aren't there more options? Around here, a lot of in-between stuff exists. It's not either "huge city" or "countryside with no doctors around". There are plenty of nice smaller towns (around 100000 people) with doctors, even modern hospitals, and an overall good infrastructure around here. Their only problem is they're endlessly boring to anyone under 50, or even over 50 for people who think they're cultured, which means lots of unsellable property.
      If I buy an okay house in my early 60s I won't worry much about maintenance either, it will hold up the 15-25 years until I'm gone just fine.
      That's true for renting as well, I wouldn't want to live in a cheap part of a major city here when I'm old and look at drab buildings. The nice green parts of town will be too expensive to either rent or buy then.

    3. I now see I said "countryside" in the first post, but what I really meant was more like "a small town or any place that's not interesting to buy in for people with money"