I will start with a quote from the #Trilema Log:
mircea_popescu: Let's do some practical home economics likbez:
IF the problem is that the currency is shit (which is strictly what "rising rents" means: if rents are rising, THEREFORE the currency is shit. if urine is sweet, THEREFORE diabethes, no iffs or butts about it, these are NOT separable), then owning real estate is a very poor solution: real estate follows the currency secular trend if currency is strong and stays strong, real estate goes up in value, which is how owning land in republican Rome or expansive Venice paid out. If however the currency flags, real estate forthwith moves into emergency monetization role, meaning you want to short it as part of a triple currency play. (Which is why us banks LEND you houses: it's the other part of their international trade where they borrow hard currency.)
That was part 1, as to financials.
IF you are a young man, and are producing more than consuming (if not, please follow the recipe for gender re-assignment, you don't belong here), you should save ~in capital goods~ specifically ~of your trade~. That's what you do with every dime you can save: you buy your own tools! to become journeyman! If you're making a living driving a car, you buy CARS. if you're making a living fixing cars, you buy forklifts and power tools. The only 20-something who can reasonably buy real estate is... a pimp. If you're not a fucking pimp, you don't buy real estate in your 20s. and if you are a pimp, you buy in fucking Baltimore, you buy in the blighted downtown of Detroit or Philly or whatever the shit. NOT crap in suburbia; and in any case you don't buy crap made ~for you~ by people who ~you do not know~. What the fuck, are you retarded ? if people who you don't know are making things for you, the name for the thing they're making is A TRAP. Either you buy made to order like my serb friends, or else you buy leftover brownstone nobody else wants, etcetera. what the fuck, this is novel to someone ?! Why, because "do we still have to" read 1700s state of the art textbooks on personal conduct ?
That was part 2, as to journeyman economic conduct.
If you're a young man, YOU DO NOT BUY ILLIQUID, NON-NEGOTIABLE ANYTHING!!!! I don't mean, with money. I mean with anything. You have enough sense to keep your sexual relationships at will rather than get fucking married, fine, but the same applies throughout. Buying "a house" from "the bank" is THE EXACT EQUIVALENT of giving your savings to your dad "to hold on to them for you". what the fuck, are you twelve? Things flow the other way, your aging dad gives you the duchy of Cornwall for you to hold on to for him, what the fuck is this ? and if dad ~dun have~ a duchy of Cornwall large enough to keep you occupied, ~you leave~. and you spit on his head, too, because HE FAILED in life. Because this was his fucking job: by the time the sons he made were old enough to do something useful with his time, he was supposed to have so much fucking land and chattels as to be desperate for loyal hands, and more than happy to "go, take x, hang yourself with it, holy hell finally!" as a young orphan with potential, you keep to negotiable instruments. that's why the young men of Florence who did get to be old men and successful enough as to buy up all the young cunts for gold to all the failures' despair went into trade rather than bureaucracy! NEGOTIABLE. If whatever the fuck it is "you have" can't be ~sold~, on the ~open market~, YOU ARE NOT INTERESTED IN IT. You will be interested, of course, BUT FIVE DECADES HENCE. When you're old. Then the sort of non-negotiable commitment makes sense. Not in your fucking 20s, so spare me with all the "jobs" you can not sell (yes, this is what "working remote" IS, SELLING IT!!!), all the "college degrees" worth 0 on auction, and all the etcetera.
This was part 3, as to commercial aptitude.
There's more, and besideswhich a lot more to all of these foregoing parts, but holy hell... seriously, nobody ever thinks of things or what is the problem here !?
Back in 2005 when I was young and stupid, my wife and I were told that our apartment rent would be going up (I don't remember exactly, but it was somewhere in the 10-15% range). So we decided that we should buy a house, avoiding rising rents was one of the reasons. Another reason being that we would save up some money as equity; the price of houses in the Lansing area had been consistently rising for 20 years, and we wanted to tap in on that wave. We were college students with part-time jobs, but we didn't have any negatives on our credit report, so we somehow qualified for a mortgage. This was a 0% down mortgage, what they do is artificially inflate the price of the house and roll things like closing costs into the amount you are borrowing from the bank. Turns out we bought right at the top of the housing bubble, and five years later when we wanted to move the house was only worth a quarter of what we paid for it. At that point, we would have been much better off if we had just kept renting.
Having had our credit trashed by the housing fiasco, we rented for a while when we moved to Midland. When we bought a house again, we approached it very differently. Instead of looking at it as an investment, we tried to find the best way to maximize our return on our expense. We found a house that we will be comfortable in at least until we retire. We could have gotten a bigger house in a nicer neighborhood according to the "budget" that the real estate agent so helpfully suggested to us, but instead we chose one that fit into our own budget. And now we pay the same amount monthly for our mortgage that we did for our rental, but the house is twice as big. My point is, in some situations it makes sense to buy a house, but not in every situation.
We also purchased some commercial real estate for my wife's business. This would go along with Mircea's part two above. Her business involves teaching music lessons, so we have invested in the building and the instruments to make that possible. As they say, you can't get rich making money for somebody else.
