One of the main advantages to owning is security - if you get a fixed rate mortgage you lock in your monthly housing payments indefinitely; the cost to rent goes up each year. And once you pay off the home, you can live without much in the way of housing costs in retirement, which will significantly reduce the income you need from your investment portfolio.
Shiller says "if one rents one can invest the money one would have put in the home in other investments, and so offset the rent with the dividends from the investments." That assumes that you can rent for cheaper than it costs to own, which isn't true in most of our country. It also assumes people would actually save the difference, and it further assumes they'd invest it wisely, not touch it, and the market would perform according to historical standards. Lots of assumptions just to "prove" that the benefits of homeownership are "fallacy."
Besides which you are forgetting the power of LEVERAGE. Yes, homes only appreciate around 4% a year, but you're earning that 4% on the entire value of the house - when you actually only invested 10%-20% of the cost of the home. That puts your real return in the double digits in most cases, not including principal paydowns.
Your advice sounds like that given by Elizabeth Warren (and her daughter Amelia Warren Tyagi) in their excellent personal finance book, All Your Worth.
Here's what they say about paying off debt, from the chapter, "To Build Your Future, Pay Off Your Past,"
"Paying for yesterday is perhaps the most important investment you can make in your future. Getting rid of those debts will buy you breathing room."...
Also, in the same chapter, "Debt is nothing more than yesterday's spending taken from tomorrow's income. It is a claim against your future."
I agree, so many people are in need, especially around the holiday season. I like to buy toys for kids and put them in the donation box at the mall, and I also donate to Operation Christmas Child. I think both are great and worthy causes.
try something non-traditional for the big family get togethers. My family is each having their own private celebration for Thanksgiving day, and we are having our huge family get together on Sunday.
Instead of doing the turkey and all the trimmings... we're doing a big brunch instead. One person is bringing biscuits, one person bringing bacon and sausage, one person plates, etc.
It's going to be much cheaper on all of us, and we don't have to worry about alot of the traditional fare. (some of us are just NOT bakers)
Is there not something to be said by being debt free with no mortage or rent at some point in life? If I spend three times the selling price of my house over a thirty year span hopefully I'll maybe break even if I sell or my kids will have a pretty good piece of property when I die. You are correct in that the the home you live in is not an investment. For an investment you want someone else to live in it & pay the mortgage for you. But I still think buying is way to go BUT DON'T OVERBUY. That is where most people make their mistake.
It would be great to just have that $200,000 dollars at the start to invest in the market, and then live off the interest. But most of us can only make payments either for rent or for a mortgage.
I also think that, like the stock market, there are wise investors and not so wise. Spending 30 years to pay off a 200,000 dollar house would, in my opinion, fall into that not so wise category. If you can't pay it off in 15 years, then you have bought too much house for your budget. And if you can double those principle payments early on, you can save yourself thousands on interest payments.
And then, when it is paid off, you don't have to pay it anymore. You can live there for as long as you want and you just pay your utitlities and taxes and maintenance.
I know, the idea of living mortgage free is new to some people. But it is possible, and it frees your money up to invest in more diverse options.
Guest (9)--"It's an investment in a certain kind of lifestyle that may be, for you, very good or very bad." Brilliantly written.
But I'd like to take that line a step further. Back when people were largely buying farms and houses with shops or storefronts in them, buying a lifestyle was part of the package.
But today, the vast majority of people buy very similar type detatched homes and condos. There are millions of homes built in subdivisions that look substantially like every other house in the same subdivision, or in multiple sudivisions.
How is that a lifestyle? Or is it that we all desire the same lifestyle? (That's an entirely seperate topic worthy of it's own post!)
My point is, even the idea of "buying a lifestyle" doesn't hold up, unless of course the utlimate goal of that "lifestyle" is to be just like most everyone else. And you can rent a place and do that, with a lot less money tied up too.
You make an excellent point about viewing a home as an investment. It is rarely that. Sure, it's a place to live and call your own, and you have the freedom to decorate, etc. But it's not a money maker... well, not for you, anyway. For that bank, though, it certainly is.
"Bottom line: It only makes sense if the math makes sense. "
It's this statement that makes zero sense to me. It buys into the same "your home is a financial investment" propaganda that encouraged people to buy too much home with ridiculous ARMs. It just supposes that a home is a BAD investment instead of a GOOD one. If a home is not a financial investment, then judging home ownership based purely on finances is as much of a fallacy as ignoring finances completely in hopes of a giant return.
There are plenty of great reasons to buy a home that have nothing to do with "the math." Stability for example. Perhaps you don't feel like yanking your kids into a new school when your landlord decides to sell (or move back into the place himself). Or you want to be a part of your neighborhood or community for the long term.
Maybe you want to build a sustainable lifestyle by doing things your landlord won't allow (gardening, raising small livestock, installing solar to get off the grid, installing energy efficient appliances, adding a cistern or grey water facility, etc.). Maybe you just want to paint all the rooms the colors you like.
Finally, you may want to leave a legacy. You may not pay off the house until you're old, but imagine leaving a paid-for house to your descendants. The value there has nothing to do with the dollars invested.
Alternately, there are some good reasons to rent. Flexibility, for example. You aren't tied to a single location. Low maintenance -- the landlord does everything. Freedom from the tyranny of property values -- when a meth lab starts up next door, you can move.
My point is that financial considerations are the least of what people should consider when they make the buy or rent decision. Of course I'm not advocating ignoring the math entirely -- if you can't afford it, you can't afford it -- just that the math shouldn't be the determining factor.
A home is not a financial investment -- good or bad. It's an investment in a certain kind of lifestyle that may be, for you, very good or very bad.
The main problem we're trying to work off in the housing market right now stems largely from the almost universal view of a house as in investment. That caused people to buy more house than they could afford, to trade up regularly and to leverage it to debt levels never before seen in history.
Much of the cheerleading around real estate is driven by those who are in the business (builders, RE agents, etc) and those who see housing sales as a good way to drive the economy through additional consumption.
That's another problem in itself--the economic cheerleaders know that when you buy a house, you'll buy a bunch of things to go in it, on it, and in the driveway--a one household spending spree! And statistically, it's true! So it isn't just the cost of the house, it's all the chattel that goes with the purchase. No one ever factors that into the mix.
A house was a SOLID investment back when people made larger down payment, took fixed rate loans, and paid them off well ahead of schedule. A mortgage free home has always been the goal of the typical homeowner...until now.
As we evaluate those things that create fear and affect the markets we need to also be looking for new investment opportunities to take advantage of those markets, and that is what I am trying to find. What are the alternatives in today's markets. I have found a new resource for Distressed debit investing through buying pre-foreclosure notes through auction and I want to learn more. Has anyone been engaged in this activity. Check out www.RealtyNoteBid.com and let me know your thoughts…has anyone used them. Do you have any other resources / info that might help in my understanding this investment channel.
We love "owning" a house. (8 months in on a 30 year mortgage!)
Here's why it's worth it for us:
We have a yard
We have a garden
We can decorate how we want
We have a garage
We can drill holes in to put up shelves
We can make the house more energy efficient and live here long enough to recoup our investments
We can add a bathroom
We can run cables through the house and drill through the floor/wall to terminate them properly!
We bought based on the distance from my work. If we rented within the same radius (20 minutes or less by car was the goal. We are 15 minutes away) it would be $1000/month for an apartment with the same sq/feet without a yard or garage. We pay $850/month on our mortgage.
Those benefits are worth saving $250/month to me!
(Things are probably different in different locations. I'm in the Twin Cities).
Bottom line: It only makes sense if the math makes sense.
Calculate rent for the next 40 years, then calculate home ownership, maintenance (3% a year on average), mortgage costs, landscaping, etc.
I'm not against it, but I really do believe that home ownership is something that is a nice to have, but not an investment.
It may have been in the past, but not any longer due to the fact that you just have to look at the CONSTRUCTION of homes here in North America vs. ones in Europe.
It dims my enthusiasm to buy anything made out of chipboard and badly tacked together beams of wood.
I'd have to look for something from 1970s or earlier to get any decent construction or materials!!
Homes in Europe cost more, but it's because they're made out of brick and stone, and made to last.. able to be passed down to your great great great grandkids with hardly any maintenance.
Yes, I was taught by my parent's to set down roots with a home. But they also taught me to buy what I could afford versus what I really, really wanted. That said, my parent's started talking about us buying a home 5 years into married life. At the time we were 28 and I was scard to sign my name to something for 30 years. Thank god we listened to them! Now, 20 years later we are 5 years from paying off the mortgage. We will have 5 years after it is paid off before we look at retiring so that mortgage money will go into our retirement accounts. Now, when we retire we are looking at lake property and selling our house in the City. We bought before the homes in our area started to inflate. Yes, they have gone down a bit but we still have more than doubled our money. As things pick up we will be able to sell and buy our dream lake home without a mortgage. So, yes it has been an investment for us. Homeownership is not for everyone, but having worked in the rental business for 6 years as an apartment manager I can guarentee that those yearly rent increases for the most part are unnecessary, just money in the owner's pocket. Where we were there the average rent increase each year was $25/month. I am so glad we took my parent's sage advice and we have encouraged our younger family member's to do the same!!
The argument of whether to pay down debt... or to save a little, then pay down debt... or to save and pay down debt at the same time... is an overly argued one. It's all about personal preferences. Some people are comfortable with no emergency savings (while paying debt). Some people can manage without one. Some people aggressively pay down debt, while others take a slower method.
You give a good list of the cons. However there are pros as you are aware.
You are the boss, it's your home. I was able to build my basement how I wanted it as well as other changes like making my home more energy efficient. To rent the equivalent size house would cost more than I was paying on my mortgage. I can have family stay for extended periods. Years ago when I rented my rent was raised because my brother stayed with me. You can put down roots in the neighborhood because you are less likely to have to move because the landlord raises the rent. You get a tax deduction on your mortgage and property taxes. You can use home equity. It's hard to raise five children in an apartment, a house is better. You can grow a garden. Many times a house stands alone which is much better than a noisy, crowded apartment complex.
I paid for my home in 19 years. The trick is to buy a modest home (here's a photo of mine: http://www.rickety.us/2008/08/a-property-tax-alternative-the-home-consum...) at a fixed rate interest and don't add to the principle when you refinance. Wherever possible make repairs yourself as you go along, mow your own lawn, and keep up on maintenance. It is not that difficult. Remember, you are making a home, it's worth the effort.
You want to buy a $200,000 house. You put down $40,000 (at 20 percent you avoid mortgage insurance) and finance the remaining $140,000 at 5.25 percent on a 30-year mortgage. A decade later, you decide to sell your "investment" for $300,000."
I spend $1000/month on my "purchased" home, including taxes and insurance, but without repair costs included since they vary.
To rent something comparable it would easily be twice that -- if I could even find a 4 bedroom rental. Admittedly, I lucked out by wanting a house just before the housing boom that made the prices go crazy, so I got both the low interest and the low purchase price, but you can get similar deals now too.
Then, when I'm done with this house, I get to sell it. It may not make back everything I've spent in interest, but I will get something. If I was renting, I would get my security deposit returned. After only "owning" my house only five years, the difference between what I still owe (yes I have paid down the principle) and what it would be worth even on this (possibly depressed) market is approximately $50,000.
It may not be an investment versus putting money in the stock market while living in a box, but it does something. Unless you are planning to stay in your parents basement for all your life giving you freedom to invest anywhere you want, you will still need to pay for a place to live. Compare to dollar investments OR to rental properties for a reasonable arguement, not both. As far as I've heard no one is offering me free room and board to put my money in the stock market.
let them!
My MIL is bringing her sausage stuffing (I make vegetarian ones) and cranberry sauce (she makes a wonderful one). An aunt is bringing a pumpkin pie and brother is bringing an appetizer. I work what they're bringing into the menu and it cuts down on stress and costs.
To the "vaction? Whats vacation?" guy, I feel your pain.
I'm a "consultant" for a major health care company in my area and I don't have a single paid day off. I do the same job as the regular employees, answer to the same management, and yet I'm treated less than human due to my job title. I find it ironic that although I'm working for a health care company, I don't have any paid sick days.
The head honcho's brother in law owns the "consulting" company I'm "working under", so there is no chance that this scam will end any time soon. The only person who has been hired as a regular employee from contractor status got the position because someone died. So quite frankly, someone has to die so I can get a paid day off. It's THAT bad.
While I completely agree with the necessity of getting out of debt, in any way that's most comfortable, I disagree with putting paying off debt ahead of savings for the reasons outlined in Start and Grow Your Nest Egg Even If You're Broke
Sorry about the self promotion here, but there's more there than I can say here.
I find many articles (like this one) use the general terms "savings" and "debts" without making distinctions. There's a big difference between a high interest debt (like a credit card) and a lower interest debt (like a student loan). Likewise, saving for retirement or an emergency fund is different than saving for "wants" like a home, car or vacation.
I'm not letting my student loan stop me from saving money for retirement. (Mind you, I've making a lot of sacrifices to pay down extra on the loan and make my retirement goals). I can't afford to lose the years for compounding, and I get money back at tax time (which is much higher than the interest I would have paid on that money throughout the year).
This article makes some good points, but there's no right solution for everyone.
One of the main advantages to owning is security - if you get a fixed rate mortgage you lock in your monthly housing payments indefinitely; the cost to rent goes up each year. And once you pay off the home, you can live without much in the way of housing costs in retirement, which will significantly reduce the income you need from your investment portfolio.
Shiller says "if one rents one can invest the money one would have put in the home in other investments, and so offset the rent with the dividends from the investments." That assumes that you can rent for cheaper than it costs to own, which isn't true in most of our country. It also assumes people would actually save the difference, and it further assumes they'd invest it wisely, not touch it, and the market would perform according to historical standards. Lots of assumptions just to "prove" that the benefits of homeownership are "fallacy."
Besides which you are forgetting the power of LEVERAGE. Yes, homes only appreciate around 4% a year, but you're earning that 4% on the entire value of the house - when you actually only invested 10%-20% of the cost of the home. That puts your real return in the double digits in most cases, not including principal paydowns.
Your advice sounds like that given by Elizabeth Warren (and her daughter Amelia Warren Tyagi) in their excellent personal finance book, All Your Worth.
Here's what they say about paying off debt, from the chapter, "To Build Your Future, Pay Off Your Past,"
"Paying for yesterday is perhaps the most important investment you can make in your future. Getting rid of those debts will buy you breathing room."...
Also, in the same chapter, "Debt is nothing more than yesterday's spending taken from tomorrow's income. It is a claim against your future."
Wow.
I agree, so many people are in need, especially around the holiday season. I like to buy toys for kids and put them in the donation box at the mall, and I also donate to Operation Christmas Child. I think both are great and worthy causes.
@ James
What do you mean by don't overbuy? Im sorry I dont think I understand what you mean...
try something non-traditional for the big family get togethers. My family is each having their own private celebration for Thanksgiving day, and we are having our huge family get together on Sunday.
Instead of doing the turkey and all the trimmings... we're doing a big brunch instead. One person is bringing biscuits, one person bringing bacon and sausage, one person plates, etc.
It's going to be much cheaper on all of us, and we don't have to worry about alot of the traditional fare. (some of us are just NOT bakers)
Is there not something to be said by being debt free with no mortage or rent at some point in life? If I spend three times the selling price of my house over a thirty year span hopefully I'll maybe break even if I sell or my kids will have a pretty good piece of property when I die. You are correct in that the the home you live in is not an investment. For an investment you want someone else to live in it & pay the mortgage for you. But I still think buying is way to go BUT DON'T OVERBUY. That is where most people make their mistake.
It's amazing how much you can spend on dining out without even realizing it. Those 15$ stops through the drive thru add up quick.
It would be great to just have that $200,000 dollars at the start to invest in the market, and then live off the interest. But most of us can only make payments either for rent or for a mortgage.
I also think that, like the stock market, there are wise investors and not so wise. Spending 30 years to pay off a 200,000 dollar house would, in my opinion, fall into that not so wise category. If you can't pay it off in 15 years, then you have bought too much house for your budget. And if you can double those principle payments early on, you can save yourself thousands on interest payments.
And then, when it is paid off, you don't have to pay it anymore. You can live there for as long as you want and you just pay your utitlities and taxes and maintenance.
I know, the idea of living mortgage free is new to some people. But it is possible, and it frees your money up to invest in more diverse options.
Guest (9)--"It's an investment in a certain kind of lifestyle that may be, for you, very good or very bad." Brilliantly written.
But I'd like to take that line a step further. Back when people were largely buying farms and houses with shops or storefronts in them, buying a lifestyle was part of the package.
But today, the vast majority of people buy very similar type detatched homes and condos. There are millions of homes built in subdivisions that look substantially like every other house in the same subdivision, or in multiple sudivisions.
How is that a lifestyle? Or is it that we all desire the same lifestyle? (That's an entirely seperate topic worthy of it's own post!)
My point is, even the idea of "buying a lifestyle" doesn't hold up, unless of course the utlimate goal of that "lifestyle" is to be just like most everyone else. And you can rent a place and do that, with a lot less money tied up too.
You make an excellent point about viewing a home as an investment. It is rarely that. Sure, it's a place to live and call your own, and you have the freedom to decorate, etc. But it's not a money maker... well, not for you, anyway. For that bank, though, it certainly is.
"Bottom line: It only makes sense if the math makes sense. "
It's this statement that makes zero sense to me. It buys into the same "your home is a financial investment" propaganda that encouraged people to buy too much home with ridiculous ARMs. It just supposes that a home is a BAD investment instead of a GOOD one. If a home is not a financial investment, then judging home ownership based purely on finances is as much of a fallacy as ignoring finances completely in hopes of a giant return.
There are plenty of great reasons to buy a home that have nothing to do with "the math." Stability for example. Perhaps you don't feel like yanking your kids into a new school when your landlord decides to sell (or move back into the place himself). Or you want to be a part of your neighborhood or community for the long term.
Maybe you want to build a sustainable lifestyle by doing things your landlord won't allow (gardening, raising small livestock, installing solar to get off the grid, installing energy efficient appliances, adding a cistern or grey water facility, etc.). Maybe you just want to paint all the rooms the colors you like.
Finally, you may want to leave a legacy. You may not pay off the house until you're old, but imagine leaving a paid-for house to your descendants. The value there has nothing to do with the dollars invested.
Alternately, there are some good reasons to rent. Flexibility, for example. You aren't tied to a single location. Low maintenance -- the landlord does everything. Freedom from the tyranny of property values -- when a meth lab starts up next door, you can move.
My point is that financial considerations are the least of what people should consider when they make the buy or rent decision. Of course I'm not advocating ignoring the math entirely -- if you can't afford it, you can't afford it -- just that the math shouldn't be the determining factor.
A home is not a financial investment -- good or bad. It's an investment in a certain kind of lifestyle that may be, for you, very good or very bad.
The main problem we're trying to work off in the housing market right now stems largely from the almost universal view of a house as in investment. That caused people to buy more house than they could afford, to trade up regularly and to leverage it to debt levels never before seen in history.
Much of the cheerleading around real estate is driven by those who are in the business (builders, RE agents, etc) and those who see housing sales as a good way to drive the economy through additional consumption.
That's another problem in itself--the economic cheerleaders know that when you buy a house, you'll buy a bunch of things to go in it, on it, and in the driveway--a one household spending spree! And statistically, it's true! So it isn't just the cost of the house, it's all the chattel that goes with the purchase. No one ever factors that into the mix.
A house was a SOLID investment back when people made larger down payment, took fixed rate loans, and paid them off well ahead of schedule. A mortgage free home has always been the goal of the typical homeowner...until now.
As we evaluate those things that create fear and affect the markets we need to also be looking for new investment opportunities to take advantage of those markets, and that is what I am trying to find. What are the alternatives in today's markets. I have found a new resource for Distressed debit investing through buying pre-foreclosure notes through auction and I want to learn more. Has anyone been engaged in this activity. Check out www.RealtyNoteBid.com and let me know your thoughts…has anyone used them. Do you have any other resources / info that might help in my understanding this investment channel.
We love "owning" a house. (8 months in on a 30 year mortgage!)
Here's why it's worth it for us:
We have a yard
We have a garden
We can decorate how we want
We have a garage
We can drill holes in to put up shelves
We can make the house more energy efficient and live here long enough to recoup our investments
We can add a bathroom
We can run cables through the house and drill through the floor/wall to terminate them properly!
We bought based on the distance from my work. If we rented within the same radius (20 minutes or less by car was the goal. We are 15 minutes away) it would be $1000/month for an apartment with the same sq/feet without a yard or garage. We pay $850/month on our mortgage.
Those benefits are worth saving $250/month to me!
(Things are probably different in different locations. I'm in the Twin Cities).
For me, I am definitely pro renting for the number of reasons listed in the post I wrote here: Why I rent instead of buying a home
Bottom line: It only makes sense if the math makes sense.
Calculate rent for the next 40 years, then calculate home ownership, maintenance (3% a year on average), mortgage costs, landscaping, etc.
I'm not against it, but I really do believe that home ownership is something that is a nice to have, but not an investment.
It may have been in the past, but not any longer due to the fact that you just have to look at the CONSTRUCTION of homes here in North America vs. ones in Europe.
It dims my enthusiasm to buy anything made out of chipboard and badly tacked together beams of wood.
I'd have to look for something from 1970s or earlier to get any decent construction or materials!!
Homes in Europe cost more, but it's because they're made out of brick and stone, and made to last.. able to be passed down to your great great great grandkids with hardly any maintenance.
Read my whole post on it: The Emperor has No House
It all boils down to individual decisions -- for some, it's a GREAT idea, and a smart investment. If the math works versus renting then do it.
Don't buy it blindly because "everyone said so".
For me,... not so much. I did the thinking on it, and it's a black hole of debt disguised as investment.
Yes, I was taught by my parent's to set down roots with a home. But they also taught me to buy what I could afford versus what I really, really wanted. That said, my parent's started talking about us buying a home 5 years into married life. At the time we were 28 and I was scard to sign my name to something for 30 years. Thank god we listened to them! Now, 20 years later we are 5 years from paying off the mortgage. We will have 5 years after it is paid off before we look at retiring so that mortgage money will go into our retirement accounts. Now, when we retire we are looking at lake property and selling our house in the City. We bought before the homes in our area started to inflate. Yes, they have gone down a bit but we still have more than doubled our money. As things pick up we will be able to sell and buy our dream lake home without a mortgage. So, yes it has been an investment for us. Homeownership is not for everyone, but having worked in the rental business for 6 years as an apartment manager I can guarentee that those yearly rent increases for the most part are unnecessary, just money in the owner's pocket. Where we were there the average rent increase each year was $25/month. I am so glad we took my parent's sage advice and we have encouraged our younger family member's to do the same!!
The argument of whether to pay down debt... or to save a little, then pay down debt... or to save and pay down debt at the same time... is an overly argued one. It's all about personal preferences. Some people are comfortable with no emergency savings (while paying debt). Some people can manage without one. Some people aggressively pay down debt, while others take a slower method.
That's why it's "personal" finance.
You give a good list of the cons. However there are pros as you are aware.
You are the boss, it's your home. I was able to build my basement how I wanted it as well as other changes like making my home more energy efficient. To rent the equivalent size house would cost more than I was paying on my mortgage. I can have family stay for extended periods. Years ago when I rented my rent was raised because my brother stayed with me. You can put down roots in the neighborhood because you are less likely to have to move because the landlord raises the rent. You get a tax deduction on your mortgage and property taxes. You can use home equity. It's hard to raise five children in an apartment, a house is better. You can grow a garden. Many times a house stands alone which is much better than a noisy, crowded apartment complex.
I paid for my home in 19 years. The trick is to buy a modest home (here's a photo of mine: http://www.rickety.us/2008/08/a-property-tax-alternative-the-home-consum...) at a fixed rate interest and don't add to the principle when you refinance. Wherever possible make repairs yourself as you go along, mow your own lawn, and keep up on maintenance. It is not that difficult. Remember, you are making a home, it's worth the effort.
they don't add up, just an oversight..
"Here's an example with some numbers:
You want to buy a $200,000 house. You put down $40,000 (at 20 percent you avoid mortgage insurance) and finance the remaining $140,000 at 5.25 percent on a 30-year mortgage. A decade later, you decide to sell your "investment" for $300,000."
I spend $1000/month on my "purchased" home, including taxes and insurance, but without repair costs included since they vary.
To rent something comparable it would easily be twice that -- if I could even find a 4 bedroom rental. Admittedly, I lucked out by wanting a house just before the housing boom that made the prices go crazy, so I got both the low interest and the low purchase price, but you can get similar deals now too.
Then, when I'm done with this house, I get to sell it. It may not make back everything I've spent in interest, but I will get something. If I was renting, I would get my security deposit returned. After only "owning" my house only five years, the difference between what I still owe (yes I have paid down the principle) and what it would be worth even on this (possibly depressed) market is approximately $50,000.
It may not be an investment versus putting money in the stock market while living in a box, but it does something. Unless you are planning to stay in your parents basement for all your life giving you freedom to invest anywhere you want, you will still need to pay for a place to live. Compare to dollar investments OR to rental properties for a reasonable arguement, not both. As far as I've heard no one is offering me free room and board to put my money in the stock market.
You can counter the downsides you mentioned by staying in your home 15+ years and paying extra each month which makes a huge dent in interest paid.
let them!
My MIL is bringing her sausage stuffing (I make vegetarian ones) and cranberry sauce (she makes a wonderful one). An aunt is bringing a pumpkin pie and brother is bringing an appetizer. I work what they're bringing into the menu and it cuts down on stress and costs.
To the "vaction? Whats vacation?" guy, I feel your pain.
I'm a "consultant" for a major health care company in my area and I don't have a single paid day off. I do the same job as the regular employees, answer to the same management, and yet I'm treated less than human due to my job title. I find it ironic that although I'm working for a health care company, I don't have any paid sick days.
The head honcho's brother in law owns the "consulting" company I'm "working under", so there is no chance that this scam will end any time soon. The only person who has been hired as a regular employee from contractor status got the position because someone died. So quite frankly, someone has to die so I can get a paid day off. It's THAT bad.
While I completely agree with the necessity of getting out of debt, in any way that's most comfortable, I disagree with putting paying off debt ahead of savings for the reasons outlined in Start and Grow Your Nest Egg Even If You're Broke
Sorry about the self promotion here, but there's more there than I can say here.
I find many articles (like this one) use the general terms "savings" and "debts" without making distinctions. There's a big difference between a high interest debt (like a credit card) and a lower interest debt (like a student loan). Likewise, saving for retirement or an emergency fund is different than saving for "wants" like a home, car or vacation.
I'm not letting my student loan stop me from saving money for retirement. (Mind you, I've making a lot of sacrifices to pay down extra on the loan and make my retirement goals). I can't afford to lose the years for compounding, and I get money back at tax time (which is much higher than the interest I would have paid on that money throughout the year).
This article makes some good points, but there's no right solution for everyone.