Self-Made Millionaire Tells Renters That Buying A Home Is Their Esc...

David Bach, co-founder of AE Wealth Management, is a self-made millionaire who is estimated to be worth around $12 million at the moment. He's a financial author and financial adviser; having written numerous books including Live Rich, Go Green, and Fight For Your Money.

He says that those who are just renting today and who aren't opting to purchase their first home, are making possibly the biggest mistake they could and that their chances then of having any wealth long-term are severely limited.

And it's unfortunate that Bach is still peddling out this outdated advice.

Bach wants you to believe that your financial security for the future is going to come from buying a home today but is that true for everyone? Of course not. And if you only always rent, are you never going to be financial stable or successful? I don't think that's fair to say either. After all, Warren Buffet's been in the same home for his whole life. There are many ways for someone to build wealth for themselves and their family aside from home ownership.

Bach himself admits that he's made real-estate purchases in both San Francisco and New York and has since seen the value go through the roof, thus re-confirming his belief that home ownership is the way to go.

However, today there are bubbles all over the place and many real estate markets are said to be highly inflated. Millions of millennials today have been priced out of the market and couldn't dream of where they might ever come up with the $10-20k down payment for a condo, or a $100k down payment for a detached home.

Why would it be a smart move for someone to get into what's considered an incredibly overvalued market, especially if they cannot afford it?

In the US, it's suggested that roughly 48 percent of the nation's top 50 housing markets are currently overvalued.

When renters pay rent for years, Bach says that they “have nothing to show for it” many years later. But that isn't true, you are paying for a roof over your head and somewhere to sleep at night, that's what you had to show for it all those years.

There are many reasons why someone might want to rent instead of getting into home ownership, one being that home ownership reduces mobility. If you are offered a job somewhere else or need to move to take care of a sick family member etc, when you rent it's easy to make those changes and to move to somewhere new. Trying to sell your home would be much more difficult.

It also can drastically reduce someone's standard of living.

With renting they might be able to put a little extra money away for savings, and afford to take a vacation every now and again and have a nice dinner out etc. Getting into home-ownership and all of the underlying costs that come with that could mean that they won't be taking those vacations for a long time and that they will have to cut back in a variety of ways which reduces their standard of living.

If you simply cannot afford to be a home-owner right now then you aren't making any costly mistake. Because putting yourself into an even deeper hole of debt is what seems like it would be the foolish thing to do.

According to a report from Florida Atlantic University, there are numerous US cities where renting works out to be a better deal than owning; cities like Oregon, Seattle, Portland, Miami, and Pittsburgh. It's also been frequently suggested that the housing market is long overdue for a correction. Some investors have said that perhaps these overpriced markets might not fall sometime soon, but they warn that they are something of concern for investors. Some still maintain that there isn't any bubble to be concerned about.

Home prices are expected to continue going up for 2018 and many credit an inventory shortage as being the major driving factor.

Pics:
Pexels
via asturconsulting.com

This is Not Financial Advice.

Source:
https://www.cnbc.com/2018/01/04/self-made-millionaire-tells-millennials-buy-dont-rent-a-home.html
https://www.cnbc.com/2015/06/02/buying-a-home-dont-make-these-costly-mistakes.html
https://www.cnbc.com/2016/12/30/self-made-millionaire-buy-a-home.html
https://www.forbes.com/sites/omribarzilay/2017/12/13/planning-to-buy-a-home-5-things-to-know-about-the-2018-housing-market/#23bd92ff48fd
https://www.cnbc.com/2017/11/07/more-housing-markets-are-overvalued-and-consumers-feel-the-pain.html
https://www.cnbc.com/2017/11/27/chance-of-us-stock-market-correction-now-at-70-percent-vanguard.html
https://www.forbes.com/sites/ingowinzer/2017/12/14/overpriced-markets-on-the-horizon-could-prove-dangerous-for-investors/#7eba2a262a72
http://www.businessinsider.com/here-are-the-most-valuable-housing-markets-in-the-us-2017-12
https://www.thestreet.com/story/14421476/1/5-predictions-for-2018-u-s-housing-market.html

Self-Made Millionaire Tells Renters That Buying A Home Is Their Escalator To Wealth

And it's unfortunate that Bach is still peddling out this outdated advice.

Why would it be a smart move for someone to get into what's considered an incredibly overvalued market, especially if they cannot afford it?

In the US, it's suggested that roughly 48 percent of the nation's top 50 housing markets are currently overvalued.

It also can drastically reduce someone's standard of living.

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