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If you want to get rich, don’t buy a house…
Regular Daily readers know best-selling author, “serial entrepreneur,” and longtime PBRG friend James Altucher has a knack for killing the “sacred cows” of conventional financial advice (like “don’t invest in a 401(k)”).
Now, he’s taking down homeownership…
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From James Altucher, editor, Top 1% Advisory: When I tell people it’s better to rent a home than to buy it, they think I’m nuts. The most common response I get is, “But isn’t renting like throwing money down the toilet?”
No. Renting is like “making money.”
Let’s say you want to buy a $500,000 house with a 6% mortgage. And you have $200,000 to put down on it. You could do this, or you could rent the home for around $2,500 per month.
The $200,000 down payment is 80 months’ (almost eight years’) worth of rent. You give it to the bank in a single check.
And you never get that bank money back.
Because after mortgage debt (most of which can’t be written off), property maintenance, taxes (which go up with inflation and are almost never considered in the price of the house), closing costs, buying costs, title insurance, property upgrades, etc., you’ll spend close to $1 million in the lifespan of the house. Or even twice that.
So, instead of writing that $200,000 check in one day, spend the money on rent over eight years. The landlord’s responsible for all maintenance, taxes, etc. Then, you can invest all the savings in yourself, instead of in the house.
For instance, if you take two or three courses on WordPress (the world’s largest website-development tool), in one month, you’ll be qualified to take freelance jobs making $5,000 a month.
I know 14-year-olds doing this. Illustration, ghostwriting, and 3-D rendering are other skills you can learn. And there are thousands more.
How much do these courses cost? Often, nothing. But definitely less than a mortgage.
Remember, every investment is judged by its safety versus its alternatives. Investing in a home—with its never-ending expenses—isn’t safe.
Reeves’ Note: For the first time, James has agreed to share his personal investing system that’s made him over $10 million. He’ll show you how to make 100-500% gains… on the best ideas in the hedge fund and venture capital worlds. Until midnight tonight, he’s giving away one full year… 100% free. After midnight, this offer will expire. Click here to claim your free year…