Around the world, homeownership is stated to be the dream of the middle class. I understand it, in a way. Most people are not able own a home without the helps of banks or the government. Homes are incredibly valuable. Your home is priceless, as a matter of fact. But I don’t think poor and average people should own homes. It’s a contrarian and controversial opinion, but let me explain myself.Homeownership means stability This is why the concept of homeownership is shoved down the throats of those who are in the middle class. If you own a home outright, you are stable. People figured this out, and started epitomizing homeownership as a sign of wealth. It makes sense. Humanity wasn’t always as prosperous as it is today. Homeownership means forced savingsThe financially illiterate are very likely to blow all their money. Having a mortgage forces them not to. Amongst average people, owning a home is a lot better than not owning a home.The poor shouldn’t own homesIdeally, megacorporations would control rentals and make costs lower for everyone. Enforcement and legislation would be easier in the long term too. Why don’t we all agree to this? Because it centralizes power. As a result, most countries except for a select few do their damnedest to encourage home ownership at all costs. I think this makes sense in order to maintain social order. But as individuals, I think the poor should be smart and try their best to remain renters.Buying a home, especially in a poor country, is a debt contractYou basically are signing over your time and money in exchange for a roof over your head for years on end. If you fail, you lose the whole house. It’s risky and dangerous. People who are forced to sell real estate in the short term often find themselves losing money. When your poor, you should want to stay cash rich and nimble.Pool your resourcesIf you have a blood relative, you should be sharing real estate with them if possible. Treat it more like a business venture than a home purchase. This will also give you a greater appreciation for the seriousness of homeownership, and make you less likely to take on frivolous debt. Don’t pool your resources with a spouse unless you trust them. Be careful who you marry. Don’t overspendThis is really the key thing about not becoming a homebuyer. You have to remain reasonable with your expenses. The main advantage of not buying a home is that you have cash left over. If you squander that advantage and spend all your money, you find yourself behind the 8 ball.Cash is freedom If you have a lot of cash, you have the freedom to do whatever you want. If you don’t have cash, you can’t do much. Many countries will help you pay your mortgage down payment. But you still have to pay money every single month. For 10 to 30 years, you’re less free than you otherwise could be. If you can avoid overspending and keep cash in your pocket, you’ll have a ton of freedom to do important things like start businesses or get educated.Debt forces you to work If you have a mortgage, you’re going to be forced to work hard in the short term. Your mortgage debt is going to make you a slave, especially if you can’t afford a house. Right now we live in a society where everyone should be working. But you don’t want to send your work rate sky-high by taking on a bunch of debt. A mortgage locks you in one placeEspecially if you have a long term mortgage. The fact that you have a mortgage means you have a bill that attatches you to a location for years if not multiple decades. You don’t know whats going to happen in the world of politics. You don’t even know what’s going to happen with regards to the weather. Taking on a morotgage isn’t something I would do in today’s world.A house costs money to maintainUntil you have generational wealth, you should be living in a manner that’s as compact as possible. You don’t want to destroy your most valuable asset by living in it, do you? If you buy too much house and aren’t careful, that’s what you’ll be doing. Houses cost money to maintain. Remember that. Are you on pace to be able to afford real estate? I would only buy real estate if I could afford it. Right now, I am not on pace to ever be able to afford real estate. In order for that to happen, I would need to work a lot harder. Perhaps in the future the tides will turn, but right now I plan on renting for life. The most useful thing to me at t he moment is cash. That cash could help me create something that I could convert into real estate. Generally speaking, I only want about half of my final net worth to go into real estate. If end up being able to afford two houses, great. You can only create generational wealth with something you ownI think this is the scam that comes with buying a house that you can’t pay off. Make sure you can pay off what you buy so that you can pass it down properly to your kids. Not having a house will force you to work harderIt’s a bit of a dystopian idea: forcing people to become renters so that you can boost the economy. But it’s one that seems to work in a lot of places. In a lot of the world, many people mostly rent, and the people are quite wealthy. New York City and Switzerland are both examples of such places. The people are incredibly productive as a result. It sounds harsh to place a value judgement on it, but they innovate and create more.Sometimes you should settle Some real estate is really uncomfortable. Or perhaps, it isn’t that well built. But it’s what’s available in your city or country, and you can afford it. In this case, you should definitely buy. Real estate, even bad real estate, is a great tool to create generational wealth. No matter what anyone says, it’s much better to be wealthy, even if you aren’t living at a high standard. Peace of mind counts for a lot.Move from one poor country to the next If you are able to take your money from one poor country to the next, you’re well ahead of the game. What I would do, is take the money from one country where the money is abundant and the purchasing power is high, to the next where Put 1/4-1/2 of your net worth into a house If you can do that and get a house outright, or think that your net worth will rise to that point, that’s when you should get a house in my opinion. As far as I’m concerned, ambitious people should aim to have two houses. But if you only get to the point of affording one, 1/2 your net worth is good. Having a house is a great way to solidify your wealth.Family is cheap and divorce is badYou want to find a reasonable partner and stick with them. If you can go 50/50 with someone sane, you’re making one of the best business decisions ever. The difficulty for many is finding someone who meets their standards. Look for people who own businesses or have degrees. These are the best and easiest people to work with overall.As a man, no simpingYou want to be dating women who are of a similar income level to you. That way, you don’t end up building someone else’s dream house. Don’t simp as a man. Instead, look for a woman who is your equal. The world is way too poor to be fucking around. Find a good woman who understands that and build with her. A lot of the new value is onlineThis is a fact. A solid chunk of global wealth is online. The only thing is that the world is constantly changing. This means that the added value from the internet is only felt at the top end. The money will trickle down over time. Invest in tech and the internet before you invest in a house. Other investments are more peicemealWith a home, you have to committ. This is a real problem for the poor. I personally think its better to keep creating until you become wealthy. Committing to a house with a job being the only arsenal in my wealth building toolbox seems rough. You can buy stocks or invest in your own small business rather than buying a house.Homeownership is a dream of the middle class. But it isn’t necessarily one that is realistic, or makes sense. Oftentimes in today’s world, buying a home comes with the trap of debt. If you want to win, you need to avoid debt. Stay lean, keep cash in your pocket, and marry the right person. That will be a lot better than simply buying a random home.
Thanks for paying attention.
