You are right in theory but in practice most people aren't able to borrow nearly as much to buy stocks on loan as they are able to borrow to buy a house.

I also agree with your other point about differentiating between your house as meeting an immediate need vs. being an investment, but that wasn't relevant to my point.

Why is everybody so confident about 401K and Roth IRA/IRA?

I'm a fish on these sort of things but what are the CHANCES of our 401K/Roth IRA being taken from us by the government say 20+ years from now? Who knows what the future holds even 5 years from now.

From what I have been hearing 3-5+ years from now, we will have the "Mark of the Beast" on us.

I have asked other people and they said the government won't try to steal people's 401K and such but in today's age, anything can happen and I doubt anyone can stop them if they wanted to take our 401K/IRAs..

I have been thinking of investing in IRAs/401K but the more I do research the more afraid I feel that bad things will happen 3-5+ years from now..

Government stealing from the people such as

401K/IRAs
Mark of the Beast(we will be forced to place crap into our bodies)
Dollar value (goes down)

As of right now, I'm afraid to contribute anything into 401K/IRAs.

Am I wrong? Please enlighten me.

Enjoy your bunker.

I heard nothing like that can happen in Russia. Move to Russia.

Renting isn't throwing money away. You are purchasing the utility of having a place to live. A place to live is never free unless it's a box on the street.

Back when I was in my mid-20s a bunch of kids were buying homes. People told me I was supposed to be buying a home because "21 year old kids are buying homes now". Cut to a couple years later when those ARMs adjusted and then all these kids had to sell or walk away. Then I bought in 2009 at age 30 with a giant downpayment and an $8K government incentive to buy a home because nobody was buying homes. Because they were all back living with their moms.

Renting isn't throwing money away. The cost of home ownership vs. renting is much closer than you think. It basically comes down to it makes sense to buy a home when you want and need a home.

You seem to be ignoring property taxes, insurance, HOA dues, refrigerators, washer, dryer, mortgage interest, etc.

And I've never been able to itemize my mortgage interest or property taxes, mostly because I used a large enough downpayment to where I don't pay a ton of interest. So anyone who yells at you about how you get to deduct your mortgage interest can often times be ignored.

Though if you are a cash basis taxpayer (most people are), and you are on the border of being able to itemize or take the standard deduction, I strongly suggest timing your property tax payments such that you pay 2 years' worth in 1 calendar year and 0 years' worth in the next. This way you may be able to take the standard deduction in the year you paid 0 property taxes, and itemize in the year you doubled up. I have tried this twice now, though, and still have not been able to itemize in the year I double up on property taxes (which are around $3,200/yr. for a 150K home in Texas). Most states are lower. "Doubling up" isn't a huge deal since you are only paying 1 of your taxes 1 month before it is due (Jan. 31). Pay it by Dec. 31st and you may save by itemizing.

Good point. In fact maybe the government will just delete money altogether. Should just buy non-perishables with each paycheck to save. On the other hand Apple/Google may come up with new floating-pod homes or something, making your home investment obsolete as well.

If you think the dollar bill will still be used 10+ yrs from now, you got another thing coming.

https://www.youtube.com/watch?v=LntOBuyTGZ8

As for the 401K. I'm surprised no one thinks the government will try and confiscate people's 401K.. They seem to be doing w/e the hell they want lately, what makes ya'll think they won't take our 401K without a reason? Who would stop them? NO ONE!

I like this approach by conspitards,
They enter a discussion throwing a bait pretending they are asking questions about something they heard from someone and don't know much about but find intriguing.
When someone reacts, they suddenly know everything about the issue and flood the discussion with links to conspitard articles and videos.

Lol..Yes, I'm a fish that's why I asked. But people thinking the government wont try to do this and that or if we will still be using the dollar 5+ years from now is funny.

Feel free to enlighten this conspitard... Do you think our 401K will be confiscated in the future?

I was casually observing this thread trying to learn and found it very interesting. But you're starting to derail now with nonsense, so please stop or make a new thread, oneaddone.

You're clearly a troll. Not even the dumbest gold bugs believe the dollar will be gone in 5 years.

I've put about 8 seconds of thought into this because it's a dumb thing to be so scared about, but:

"Our 401(k)s" are a collection of company stocks, so they can't just steal those. So I guess if they want our 401(k)s they would have to jack taxes up to basically steal the money. If that's the case I'm pretty sure everyone just avoids paying taxes on the distributions and says come get me. Is the gummint gonna bring charges against like 100 million people at once? lol @ that.

Long-term capital gains tax hasn't been above like 22% since the mid-'90s. Currently LTCGs are taxed between 0-20%, depending on your bracket. If the gummint wants to rape America of its wealth it will just jack up ordinary income tax. At least for the mega wealthy. They aren't coming after your 68 year old average Joe's long term capital gains distributions.

Awesome! That's all I ask. Thanks for the explanation.

The idea is that with each monthly payment you are building equity in a long-term appreciating asset with a mortgage, whereas in renting you are not.

I don't necessarily have to take out an ARM, but ARMs are much less predatory, and much more borrower-friendly these days. Ask for details.

I'm aware of those, though I'd consider a fridge, washer and dryer a fixed cost. And depending on what you're renting, you have to buy your own anyway.

Oh, dang, I totally forgot to account for home equity when I made my post.

I haved worked in the financial services industry for 5 years, have all my brokerage licenses, and am currently studying for the CFP. I talk to countless people about things like this every day.

You should be prioritizing your savings in a hierarchy where your ability to buy a home is not affected by those savings. I guess I'll break this down in to two buckets, saving for retirement vs saving for a home.

Saving for retirement. You should at least be saving the employer match. This is free money. The next hierarchy of savings, make sure you have a liquid 6 months of savings- if in a relationship where two forms of substantial income are coming in or (or you have a second form of income like rental or investment income) you can make that 3 months. Once that is done, the next hierarchy (assuming no high IR CC debt), you should be contributing either more to 401k or to Trad/Roth IRAs depending on your financial situation as there are deduction phase out limits of IRA vs 401k. The key amount is 10% of income should be going towards retirement savings. Any more, great, any less, well you should adjust your lifestyle.

Bucket #2: home.


If you want to live in the home for at least 3-5 years, put 20% down on a home without wiping out that emergency fund or retirement money, have a mortgage payment that's not > 28% of your gross monthly income and keep your total monthly debt payments below 36% net monthly income, you should buy. If you have any reasonable doubt that your ambition of buying a home will violate any of the above rules of thumb, then you should probably rent and contribute more to your retirement savings until you want/have the above.

Man I had no idea PMI cost so much. Wiki says $55-$125/mo. for a loan of 100K-200K.

I definitely recommend avoiding PMI at all cost, not the least of which is because if you can't, or aren't willing to, save up 20% for a house it may signify you are not ready to buy. It's a good habit to tell people to put 20% down.

Though don't be entirely scared off by PMI. You should not have to pay it once your equity reaches 20%. Or, put better, once your loan-to-value ratio hits 80% or less (meaning your home may appreciate in value). So if you put 18% down it's not like you'll be paying PMI for the duration of the mortgage. It's still more efficient, if you are at 18%, to just keep saving to get to 20% than to buy and get to 20% equity via principal payments/home appreciation.

I said the 1 sentence version of this in post 49, but I'm guessing your good advice will be ignored as well.

LEVERAGEEEE

Oh dang, I didn't know paying rent gave me the utility of shelter

Do yourself a favor. Think about how often you are going to need to replace these things and how often they are going to need service. Estimate the replacement and repair costs on them for the next 10-20 years. Then, do the same for other things that you are going to get stuck with a bill for:
Replace your roof every 15 years, but you're probably going to have some leaks in between replacements.
Water heater, air handler and other appliances need repair and replacement every 10 years.
Carpet or wood flooring
Your wife is going to want a new kitchen
You will want to do some landscaping

I'm leaving stuff out, but you get the picture. Estimate that stuff and consider it in your calculations.

Pretty sure, since you said renters are "throwing their money away".

You also fail to account for the fact that 5 years down the road you will have a 5 year old home if you buy now, compared to a new home if you buy in 5 years. So you'll be hit with maintenance expenses sooner if you buy now.

Also don't forget that your future ex-wife will be taking half of your **** at some point.

Contributing $17.5k to his 401k is much different than everything I said.

Jfc, diversification. Buying a home is an aspect of diversifying your money. The sooner u own a home the sooner u can retire. Therefore you need to balance retirement nest eggs and home buying.