# Are you debt free? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [September 14, 2017, 12:15pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312 "2017-09-14T12:15:42Z")\ **Posts on this page:** 7\ **Page:** 7
**Author:** ![jtur88](https://avatars.discourse-cdn.com/v4/letter/j/e9c0ed/32.png) [@jtur88](https://boards.straightdope.com/u/jtur88)\ **Post date:** [September 17, 2017, 11:53pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/121 "2017-09-17T23:53:59Z")
> [@Bill\_Door](#): > > Wrong as wrong can be. Owning real estate is not a zero sum game like a racetrack or commodities. It’s like the stock market, absent specialized trades like futures that are zero sum. Everybody can make money. > > More people make money than lose money in housing, especially if they had a modicum of brains. If you didn’t, that says more about you than about the housing market. Yeah, if you foolishly overbought and assumed you’d be able to refinance when the five year balloon payment came along you might get a little pinched, but that doesn’t happen to most people. Most people do the sensible thing and bought a house they could afford. > > That housing collapse was pretty bad, but here’s a link to the [Case-Schiller U.S. National Home Price Index](https://fred.stlouisfed.org/series/CSUSHPINSA). Even if you bought at the absolute peak of the market in July of 2006 and just rode it out for a decade you’d have been positive in September of 2016. > > Ten years is a long time to wait to break even, but you’ve gotta live somewhere anyway. > > People that borrowed to flip houses, you know why they had a half dozen TV shows about them? Because it was unusual, it was a man bites dog story, hardly anyone was doing it and people are always interested in freaks. It’s like the tiny house stuff you see all over. Nobody you know is living in one, but there it is. A couple of TV series and a few New York Times articles doesn’t make a trend. Please don’t call me “Dude”. And don’t say I"m “wrong as wrong can be” just because I didn’t “stick it to” somebody and use that anecdotal evidence. Which, in fact, does prove that it’s zero sum game, your gain counterbalanced by the guy you hosed. If “everybody can make money”, how come he didn’t? Only people with brains, like you? ---
**Author:** ![Bill\_Door](https://avatars.discourse-cdn.com/v4/letter/b/50afbb/32.png) [@Bill\_Door](https://boards.straightdope.com/u/Bill_Door)\ **Post date:** [September 18, 2017, 1:04am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/122 "2017-09-18T01:04:58Z")
> [@jtur88](#): > > Please don’t call me “Dude”. And don’t say I"m “wrong as wrong can be” just because I didn’t “stick it to” somebody and use that anecdotal evidence. Which, in fact, does prove that it’s zero sum game, your gain counterbalanced by the guy you hosed. If “everybody can make money”, how come he didn’t? Only people with brains, like you? No, he moved to Birmingham and bought a house there at a lower price than he would have had to three years previously because, get this, houses were on sale! Prices were down all over, there was a recession. It was in all the papers. So he got less for the house he sold, but he paid less for the house he bought, and everybody made out pretty well. And no, that’s not why you’re wrong. You’re wrong because you said more people lose money than make money buying a house. > [@jtur88](#): > > (snip)More losers than winners, just like racetracks and commodity futures, and even more disastrous if you do it on borrowed capital.(snip) > [@jtur88](#): > > (snip)There are more people who lost their mortgaged homes, than who made a killing on them.(snip) That’s why you’re wrong, because you say things that are incorrect. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 18, 2017, 2:45am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/123 "2017-09-18T02:45:05Z")
> [@Bill\_Door](#): > > No, he moved to Birmingham and bought a house there at a lower price than he would have had to three years previously because, get this, houses were on sale! Prices were down all over, there was a recession. It was in all the papers. > > So he got less for the house he sold, but he paid less for the house he bought, and everybody made out pretty well. In the Bay Area we have the complementary situation. There is almost no inventory, since while you might make a fortune selling your house which has soared in value you’d have to pay another fortune to buy one. Assuming you even can, since there are so many bids for each decent house on the market. ---
**Author:** ![jtur88](https://avatars.discourse-cdn.com/v4/letter/j/e9c0ed/32.png) [@jtur88](https://boards.straightdope.com/u/jtur88)\ **Post date:** [September 18, 2017, 8:00am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/124 "2017-09-18T08:00:26Z")
> [@Bill\_Door](#): > > No, he moved to Birmingham and bought a house there at a lower price than he would have had to three years previously because, get this, houses were on sale! Prices were down all over, there was a recession. It was in all the papers. > > So he got less for the house he sold, but he paid less for the house he bought, and everybody made out pretty well. > > And no, that’s not why you’re wrong. You’re wrong because you said more people lose money than make money buying a house. > > That’s why you’re wrong, because you say things that are incorrect. I never said the number of foreclosures was greater than the numbed of people who gainfully flipped using credit, although you have not even demonstrated that that would not have been true. What is the threshold profit to qualify as “making money” in speculative real estate? By the way, I made out pretty well by not speculating with borrowed money in a market I knew nothing about, so one anecdote cancels another. . ---
**Author:** ![Bill\_Door](https://avatars.discourse-cdn.com/v4/letter/b/50afbb/32.png) [@Bill\_Door](https://boards.straightdope.com/u/Bill_Door)\ **Post date:** [September 18, 2017, 10:33am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/125 "2017-09-18T10:33:59Z")
> [@jtur88](#): > > I never said the number of foreclosures was greater than the numbed of people who gainfully flipped using credit, although you have not even demonstrated that that would not have been true. What is the threshold profit to qualify as “making money” in speculative real estate? > > By the way, I made out pretty well by not speculating with borrowed money in a market I knew nothing about, so one anecdote cancels another. . Did you really? Well, good for you, because speculating with borrowed money is what no one in this thread has ever said was a good idea. Magnificent strawman there. We were all talking about personal debt and I said that a home mortgage was good debt on an appreciating asset. I have already presented evidence in the foreclosure rates over the 2005-2016 period showing that in the peak of the [Great Recession only 2.1% of homes were in foreclosure](https://www.google.com/imgres?imgurl=http://static.realtytrac.com/images/reportimages/foreclosure_activity_rates_annual_2016.png&imgrefurl=https://www.attomdata.com/news/heat-maps/2016-year-end-u-s-foreclosure-market-report/&h=1034&w=1424&tbnid=MlNufAvXFZZDbM:&tbnh=152&tbnw=211&usg=__KaxgDpZrte0CoXwpJW8-H4uesVo=&vet=10ahUKEwibttSShKzWAhWIYyYKHdLZCxkQ9QEILzAA..i&docid=AXTlphAyqwte6M&sa=X&ved=0ahUKEwibttSShKzWAhWIYyYKHdLZCxkQ9QEILzAA). I have already presented the [Case-Schiller U. S. National Home Price Index](https://fred.stlouisfed.org/series/CSUSHPINSA) over the last 40 years showing the trend in home prices. You’re the one with nothing but anecdotes. Here for the last time is another piece of evidence from the [New York Times](https://www.nytimes.com/2014/11/30/opinion/sunday/homeownership-and-wealth-creation.html). It’s an editorial, I know, but it links to a study by The Joint Center for Housing Studies from Harvard University that concludes: [QUOTE=Christopher E. Herbert, Daniel T. McCue, and Rocio Sanchez-Moyano Harvard University, Joint Center for Housing Studies ] The other mechanism by which owning is associated with increases in wealth is through the large increase in savings that occurs when households make the move to owning. This is evidenced among those first buying between 2007 and 2009 who, despite the troubled housing market, had gains in net worth of $18,000, more than tripling the amount they held before buying a home. Over a longer period of time the paydown of principal will further add to these gains, although the period studied was too short to capture these gains. But this forced savings aspect is arguably an important way that owning leads to wealth creation over the long run since it is at work in all market conditions. [/QUOTE] And you exactly said that more people had been foreclosed on than gained. > [@jtur88](#): > > (snip)There are more people who lost their mortgaged homes, than who made a killing on them.(snip) Do you even listen to yourself? In any event, I’m through here. Call it a win for you, I don’t care what you believe, whatever unhappiness you feel about the way your life has turned out isn’t the fault of the housing industry. ---
**Author:** ![CalMeacham](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/calmeacham/32/35_2.png) [@CalMeacham](https://boards.straightdope.com/u/CalMeacham)\ **Post date:** [September 18, 2017, 12:35pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/126 "2017-09-18T12:35:17Z")
We are debt-free, aside fro our mortgage, which will be paid off within the year. We could, I suppose, pay it off completely, but we still get a tax break on that, and there are other reasons. We’ve been lucky in many ways (Among other things, our daughter MilliCal got a scholarship for college, which helps enormously. None of us have ever had to take out student loans.), but a lot of it is relative frugality. We haven’t had a proper vacation in years. our biggest expenses have been cars (a necessity – repairs, mainly) and medical. ---
**Author:** ![Jennshark](https://avatars.discourse-cdn.com/v4/letter/j/8e8cbc/32.png) [@Jennshark](https://boards.straightdope.com/u/Jennshark)\ **Post date:** [September 18, 2017, 12:41pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/127 "2017-09-18T12:41:47Z")
I have “good debt” (mortgage, student loans) and a car payment because I like nice cars. I paid off my credit cards and use AmEx for any charges – it’s the Platinum(?) one that I need to payoff each month, so I have to carefully consider budget if I charge stuff. [Previous page](https://boards.straightdope.com/t/are-you-debt-free/796312.md?page=6)