You seem to be confusing “leverage” and “spendthrift consumer spending”. I certainly never made such an equivocation. If you want to keep beating that strawman, go ahead.
What you are referring to is the notion that real estate investments are a “hedge” against inflation, in the sense that housing costs make up a large part of the CPI. This is easily worked into the equation - the cost of housing isn’t some unknown intangible, but irrelevant, because in purely financial terms, it IS throwing money down a hole.
I am talking about a friendly loan with my friend Shagnasty. What evidence do you have that I am attempting fraud?Is there not some kind of board rule against this kind of slander?
This is a common mistake/fallacy when comparing renting and buying. No one is suggesting that you compare $x in mortgage to $x in mutual funds and not account for what it costs to live somewhere. But when you compare $x in mortgage to $y in rent and $x-y in mutual funds. In many cases (especially right now with housing prices sky high), renting is a better move.
It’s people like this that caused the new restrictions in the bankruptcy laws.
Max out your credit cards, get an unexpected expense, file bankruptcy.
Rinse and repeat.
I’m sorry to say, I know people who are living this way. Except on a much lower income.
Your friend is an idiot. Even if you want to live a heavily leveraged lifestyle, who the hell does it at 18% APR? If you assume about %25 salary taken out in taxes, they are still paying for a $175,000 a year lifestyle on $150,000. At some point they ARE going to run out of money and credit.
I don’t know. You know the old saying - buy land because they ain’t making any more of it. Plus you can borrow against the equity in your house.