How do mortgages pay dividends?
In any case, it's all about opportunity costs, and yields.
To give an extreme example: if the house costs 100x the yearly rent, you are probably better off putting your money in the stock market instead of buying the property, and paying your rent from the returns on the stocks.
Mortgage is temporary though, rent is eternal and usually increasing over time. This means you don't save money in the long term, either.
100x is just bad decision making
Somethings like marriage, kids, buying home just have be done in life as early as you can.
Note money is just a number at the end. The idea is not to have max($money), rather max($free_time, $health). Optimise for $free_time and $health, and then you have a very different life strategy to work towards.
If you have $x, you can buy a house and save on $y rent. But you could also buy eg bonds, and make $z return per year. If z > y, going for the bonds is better.
Free time and health don't even come into the picture here. [0]
(Of course, taxes and regulations can make this more complicated. And there are systematic and idiosyncratic risks to take into account.)
It's not automatic that buying owner-occupied property is always the best way to invest your wealth.
[0] Well, I assume renting is better for your health: I was significantly less stressed about all the water damage that we had about two years ago, because I knew it was ultimately my landlord's problem, not mine. But the overall effect is likely to be rather minor, and it can go either way, as some people get a mental health benefit out of knowing that they own their home.
>>Well, I assume renting is better for your health: I was significantly less stressed about all the water damage that we had about two years ago, because I knew it was ultimately my landlord's problem, not mine.
Paid by your money.
>> But the overall effect is likely to be rather minor, and it can go either way, as some people get a mental health benefit out of knowing that they own their home.
I get a feeling if one is fairly rich they don't have to worry about money. When you are that rich, it doesn't matter whether you rent or own.
If you bought it, you're paying off the old price. If you're renting, rent increases every year to keep more or less in line with the accruing value. So while renters and buyers may both start out paying (eg) 20% of their income on housing, for buyers, this will typically go down (due to inflation --> higher wages), while for renters, it will stay the same and might even increase.
You're right about considering opportunity costs, but around here, it just turns out far, far worse for renters.
The one case where I think buying doesn't really make sense is for people who enjoy traveling long-term. You can still theoretically rent or sell the place, but now you're back to increasing life stresses especially in the rental cases because you have a lot of obligations there that would require employees if you're remote and so on. And then moving money internationally, especially between currencies, and all of this stuff. Just ugh, no no no.
[1] - https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Ban...
