Politics

[Alistair]

Interesting video. I continue to maintain a home with equity is an asset - one without a note is a much larger asset. Yes, unless inherited, it is an asset that will be legally expressed in part as a capital gain - that value above purchase price and improvements cost basis. But the original full cost basis is also recovered if the house has no note. If inherited, there is no capital gain issue at all generated prior to inheritance. I realize some personal finance educators claim an "asset" must generate cash flow. I do not have an MBA, but my mentor at my Tuck executive course had a rhetorical question to address this very issue. If you were required to prepare a declaration of your net worth, would it include your home as an asset or liability? I rest my case.

I think it's an asset, but ultimately a pretty poor asset.

To whit:

I could rent my house for approximately $2k/month. Nothing down, no ongoing costs beyond that.

I bought, with a mortgage.

The mortgage was $2000/month, I paid $6k/yr in property taxes, $1k a year in insurance, I expect to pay about 2%/yr in maintenance, so $6k. If I left the mortgage to do its thing, I'd build about $3k in equity in year 1 and a bit more with each year after.

I'd also tied up 20% down which if I'd invested and got 10%/yr, would yield $6k in yr 1.

So to be an 'asset' in year 1, the house needs to appreciate $16000, or about 5%. Anything more than that, it's better for your net worth than renting. Any less, it's a liability.

It worked out to be basically a wash.

Over the 30 years, it increasingly is an asset, so long as you buy it, and keep it. If you move up the property ladder each time you start accumulating some equity, it's basically always a liability.

I paid off my mortgage and now it costs $13k/yr, which is a lot cheaper than rent was. Who knows, maybe the house appreciates in the future as well. It's now undeniably an asset.

I'd still make a lot more by having that money in the markets and I always have maintenance, insurance, tax liabilities, but then I do need to live somewhere, so there's always a cost to that. Life isn't free.

On a pure NPV approach, I suspect it's 'always' a terrible idea to take on a mortgage, which means for most people buying a house is 'always' a terrible idea. But then, you can always clear 'em, so long as you buy within your means, and stay put.

 

[Jeff505]

Is not NATO a defensive alliance? If the US were attacked and invoked article 5 just like after 9/11 I sure hope all allies would heed the call. But in this case the US is the aggressor and therefore it does not seem to be any case for it to be considered a NATO issue.

Perhaps it would have been wiser to build a coalition like before Desert Storm or the 2003 invasion of Iraq. The israeli probably could still have taken out the Ayatollah before coalition forces started their part of the warfare.

I mean instead of trying to blackmail other countries to join the war with threats of a bad future for Nato etc...now he actually just makes it seem like the administration has realized that the US Navy cant handle Iran alone which makes them look a little desperate.

“The US is the aggressor” You could not have your head further up your ass if you tried. Iran has been waging war on the civilized world for almost 50 years. The US has been one of the prime targets. Yes, you are indeed a jack wagon.

 

[barryk]

If CNN’s data analyst is correct, the mid terms might not look nearly as bleak as some on the right might think…

CNN data guru reveals Trump’s base is expanding with 100% approval from MAGA Republicans

CNN chief data analyst Harry Enten dismissed the narrative of a MAGA split Wednesday with polls showing President Trump is enjoying 100% support from his Republican base.

nypost.com

If they get out and vote.

 

[Red Leg]

I think it's an asset, but ultimately a pretty poor asset.

To whit:

I could rent my house for approximately $2k/month. Nothing down, no ongoing costs beyond that.

I bought, with a mortgage.

The mortgage was $2000/month, I paid $6k/yr in property taxes, $1k a year in insurance, I expect to pay about 2%/yr in maintenance, so $6k. If I left the mortgage to do its thing, I'd build about $3k in equity in year 1 and a bit more with each year after.

I'd also tied up 20% down which if I'd invested and got 10%/yr, would yield $6k in yr 1.

So to be an 'asset' in year 1, the house needs to appreciate $16000, or about 5%. Anything more than that, it's better for your net worth than renting. Any less, it's a liability.

It worked out to be basically a wash.

Over the 30 years, it increasingly is an asset, so long as you buy it, and keep it. If you move up the property ladder each time you start accumulating some equity, it's basically always a liability.

I paid off my mortgage and now it costs $13k/yr, which is a lot cheaper than rent was. Who knows, maybe the house appreciates in the future as well. It's now undeniably an asset.

I'd still make a lot more by having that money in the markets and I always have maintenance, insurance, tax liabilities, but then I do need to live somewhere, so there's always a cost to that. Life isn't free.

On a pure NPV approach, I suspect it's 'always' a terrible idea to take on a mortgage, which means for most people buying a house is 'always' a terrible idea. But then, you can always clear 'em, so long as you buy within your means, and stay put.

We purchased our house in 2013 and paid it off in 2016. It is currently valued 2.5 times its purchase price. Two years ago it would have been 3X. It is most definitely an asset however you care to work the math. Yes, I know all sorts of "smart" people have great ideas about better places to put that sort of money. But there is also very real old school "value" in not dealing with a mortgage regardless of the assets appreciation and treating the property as any other investment.

 

[KJE81]

“The US is the aggressor” You could not have your head further up your ass if you tried. Iran has been waging war on the civilized world for almost 50 years. The US has been one of the prime targets. Yes, you are indeed a jack wagon.

The term aggressor in this case was more of a "legal" term to indicate that it was in fact the US and Israel that attacked Iran openly thus starting the present conflict that for the first time is in fact a de jure war, therefore this war can not be considered a Nato matter since Nato is a defensive alliance, if it was the other way around and Iran attacking the US, then the US could have invoked article 5 and then all allies should heed the call.

I know that Iran has had it coming for decades and that they have been attacking US troops and interests through their proxies long before this war and also sponsored terrorism, but the US did not used that as a pretext to invoke article five. So to be clear I am not saying that it is wrong for the US and Israel to attack Iran but it still does not makes it a Nato war.

As it stands now its just wrong for Trump to use it as an argument against Nato, "they are not there for us when we need them" etc...the only time article 5 has ever been invoked it was by the US and as far as I know every ally heeded the call...

 

[VertigoBE]

From the point of view of the home owner, the primary residence is definitely in the asset class. Although it does not generate cashflow, the income received from it is a roof over your head. You have to live somewhere. Every payment you make to your home loan, is money that otherwise would be out of your assets, while now it builds equity.

From the point of view of the investor, so no longer primary residence, you cannot live in two houses at the same time, it becomes a liability indeed. Unless you rent it out. In which case it becomes a cash generating asset again.

Although I have not worked in a real estate company, I can imagine that the buildings in their portfolio are listed as liabilities, while the rental contracts on them are listed as assets. So for real estate companies, as long as rent income > loan payments+costs, or assets>liabilities, they can show a net profit at the end.

Another reason that speaks in favour of home ownership, is the possibility to make certain tax deductions, from the maintenance cost of the home. (if the home is in a small real estate company, instead of owned directly)

But anyway, my opinion on this topic is layman level only.

 

[Finprof]

Rental properties are an asset, or should be.

Agree completely. I enjoy getting into the weeds and often skip over the basics.
The original post basically contends that home ownership is an inferior asset to stock ownership. That contention requires predicting the future, something that I try to avoid because I am often surprised.

 

[spike.t]

It’s Awesome!View attachment 753816

Looks pleasant.... presume nice dry heat...

 

[rigbymauser]

The same is true all over the world..

View attachment 753531

thats paris..


View attachment 753534

thats Bradford, UK..

View attachment 753535


Thats Gottengin Germany


View attachment 753536


Thats just outside Bonn Germany..

View attachment 753538

these are migrant Roma in Malmo Sweden..



Im afraid Im not seeing your point..

All of those countries have substantially more social welfare programs than the US.. and yet they have notable numbers of people living in abject poverty and filth..

Of course there are poor people in the US.. there are 340M US citizens and a super conservative estimate is that there are another 18M illegals in the US as well..

The question is how does someone define "poor" or poverty?

If you use the World Banks definition of poverty (less than $3 per day) then exactly zero americans live in poverty...

If you use the US's definition of poverty (less than $20 per day) then just under 6% are in poverty.. and a conservative estimate is that over 70% of those people choose to be in poverty (refuse to work, etc) or have mental or physical health issues that prevent work and become wards of the state)..

What most people consider "poor" in the US is actually pretty damn wealthy by the worlds standard.. People living in our "projects" (government provided housing) live significantly better than anyone in any of the photos above..

The US, despite liberals trying desperately hard to change things, doesnt prescribe to the same social welfare systems that Europe does.. and its honestly pretty proud that it doesnt..

In contrast to the US, by the German definition of poverty, roughly 16% of Germans live below the poverty line and another 5% live at "risk" of dropping below the poverty line.. Germany defines poverty as less than 1440 euro a month..

15.4% of French live below the French definition of poverty (1041 Euro a month)...

etc etc...

As isolated pockets yes. I could go make pics of a few places(but not many) here in Denmark it would look bad.

The US over a larger scale have bigger challenges:

Remember we(EU) don`t call us self the best and richest country in the world. You all do!.

 

[Altitude sickness]

Agree completely. I enjoy getting into the weeds and often skip over the basics.
The original post basically contends that home ownership is an inferior asset to stock ownership. That contention requires predicting the future, something that I try to avoid because I am often surprised.

You don’t have to guess. We have the history.
A residence is necessary shelter that hopefully holds its own in the short term. And gains some value in the long term. And it’s commonly a persons largest “Asset” .

The original message is that buying only the amount of shelter you need and getting from under the mortgage ASAP, instead of overspending and putting the rest of disposable income into the market has always been better for building wealth.

“Investing $100,000 in the stock market in 1970 would have made you significantly more money than buying a $100,000 house in 1970, with the stock investment likely growing to over $34 million by 2026, compared to roughly $1 million for the home, assuming reinvested dividends”

 

[Tubby’s Canteen]

I’m no economist but at the end of the day stock paper isn’t going to keep the rain of your head. I don’t know if home ownership is an asset or liability but to my way of thinking there is a value to owning property beyond the tangible. It’s an assertion to the world that fuck you this is mine this is where I was raised this is where my family will be raised. When you cross my property line your now in my world I make the rules on this piece of dirt not you and if you break my rules you’ll be asked to leave and or made to leave at my sole discretion.

 

[skydiver386]

No it's not.....lol.

Y'all need to quit whining.

When I lived in Yuma, the old joke went like this.

What's the easiest job in Yuma, Arizona? Weatherman.

What's the hardest job in Yuma, Arizona? Roofer.

 

[fourfive8]

“The US is the aggressor” You could not have your head further up your ass if you tried. Iran has been waging war on the civilized world for almost 50 years. The US has been one of the prime targets. Yes, you are indeed a jack wagon.

I can imagine KJE81 driving a 1970 Volvo with a tiny windmill and a tiny solar panel on top wired to a battery and electric motor under the hood. I’m also remote viewing a gofundme Greta bumper sticker.

 

[mdwest]

As isolated pockets yes. I could go make pics of a few places(but not many) here in Denmark it would look bad.

The US over a larger scale have bigger challenges:

Remember we(EU) don`t call us self the best and richest country in the world. You all do!.

You might want to find a resource that uses actual studies and facts rather than an AI voice over and opinions driven by liberal agenda…

It’s not a coincidence that the video focuses on public services, higher education, healthcare, and social services… rather than income, quality of life, economic stability, unemployment, etc..

Read prior posts… the majority of Americans dont support the taxation associated with the social services, healthcare, higher education, and public services of Europe…

For what it’s worth, I lived in a couple of the states featured… and the video is simply wrong (again, not a coincidence they provide no actual evidence supported by any study.. no interviews of actual people, etc)..

Regarding best and richest… there is zero doubt that the US economy is the largest in the world.. the US isn’t the only country that claims this… every country with 1/10th of a brain in its head claims this, because it is 100% factually true…

Being the best is a matter of opinion… you might love all of your social welfare.. as a rule Americans reject European systems… you might love your government being involved in everything you touch… Americans reject such a notion…what is best for you, only you can determine…

What I can tell you from a personal level is this… I have been blessed and privileged to have a career path that required extensive international travel.. I have personally been in more than 110 countries… I have also worked for a global institution that deeply studies global economies, global cultures, etc (The World Bank) and has social and economic programs and projects that it executes all over the globe to include many developed nations)…

Having spent a significant amount of time across most of Europe, Asia, North and South America, Africa, and Oceania.. and having been involved with and exposed to the highest levels of government in more countries than most people will ever see in their life…I can tell you that for me, the US is indeed the best country to live in… it’s not perfect… in fact it pisses me off routinely… but I’ll take it over the nonsense and incompetence I’ve seen in the rest of the developed world anytime…

 

[KJE81]

I can imagine KJE81 driving a 1970 Volvo with a tiny windmill and a tiny solar panel on top wired to a battery and electric motor under the hood. I’m also remote viewing a gofundme Greta bumper sticker.

Actually one can drive a modern SUV albeit non-electric with gasoline as fuel (which I do) and still understand that as the treaty of Nato is formed it cant be a Nato war unless Iran first attacked USA directly and USA then secondly invoked article 5...one just has to read the articles of the Nato Treaty to realize how it works

The North Atlantic Treaty

The Parties to this Treaty reaffirm their faith in the purposes and principles of the Charter of the United Nations and their desire to live in peace with all peoples and all governments. They are determined to safeguard the freedom, common heritage and civilisation of their peoples, founded on...

www.nato.int

 

[Aaron N]

We purchased our house in 2013 and paid it off in 2016. It is currently valued 2.5 times its purchase price. Two years ago it would have been 3X. It is most definitely an asset however you care to work the math. Yes, I know all sorts of "smart" people have great ideas about better places to put that sort of money. But there is also very real old school "value" in not dealing with a mortgage regardless of the assets appreciation and treating the property as any other investment.

On the other hand, I bought my first house at the peak of 2008 six months before you guys sent the world into a tailspin. After probably 50k in renovations, I sold the house in 2019 for 20k less than I initially paid because we found our dream acreage. I tend to look at a house more like a savings account as opposed to an investment. Sure a lot of the data points to renting vs buying, but they don’t factor in the headache of being held to a landlords whims, and the possibility of moving every few years.

 

[WAB]

I’m no economist but at the end of the day stock paper isn’t going to keep the rain of your head. I don’t know if home ownership is an asset or liability but to my way of thinking there is a value to owning property beyond the tangible. It’s an assertion to the world that fuck you this is mine this is where I was raised this is where my family will be raised. When you cross my property line your now in my world I make the rules on this piece of dirt not you and if you break my rules you’ll be asked to leave and or made to leave at my sole discretion.

Agreed. Our farm is worth roughly 2.5x what we have invested in it. However, its real value is shelter and food. We can go off grid if we have to, and we have the means to protect what is ours.

 

[Red Leg]

Actually one can drive a modern SUV albeit non-electric with gasoline as fuel (which I do) and still understand that as the treaty of Nato is formed it cant be a Nato war unless Iran first attacked USA directly and USA then secondly invoked article 5...one just has to read the articles of the Nato Treaty to realize how it works

The North Atlantic Treaty

The Parties to this Treaty reaffirm their faith in the purposes and principles of the Charter of the United Nations and their desire to live in peace with all peoples and all governments. They are determined to safeguard the freedom, common heritage and civilisation of their peoples, founded on...

www.nato.int

With respect to NATO, you are correct. But alliances also tend to create allies who support one another beyond the constraints of a particular treaty. A good example is the Falklands Campaign. At the time the Argentines seized the Falklands, the Regan administration was in the midst of a major hemispheric outreach effort with Argentina as a key component of that effort. The administration attempted for a short while to try to mediate the situation, but once it was clear that the Argentinian forces were not going to voluntarily withdraw and that Thatcher was intent on using military force to reclaim the islands, the special relationship with the UK prevailed over what were actually our hemispheric national interests.

US support was a critical factor. British access to Ascension Island made an air bridge to the theater possible; US national strategic intelligence assets supported the operation; we provided the then newest AIM-9L Sidewinder air to air missiles to the British guaranteeing air dominance over most of the operational area; and our logistical support - particularly millions of gallons of aviation fuel was critical.

Trump certainly owns some of this, but Starmer seems intent on consigning that relationship to the dustbin. The rest of NATO seems determined to simply become French.

 

[Brent in Az]

Y'all need to quit whining.

When I lived in Yuma, the old joke went like this.

What's the easiest job in Yuma, Arizona? Weatherman.

What's the hardest job in Yuma, Arizona? Roofer.
View attachment 753846

These days I complain when it gets above 80.
I need to move to cool mountain country.

 

[Wheels]

It’s been a long time since accounting classes and GAAP but the conversation regarding primary residences seems to be confusion between a balance sheet and an income statement. A balance sheet is a photograph from a specific moment in time, such has year end. An income statement is over a period of time such as one year.

In a balance sheet if the home has a positive value it is an asset. The note secured by a mortgage is a liability. A house is virtually always an asset unless you live in the house where the Manson family performed the Tate LaBianca murders or you wake up in your home next to Love Canal to find the EPA has declared it a toxic waste site.

In an income statement the home produces no income (I’m ignoring the possibility of a renter). It does produce expenses such as deferred maintenance, property taxes, insurance. It does cost to live in the home,

In talking to a CPA or a Chartered Accountant, you would be hard pressed to get an Unqualified Opinion if you wanted your primary residence listed as a liability.