Re:Owning nothing is now a luxury, thanks to a number of sub...
by maccard on Tuesday June 11, 2019 @05:09AM
(#20153891)
> You can't just tally up the renting costs while ignoring the freed up capital, this is the exact mistake people make when they prematurely buy.
And you're deliberately oversimplifying the calculation, which is just as bad. You're assuming a guaranteed return of 7%, and that the capital isn't touched for the years. If withdraw $50 from your investment capital per month to pay the rental, the numbers don't come out as favourably. similarly, if you reduce the returns (7-8% is an average return, but it's not a guaranteed return, especialy on smaller sums where you may have to pay $25 per trade, or 1+% fees in fund management every year, or tax on the returns).
Your point about renting being a viable option is valid though, your numbers are just inflated.
And you're deliberately oversimplifying the calculation, which is just as bad. You're assuming a guaranteed return of 7%, and that the capital isn't touched for the years. If withdraw $50 from your investment capital per month to pay the rental, the numbers don't come out as favourably. similarly, if you reduce the returns (7-8% is an average return, but it's not a guaranteed return, especialy on smaller sums where you may have to pay $25 per trade, or 1+% fees in fund management every year, or tax on the returns).
Your point about renting being a viable option is valid though, your numbers are just inflated.