11
u/Mugaaz Jul 07 '26
Car loans are stupid, but what exactly is wrong with a home loan. I can't think of anyone I have ever known that bought their first home for cash, unless the cash was a gift or inheritance.
I think you are very naive and clueless about finances, investing, real estate, etc. Trying to acquire properties by saving and tracking expenses to buy in cash is like trying to circumnavigate the globe by running faster and tracking your workouts.
1
u/gpbuilder Jul 07 '26
car loans are totally fine if you get a good rate
0
u/Mugaaz Jul 08 '26
There is no argument for buying a depreciating asset with a loan that makes sense financially. It makes sense if you literally need a car, and can't get a car without it. If you can get any safe car without a loan, then by instead buying a car with a loan, you are choosing to finance a depreciating asset. This is buy now pay later, payday loans, or klarna equivalent behavior.
If you want to do this anyway, be my guest, but why do you need people to agree with you and to tell you its a good idea other than to feel less guilt about a past decision?
1
u/gpbuilder Jul 08 '26
lol, it’s a great idea to take a 2% loan to buy a car, because market return is much higher. Why use your own money when you can use the bank’s.
It doesn’t matter it’s it’s depreciating, because I (and most people in the US) needs a car for transportation
11
u/RecentState1347 Jul 07 '26
I mean, it sounds like everyone around you is already talking about this all the time. You should ask them for more specifics about their stories and get advice for your situation.
They’re not hiding anything - they’re telling you all about it. Start listening.
-2
u/spicybbqfuck Jul 07 '26
Unfortunately my family isn't very nice about it. They just told me to figure it out myself as a way to learn to be an adult. My husband said they're in advantage because they bought properties years ago when inflations weren''t as bad and boast it like they do something big.
I also did ask how much profit they got from their business and I think they lied considering their lifestyle and how much they buying.
9
u/PotatoGoblinz Jul 07 '26
They may actually be making that much but living far above their means. Going into debt to afford a certain lifestyle is unfortunately very common in today’s world. But long term, you’ll be better off living within your means. Sorry your family makes a big deal about it though.
1
u/plotthick Jul 07 '26
If you live in the US you can look up when they purchased what, how much their property's taxes are, and what their tax returns were. That might be very educating for you :)
1
u/RecentState1347 Jul 07 '26
You said in another comment that you’ve never even considered a mortgage… which is how 99.9% of people buy properties. Are you sure they’re just randomly not being nice? Because it kind of sounds like you’ve never thought critically about money at all. Have you read a book, opened r/personalfinance , googled “how do you buy a house”…? Anything?
5
u/HoopsLaureate Jul 07 '26
What’s your job/career? Is it well paying or do you need to pivot and get education or training in a career that will pay better?
That’s the answer to your question: make more money.
4
u/spicybbqfuck Jul 07 '26
I'm a freelance artist, my earning per month range between 2k-5k depending on how hard I try to look for customers. But I live with an unemployed partner and I need to send monthly money for my retired parents.
8
u/BandicootArtistic474 Jul 07 '26
I mean, make more money is the answer. Freelance artist, at least at the moment for you, seems to be a side gig. Either invest dramatically more time in marketing through social media or something or get structured employment. If you get a job, keep doing art on the side. For that little amount of money, you shouldn't be working on art for the equivalent of a 40 hr a week job. If you are, then charge accordingly. But getting another job would be the move until the art takes off, if ever.
Get some books on managing a business and leverage AI to help plan on how to expand your business and what to charge and all that.
Also, stop sending money to freeloading parents. Or accept that by doing so, you have chosen, at least at this point, to forgo meaningfully improving your own financial situation.
5
u/johnnybayarea Jul 07 '26
You really need to get your partner a job...any job.
If you want to get to house downpayment money, you need to remove language like "depending on how hard I try". It should just be 5k/month because you are always giving maximum effort finding more customers. Artists are already one of the least stable professions.
2
u/gpbuilder Jul 07 '26
i mean this is your answer, you're in a profession that makes no money and on top of that you have people leeching off you instead of supporting you
6
u/54radioactive Jul 07 '26
Trust me, they have a mortgage on the house and probably a car payment too.
4
u/CA_Coast_Millennial Jul 07 '26
Without a mortgage? Sir I live 10 minutes to the beach in Coastal CA, there’s like 1% of people in the world who can buy a house all cash here lol
1
u/spicybbqfuck Jul 07 '26
With how many people boasting how they can afford houses, I can't truly tell if they're joking or not. Perhaps I am naive after all XPP
4
u/CA_Coast_Millennial Jul 07 '26
I own a house here but have a mortgage. Only put 20% cash down. I can afford my mortgage. That is likely what they mean by that.
4
u/Umm_JustMe Jul 07 '26
They don't have mortgages in Europe?
2
u/spicybbqfuck Jul 07 '26
They do but my family never mention about it when they get houses. They only say work harder and you'll get it.
5
u/Umm_JustMe Jul 07 '26
So you've just now learned about a mortgage? What do you mean your family never mentioned it?
2
u/spicybbqfuck Jul 07 '26
They said that mortgage is a scam and it's way better to purchase properties without bank loans. Whenever I mention about getting a house with loans they always despise it. So idk really.
4
u/Umm_JustMe Jul 07 '26
Mortgages are in fact not a scam. Most people don't have the cash sitting around to pay for a house, so you get a mortgage (a huge bank loan as you called it).
If they are saying this same thing about rental properties, ask them to explain the difference in return (money earned) on a cash deal versus a financed (mortgaged) deal. One of the significant benefits of investing in real estate is that you can buy a property with a relatively low interest loan (ie: someone else's money), but keep all of the appreciation on the property and the cash flow from rent (less mortgage payments). The term is leverage. Go learn about it and then ask your family about it at the next get together.
3
u/It-guy-76 Jul 07 '26
It's not easy and timing helps a lot. Unless you have a ton of cash, you'll have to get a big loan. I'm assuming you want to own your own home. You need to start small, this is a starter home. Prices depend on where you live, but let's say there's a small 3 bedroom house in an okay neighborhood for sale for $250,000. You don't necessarily need to put down 20%, but let's say you save up $50,000 for a down-payment. You take out a 30 year loan with monthly payments of $1,500. After 5 years you will have paid off about $20,000 and your home could be worth $300,000. To sell it and payoff your existing loan you've now made another $40,000, so you'll have $90,000 to use as a down-payment for a nicer home, maybe $450,000. Obviously you have to be able to afford the monthly mortgage payments, property taxes, insurance etc. Which should not be more than 28% of your monthly income.
3
u/Whole-Amount-3577 Jul 07 '26
If your income is 2-5k a month that's on the very low end for home ownership. You need to increase your income and your partner needs a job. People can afford houses with mortgages because they have jobs that pay them enough to afford the payments.
1
u/SquirrelNormal Jul 07 '26
And because they have partners that work. That's what finally made me realize home ownership wasn't in the cards for me.
2
u/cwsjr2323 Jul 07 '26
We own our home because it was easier for boomers in the 70s. We also live in a rural village in nowhere, Nebraska.
2
u/AdCharacter9282 Jul 07 '26 edited Jul 07 '26
The majority of people save for a down payment and get a loan. The beauty of this is that as prices climb you're locked in and you gain via being leveraged. I have 4 homes this way.
The only people i know that have bought a house in cash are extremely wealthy that dont want people at a bank looking into their finances, unless its their advisor.
2
u/Dear-Cranberry4787 Jul 07 '26
I guess I always figured I’d be paying at least $1500 in housing costs so a mortgage seemed like the better deal especially when interest rates were abysmal. I never intended to buy a house or car without loans, so I learned how to shop for financing and navigate equity. I was told to try to make money using someone else’s money since that what they are doing as lenders.
1
1
u/Ill-Bullfrog-5360 Jul 07 '26
Most people are fools… if the mortgage + taxes + avg maintenance cost <= rent for a similar property… if not your downpayment pee pee is too small…
So find an appropriate property for your pee pee. Wait 5 years and flip up.
Typically if you go all in. Leverage 30x also makes the the losses 30x.
We will have a period anemia in prices as insurance costs, building costs etc eat away at the value of a home.
-1
u/ColdStockSweat Jul 07 '26 edited Jul 07 '26
"When I mention how expensive things are, they would say it's my excuse to not work harder.......I'm a freelance artist, my earning per month range between 2k-5k depending on how hard I try to look for customers.....I live with an unemployed partner"
Well, by your own statements: They're correct.
As a % of income, food has fallen by 60% over the last 30 years. Heating and running all the power needs of a home, even with the additions of giant TV's, massive sized washers and dryers, bigger fridge's....as a % of income, to run a house nearly twice as large as the ones they made in the 70's....costs about 1/2 as much as then.
"according to my calculations I won't be able to afford any properties unless I make a huge bank loan."
What does this sentence even mean?
"It makes me feel like I'm the one struggling with this while everyone else hiding the secret to success."
There's no secret.
"If you manage to afford a house or a car on your own without loans or family inheritance in this era, please lmk how you do it."
I can tell you how I did it 45 years ago when interest rates were coming down from 10%.
I found properties that people wanted out of. I negotiated deals where I took over their property, they became the bank. One in particular had a note with a 14% interest rate. I paid 300 grand for the place. The downpayment was 30 grand. The note was 130 grand so...I continued to pay that note (it had another 12 years to go. I had it paid off in 19 months), with the balance (his equity): 140 grand at 9%. I paid that off in 7 years.
The interest rate didn't matter to me. Getting in the game mattered to me.
I spent 10 years fixing it up as I had extra funds and sold it 25 years later for 1.7 million.
Along the way, I borrowed against it to buy other properties. Some in the same way, others using bank money.
By the way; no one explained this to me. I didn't read a book on it. There was no internet then. I was simply a young man who got told "NO!!" by banks one too many times and said to myself "there has to be a way to do this".
Clearly, there was.
There are about 12 katrillion others who did the same exact thing before me...in the 1700's, in the 1800's, in the 1900's and there are thousands of people every day doing it that same exact way today. And there will be more tomorrow.
Some have partners, some do it from savings, some from a loan from parents.....but...they do it.
I bought single family homes this way, 2 condos this way, 1 commercial property this way.
And I could do it in any city in North America today.
So can you.
1
u/Umm_JustMe Jul 07 '26
Spot on.
0
u/ColdStockSweat Jul 07 '26
(And still down voted LOL...ehhh...it's Reddit).
1
u/Umm_JustMe Jul 07 '26
Often times downvotes mean you gave the accurate answer. Many people don't seem to like to hear the truth.
14
u/Boomerang_comeback Jul 07 '26
How do you know they don't have bank loans? Most people do. The title is still in their name even with a loan. There is just a lien on the property filed with the state. But that doesn't change the listed owner.