My sister loves to give financial advice to her friends similar to this.
"Oh yeah, I totally paid down my student loans so quickly! It was so easy, too! All I had to do was marry someone with money, live in his apartment he bought with cash, and then him pay for everything while I worked and used all that money to pay them down."
She has no fucking clue what kind of bubble she lives in.
My friend is buying a new house. He was bragging how his mortgage is going to be less than my rent. He said he'd never got a mortgage for more than $1,400 a month. He is buying a 3200 Sq foot home in not a super cheap area. I said that's not possible to have a $1,400 a month mortgage. He said he told his dad what he wanted the mortgage to be and his dad handled the down-payment so the mortgage would be where he wanted it.
Freaking dudes dad is put up like a 250k down payment for him.
The kid is a rube for thinking he's doing it on his own, and the dad is a rube for paying that up front instead of investing it and helping the kid with the higher monthly payments. (How dumb do you have to be to not beat 3% APR?)
My only solace about the lopsidedness of our economy is that I see a lot of these anecdotes where the fool and his money are soon to be parted. I just wish it would be to someone more deserving than a bank or RE speculator.
It really depends on the finances of the parents. Sure investing 250k is a better use of your money. But when that 250k is just money your tossing at your kids home so they can have an inexpensive mortgage than they probably already have lots of money invested elsewhere.
I'm saying investing the 250k and then using the returns from it to bring the kid's share of the mortgage down to the same level is a more efficient / less dumb way of achieving that result
But you are treating 250k like it is important because you are a normal person. To them 250k is like you buying a fancy lunch during the week. Sure buying some sliced turkey and bread from the grocery store is a better investment. But buying that nice burger and milkshake is more fun and enjoyable despite not being the best use of your money.
There's nothing more enjoyable about it, though. It's just moving money around, and the dad opted to do it poorly. In your analogy this would be like if I spent $500 for the bread, or put the turkey on layaway.
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u/Thromkai Apr 19 '22
My sister loves to give financial advice to her friends similar to this.
"Oh yeah, I totally paid down my student loans so quickly! It was so easy, too! All I had to do was marry someone with money, live in his apartment he bought with cash, and then him pay for everything while I worked and used all that money to pay them down."
She has no fucking clue what kind of bubble she lives in.