00:00:00
If you don't get in the game of home
00:00:02
ownership and you rent in your 20s and
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you rent in your 30s, you're going to
00:00:06
turn around in your 40s and having not
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built any net worth.
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>> Am I not better off renting and
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investing in the stock market
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versus buying a house?
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>> I want to bust this myth because what
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happens is people come on, they go, "The
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stock market over the last 20 years has
00:00:23
averaged over 10% annually." People go,
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"The returns are better in the stock
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market than real estate." Yeah, but
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that's not apples to apples comparison.
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Why? When you buy a piece of real
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estate, when you buy a home, people
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don't typically pay cash for their first
00:00:38
house, they put down 20% and they borrow
00:00:42
the other 80%. Take a $200,000 home, you
00:00:45
put 40 grand in, $200,000 home goes to
00:00:49
400,000 in 10 years. This has happened
00:00:52
to so many people in the last 5 years.
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So, they've made 200,000 in profit. They
00:00:58
didn't put in 200,000, they put in 40.
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So, they got a five times return on
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their down payment. They go to sell
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their house.
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They don't pay taxes on the gain because
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when you own a home, at least in the
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United States, you own a home for over
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two years. If you're single, you get
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$250,000 in taxfree gains. If you're
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married, you get over half a million
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dollars in taxree gains. You get tax
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deductions on the mortgages. So, what
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happens is people come here and they go,
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"You know what? You shouldn't be you
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shouldn't be tied down. You need to be
00:01:29
flexible when you're young. You don't
00:01:32
want to have the responsibility
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and you should take the extra money and
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you should put it in a mutual fund. And
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you know what happens in the real world,
00:01:39
Stephen? People don't do that. They rent
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an apartment that's nicer than what they
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can afford and they spend all their
00:01:46
money and then they turn around in their
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mid30s and they have no equity because
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they haven't bought anything and they
00:01:53
also haven't saved money. It is an
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absolute freaking myth that people take
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this extra money that they could have
00:02:02
used to buy a house and they're going to
00:02:04
put it in the stock market. They don't
00:02:06
do that. Certain influencers that are
00:02:08
out there promoting the idea that
00:02:11
renting is better than buying a home.
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And when you look into why do these
00:02:15
people promote it? Either A, it's a
00:02:17
stick because it gets them clicks on the
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thumbnail, b they're selling something
00:02:22
else. They're trying to get you to
00:02:24
invest in their real estate. They're
00:02:27
selling you in a coaching program.
00:02:29
They're selling you, you know, to come
00:02:31
to their live event. But I'm telling
00:02:33
you, when you look at average Americans,
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average, I'm talking about ordinary
00:02:37
Americans, when you look at where their
00:02:38
wealth is, it's in home equity and it's
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in the stock
