Jmdatcs
Yeah, breaks your heart, don’t it?
You’re not misunderstanding at all. Opportunity cost is that simple.
If I can get 5% guaranteed on a government bond, and my buddy needs some help to get out of a jam (and I’m as sure as I can be he’ll pay me back) and he offers me 3%, if I give him the money I’m not doing a nice thing and making 3%, I’m an idiot that’s losing 2%.
At least according to the people that can only think of more more more.
It doesn’t always have to be greedy though. If you’ve got money you don’t need anytime soon sitting in your checking account doing nothing what your missing out on by not at least putting it in an interest bearing account is opportunity cost.
First of all, fuck landlords and double fuck people that buy up single family homes to rent out. This is not an endorsement, just a basic explanation of opportunity cost for anyone interested.
Fuck landlords, in case you missed the first one.
Now that that’s out of the way, opportunity cost is what you lose by not doing something else with your capital.
For example:
You assume you could make an average of 10% a year in the stock market.
You have 100k equity in a rental property.
You collect rent, after paying the mortgage, taxes, maintenance, and any other expenses you make 10k in a year.
That’s 10% of your 100k in equity, the same you estimate you’d make in the market, no opportunity cost.
Some number of years later between paying more of your mortgage and increase in the value of the property you have 500k in equity.
You only increased rent enough to cover increases in taxes, maintenance, and other expenses so you still only make 10k a year.
That is now 2% of your 500k in equity.
The 8% difference between the 10% you think you could make in the stock market if you sold the place and the 2% you’re getting without jacking up the rent, is the opportunity cost.
Of course there are more things to take into account, this is just to give you a basic idea.
Fuck landlords.
From cheap to very expensive and everything in-between. Big resealable bags to get the per cup price down. Having a couple small canisters you can refill from the bags makes it so you don’t open the big bags too often, if you did it every day it would probably get stale.
A very generous reward program that basically gets you 10% back.
And they always give me a few samples with each order. I’ve been turned on to some new stuff that way.
I usually get a few big bags of my staples (which are medium price) and some smaller weights of nicer stuff for when I want a really good pot.
For the sake of anyone in the future that might be subjected to the inane bullshit that issues from your deficient mind, I really hope you do feel that way. Sometimes valuable lessons are hard to hear. Good luck applying them, I’m sure everyone in your life would appreciate it.
I’m not trying to win by insulting you, I’m doing that because you deserve it. You should feel bad about what you are. If you feel shame for it maybe you’ll keep your mouth shut like a good little halfwit instead of vomiting out bullshit that might influence others to make a bad decision.
You can’t win so you keep putting words in my mouth. I never said mortgages are a risk and I absolutely didn’t say they were a loss in value. I’d say I didn’t know where you’re getting that, but it’s probably right out of your ass like everything else. I not saying now that there aren’t risks involved in buying a house but I never said there were, because that’s not what I’ve been talking about. I’ve just been refuting your nonsense about home equity as it applies to net worth and the rate you gain equity after buying.
In case you forgot, once again:
You said you have to pay off 50% of a house before it’s positive to your net worth. That’s not just wrong, it’s dumb as fuck.
You said it takes years or decades to break even selling a house. That’s not just wrong, it’s dumb as fuck.
Are you mentally impaired? Like diagnosed? I don’t want to make fun of you if you are, that would be mean.
Stop putting words in my mouth and stop moving the goalposts.
You said you have to pay 50% of your mortgage before a house adds to your net worth. That isn’t just wrong, it’s dumb as fuck.
You said it takes years or decades to be able to break even selling a house. That’s not just wrong, it’s dumb as fuck.
Whether or not is a smart idea for a particular person to buy a particular house or if it’s a good idea to invest in real estate vs something else are different discussions. I would bet it’s a bad idea for you because you seem unable to grasp even the most basic concepts.
But if you want to pretend you’re arguing with someone who says buy a bunch of houses and leave them empty to make money and ignore all the braindead shit you said so you can tell yourself you’re right, go for it. I hope that attitude takes you far in life.
Bro, you need to take the L here.
I’ll ignore you obviously having no idea what net worth means and trying to move the goalposts from your dip shit 50% comment again and just say this:
Even in a buyer’s market where the seller pays their realtor fees, the buyer’s realtor fees, and closing costs, you’re talking 7-8% tops, and I’m being generous here. If your home hasn’t decreased in value and it takes you decades, or even just years, to have 7-8% in equity, you are a class-A fuckup.