Let’s say I have a lot of money sitting in hys bc I was dumb when I graduated and didn’t know shit about investing (still don’t really). I haven’t dumped it all in index funds but have been slowly dollar cost averaging. Since I am renting I am now wondering whether I should buy a house. I am not sure what home price I should target though. Like what percentage of my paycheck in the future should go towards a mortgage and what percentage towards index funds?
I need some savings to invest...
Skip real estate. It’s not liquid, high transactions fees and appreciation is uncertain. Go to Vanguard and buy VTSAX, hold it forever.
Real estate isn’t all that it’s made out to be. Yeah you get leverage and the gains on that leverage usually mean roi I’m invested cash is high, but high transaction costs and
Read about the 5 percent rule. If you can rent for lower than 5% value of the house do that and do not buy. Invest the money in stocks. This is actual data over last 100 years, stocks have consistently outperformed housing. Whenever housing goes up, stock goes up faster.
The only difference is that with real estate you get asset based leverage.
Wtf do real estate. It’s an asset that can make you residual income.
Did you read what I wrote...
I did. You can still use leverage to buy a home and rent part of it out. Then, it’s payed off faster and you have a residual income asset