why do we care if … why do we care if our fellow americans lose their homes? They won’t listen to you or anybody if you were to tell them not to buy one during the prebubble. The point is they saw cheap credit they borrowed and they got screwed, and its OK, they’ll learn not to spend money they don’t have in the future.
I tried not to … I tried not to laugh when I learned what the phrase “Using houses as ATMs” actually meant. I never realized owning a home means one is a trillionaire.
Funny I definitely … Funny I definitely had reverted back to the mentality of ‘personal residence = investment.’ Now I am second-guessing my first-time house purchase!
The explanation of the hidden costs of home ownership were eye-opening too. “One way or another you have to pay for shelter!” great point.
Another interesting concept is the value of flexibility. Can you put a dollar amount on the flexibility of a lease vs. a mortgage? Probably not, but the convenience is some kind of value.
Honestly, I just … Honestly, I just don’t see Americans doing that. If anything, I see the opposite: More credit, more debt, more foreclosures – because it’s hard to change ways of doing things when you’re used to living a certain lifestyle.
Also, what question … Also, what question are you talking about? My original comment had no question. It had a statement, that is, he sounds hypocritical when he says go Stock (which appreciates solely from appreciation, then flames Real Estate for being speculation because it’s counting on appreciation.
Where in the world … Where in the world did I even mention investment real estate within my first few posts? All I was doing was comparing the properties of real estate (which affect both private and investment) and stocks. Then someone started talking about investment housing and dividend paying stock so I responded to him about that. Then you start talking about private housing something completely different. Once again what is your argument and what are you trying to prove?
You need to watch … You need to watch the video again and reread what I wrote. The questions arose from personal residential housing, not real estate in general. This is precisely what I was referring to as well as Peter, since many Americans have lost their homes due to the illusion of it as being a wise investment. That’s it.
Let me get this … Let me get this straight. You were referring to the whole of real estate as a money sucker. You did not specify that it was just ones own home, however, when I refute your regular argument you go back and say you’re just talking about owner resided homes? I never said when I was speaking of wealthy people making money off the houses they live in (although I’m sure they usually do make a profit). I was speaking of real estate in general. Also, what is your point, there doesn’t seem to be one.
Hopefully you’re … Hopefully you’re joking. Wealthy people make money from buying houses they live in? Personal residence and real estate investments are not the same thing, as Peter Schiff explains. My friend did look at his condo as an investment and that’s the problem because Americans over built based on a phony economy.
LOL. Do you … LOL. Do you understand no investment is full proof? Even bonds carry risk. Investments never have a 100% chance of being profitable. If you want to bring out examples of houses causing people to lose money, fine. I can call out about 200x other examples of houses gaining money. Almost all of the wealthy in this country have made their wealth from real estate. Maybe it’s because your friend did not look at his house as an investment and chose badly.
If you buy a house … If you buy a house and lose your job, where is the investment? How about foreclosure? A friend of mine lost his job, but was offered a job in another state, and he’s now paying on 2 houses. After being on the market for over a year, he’s trying to rent it out, but still no luck(a condo in a great location). So it doesn’t bring in money, it sucks out money.
No! It’s better to … No! It’s better to have extra money in your pocket immediately for real investment. His example was perfect, $7,500/month to rent vs. 2.5 million, which would take over 30 years to pay off with interest. If you can afford 2.5 million upfront, great, but it’s still better to put that 2.5 million into a low risk fund which yields dividends, something a house won’t do.
Yes that was my … Yes that was my point. The term “free-market” is a fallacy, there is really no such thing, it’s just people in the absence of coercion.
My point being that, in the absence of a formalized system, people will develop varied modes of organization. Socialism and Capitalism will exist simultaneously, and in varying levels.
lol – you make … lol – you make great points. I used to think the same way. I totally agree that governments are no more trustworthy than businesses. But, as Ron Paul told Larry King, the solution to corporatism is the free market. Only in a free market can you re-allocate ‘your’ (ownership) resources (labor and capital) away from fraud, waste and abuse, and towards the public good. I understand perfectly well that our rights are not endowed to us by any creator but by mutual consent- i.e. democracy.
If the problem is … If the problem is that PEOPLE are selfish and dishonest, how does it solve the problem to institute a system where PEOPLE have power over other people? The whole notion of the state is a fallacy. The solution to dishonesty is voluntarism, being able to re-allocate your own resources away from the dishonest, and towards the virtuous, at will.
You don’t understand the nature of property rights, they don’t exist, they are defined subjectively, so of course you can share ownership if you agree to.
The socialist ideal … The socialist ideal assumes that everyone will be completely honest and unselfish. But people are inherently dishonest and selfish. You need laws and police to keep people in line. That requires government. All societies require government. The absence of government is anarchy. Free market societies at least recognize that it’s good to own things. But there is no such thing as sharing ownership. You either own something or not. You can’t share something unless you own it.
No, nothing about … No, nothing about Socialism inherently demands the existence of the state, it’s just a non-hierarchical form of organization based on all participants sharing ownership of their own labor. Do you think it’s wrong for people to agree to share ownership? Do you think that businesses should be run as plutocracies? It’s asinine.
In the absence of the state there will be varying shades of Capitalism and Socialism, because society itself is populated by people who think that way..
Everything is a … Everything is a mental construct, that doesn’t invalidate anything. Yes, capitalism and socialism are ideals (i.e. “conceptions of things in their perfection”) and perfection is unobtainable but, capitalism is a superior ideal because, in the absence of coercion by the state, people will ultimately seek to profit from their labor and capital. That’s not the opposite or absence of capitalism, it IS capitalism.
No, both capitalism … No, both capitalism and socialism are simply intellectual constructs used to define non-existent ideals. The reality is, and will always be, much more complex than our models of how reality should work.
In the absence of a state extortion racket, human beings will arrange their labor and resources independent of these meaningless ideologies, according to necessity balanced against individual value judgments. Both Socialism, Capitalism, Communism, and other social orders will simply co-exist.
Peter: What about … Peter: What about when the house is paid off? Then you’re no longer paying rent – extra money in your pocket every month. Can’t that be considered an investment? An annuity is a large sum up front in exchange for smaller periodic payments going forward. Isn’t home ownership basically the same thing – a large sum up front in exchange for NOT making small periodic payments going forward? (assuming you stay put once the home is paid off; also depends on the actual principal, interest, etc). Thx
God bless you! I’m … God bless you! I’m recently married and young and as one of the newer generation with some common sense in me… I could never wrap my head around a house being an investment when everyone explained it to me. Everytime I consider it the word “lunacy” comes to my mind. And as for the American dream… you took the words right out of my mouth. Home ownership is a lie, the American Dream was about potential as an individual!
I think that Peters … I think that Peters logic is pure sense, house flippers try to paint a reality construct to justify their speculation as investing at their childrens and grand children’s expense!
Go to shelter Flippers, pip and dot with your 17 and 20 house real estate portfolios deserve what they get
Peter Schiff video blog Oct 27th 2009 Also check me out on
December 26th, 2009 at 7:11 am
why do we care if …
why do we care if our fellow americans lose their homes? They won’t listen to you or anybody if you were to tell them not to buy one during the prebubble. The point is they saw cheap credit they borrowed and they got screwed, and its OK, they’ll learn not to spend money they don’t have in the future.
December 26th, 2009 at 7:11 am
I tried not to …
I tried not to laugh when I learned what the phrase “Using houses as ATMs” actually meant. I never realized owning a home means one is a trillionaire.
December 26th, 2009 at 7:11 am
Funny I definitely …
Funny I definitely had reverted back to the mentality of ‘personal residence = investment.’ Now I am second-guessing my first-time house purchase!
The explanation of the hidden costs of home ownership were eye-opening too. “One way or another you have to pay for shelter!” great point.
Another interesting concept is the value of flexibility. Can you put a dollar amount on the flexibility of a lease vs. a mortgage? Probably not, but the convenience is some kind of value.
December 26th, 2009 at 7:11 am
thats why i make …
thats why i make videos — i am trying to show people there is another way — nothing better than really owning every thing you own
December 26th, 2009 at 7:11 am
Honestly, I just …
Honestly, I just don’t see Americans doing that. If anything, I see the opposite: More credit, more debt, more foreclosures – because it’s hard to change ways of doing things when you’re used to living a certain lifestyle.
December 26th, 2009 at 7:11 am
There is an easy …
There is an easy way around that. Aggressively save and pay cash. No such thing as foreclosure if you own the property.
December 26th, 2009 at 7:11 am
Also, what question …
Also, what question are you talking about? My original comment had no question. It had a statement, that is, he sounds hypocritical when he says go Stock (which appreciates solely from appreciation, then flames Real Estate for being speculation because it’s counting on appreciation.
December 26th, 2009 at 7:11 am
Where in the world …
Where in the world did I even mention investment real estate within my first few posts? All I was doing was comparing the properties of real estate (which affect both private and investment) and stocks. Then someone started talking about investment housing and dividend paying stock so I responded to him about that. Then you start talking about private housing something completely different. Once again what is your argument and what are you trying to prove?
December 26th, 2009 at 7:11 am
You need to watch …
You need to watch the video again and reread what I wrote. The questions arose from personal residential housing, not real estate in general. This is precisely what I was referring to as well as Peter, since many Americans have lost their homes due to the illusion of it as being a wise investment. That’s it.
December 26th, 2009 at 7:11 am
Let me get this …
Let me get this straight. You were referring to the whole of real estate as a money sucker. You did not specify that it was just ones own home, however, when I refute your regular argument you go back and say you’re just talking about owner resided homes? I never said when I was speaking of wealthy people making money off the houses they live in (although I’m sure they usually do make a profit). I was speaking of real estate in general. Also, what is your point, there doesn’t seem to be one.
December 26th, 2009 at 7:11 am
Hopefully you’re …
Hopefully you’re joking. Wealthy people make money from buying houses they live in? Personal residence and real estate investments are not the same thing, as Peter Schiff explains. My friend did look at his condo as an investment and that’s the problem because Americans over built based on a phony economy.
December 26th, 2009 at 7:11 am
LOL. Do you …
LOL. Do you understand no investment is full proof? Even bonds carry risk. Investments never have a 100% chance of being profitable. If you want to bring out examples of houses causing people to lose money, fine. I can call out about 200x other examples of houses gaining money. Almost all of the wealthy in this country have made their wealth from real estate. Maybe it’s because your friend did not look at his house as an investment and chose badly.
December 26th, 2009 at 7:11 am
If you buy a house …
If you buy a house and lose your job, where is the investment? How about foreclosure? A friend of mine lost his job, but was offered a job in another state, and he’s now paying on 2 houses. After being on the market for over a year, he’s trying to rent it out, but still no luck(a condo in a great location). So it doesn’t bring in money, it sucks out money.
December 26th, 2009 at 7:11 am
No! It’s better to …
No! It’s better to have extra money in your pocket immediately for real investment. His example was perfect, $7,500/month to rent vs. 2.5 million, which would take over 30 years to pay off with interest. If you can afford 2.5 million upfront, great, but it’s still better to put that 2.5 million into a low risk fund which yields dividends, something a house won’t do.
December 26th, 2009 at 7:11 am
Yes that was my …
Yes that was my point. The term “free-market” is a fallacy, there is really no such thing, it’s just people in the absence of coercion.
My point being that, in the absence of a formalized system, people will develop varied modes of organization. Socialism and Capitalism will exist simultaneously, and in varying levels.
December 26th, 2009 at 7:11 am
lol – you make …
lol – you make great points. I used to think the same way. I totally agree that governments are no more trustworthy than businesses. But, as Ron Paul told Larry King, the solution to corporatism is the free market. Only in a free market can you re-allocate ‘your’ (ownership) resources (labor and capital) away from fraud, waste and abuse, and towards the public good. I understand perfectly well that our rights are not endowed to us by any creator but by mutual consent- i.e. democracy.
December 26th, 2009 at 7:11 am
If the problem is …
If the problem is that PEOPLE are selfish and dishonest, how does it solve the problem to institute a system where PEOPLE have power over other people? The whole notion of the state is a fallacy. The solution to dishonesty is voluntarism, being able to re-allocate your own resources away from the dishonest, and towards the virtuous, at will.
You don’t understand the nature of property rights, they don’t exist, they are defined subjectively, so of course you can share ownership if you agree to.
December 26th, 2009 at 7:11 am
The socialist ideal …
The socialist ideal assumes that everyone will be completely honest and unselfish. But people are inherently dishonest and selfish. You need laws and police to keep people in line. That requires government. All societies require government. The absence of government is anarchy. Free market societies at least recognize that it’s good to own things. But there is no such thing as sharing ownership. You either own something or not. You can’t share something unless you own it.
December 26th, 2009 at 7:11 am
No, nothing about …
No, nothing about Socialism inherently demands the existence of the state, it’s just a non-hierarchical form of organization based on all participants sharing ownership of their own labor. Do you think it’s wrong for people to agree to share ownership? Do you think that businesses should be run as plutocracies? It’s asinine.
In the absence of the state there will be varying shades of Capitalism and Socialism, because society itself is populated by people who think that way..
December 26th, 2009 at 7:11 am
Everything is a …
Everything is a mental construct, that doesn’t invalidate anything. Yes, capitalism and socialism are ideals (i.e. “conceptions of things in their perfection”) and perfection is unobtainable but, capitalism is a superior ideal because, in the absence of coercion by the state, people will ultimately seek to profit from their labor and capital. That’s not the opposite or absence of capitalism, it IS capitalism.
watch?v=yAa6dYBwy7M
December 26th, 2009 at 7:11 am
No, both capitalism …
No, both capitalism and socialism are simply intellectual constructs used to define non-existent ideals. The reality is, and will always be, much more complex than our models of how reality should work.
In the absence of a state extortion racket, human beings will arrange their labor and resources independent of these meaningless ideologies, according to necessity balanced against individual value judgments. Both Socialism, Capitalism, Communism, and other social orders will simply co-exist.
December 26th, 2009 at 7:11 am
Peter: What about …
Peter: What about when the house is paid off? Then you’re no longer paying rent – extra money in your pocket every month. Can’t that be considered an investment? An annuity is a large sum up front in exchange for smaller periodic payments going forward. Isn’t home ownership basically the same thing – a large sum up front in exchange for NOT making small periodic payments going forward? (assuming you stay put once the home is paid off; also depends on the actual principal, interest, etc). Thx
December 26th, 2009 at 7:11 am
God bless you! I’m …
God bless you! I’m recently married and young and as one of the newer generation with some common sense in me… I could never wrap my head around a house being an investment when everyone explained it to me. Everytime I consider it the word “lunacy” comes to my mind. And as for the American dream… you took the words right out of my mouth. Home ownership is a lie, the American Dream was about potential as an individual!
December 26th, 2009 at 7:11 am
In two years you …
In two years you won’t reconize america – lindsey williams.
December 26th, 2009 at 7:11 am
I think that Peters …
I think that Peters logic is pure sense, house flippers try to paint a reality construct to justify their speculation as investing at their childrens and grand children’s expense!
Go to shelter Flippers, pip and dot with your 17 and 20 house real estate portfolios deserve what they get