Most Replayed Moment: Is Renting Keeping You Poor? What's The Actual Cost Of Home Ownership? David Bach

This is one of the hot topics of conversation we've had on the show several times is many of my guests that are sort of financial advisors say that owning a home is a bad investment. I think from what I understood from the research and from reading your books that you feel differently. about that. Yeah, I mean, I couldn't feel more differently. When we look at where is wealth created in the United States and also abroad, it's in two places. It's in home equity and it's in the stock market. So when you look at housing and you take someone who owns a home and we'll talk about it, I know it's hard to buy homes right now. But when you look at people who own a home Homeowners in America, follow this for one second. Homeowners in America are worth 40 times more than renters. So the average homeowner in America today is worth over $400,000. But this doesn't establish causation. That doesn't mean that buying a home made them rich, right? It actually does. And I'm going to go through that here. So the average renter is worth $10,000. Right. So why why does buying a home build wealth and how much wealth in the United States is now in home equity? Wall Street Journal just ran an article on this came out two days ago. There's thirty four trillion dollars now in home equity in America. This number has gone up 90 percent since before covid. The other money is in retirement accounts, which is 60%, 70% in stocks. There's $45 trillion now in retirement accounts. So those two things alone equal $80 trillion, right? Like when you want to go like, where are the breadcrumbs? Where's wealth being created? Where's wealth being created? It's right in front of us. Now, the problem that we have in the United States, but also, look, we're here in London right now. The problem we have in so many cities is that real estate keeps going higher and higher and higher. And people's incomes are not keeping pace with the cost of buying a home. So when someone comes on a show like this and says, look, you don't have to buy a home. It's cost more to have a house than rent. You know, I watched one of the shows. I won't say who it was. It doesn't matter. They all say the same thing. Don't buy a house. You'll be trapped. You'll have to pay real estate taxes and you'll have to pay insurance and things break. They go through all these expenses. And it makes it sound like, oh, yeah, if I rent, it'll be cheaper. Right. So who do you think pays these expenses when you rent? You do. The landlord passes the cost of these expenses on to the renter ultimately. Why do they do this? Because people who buy real estate buy it for an investment. They buy it for an …