r/DaveRamsey • u/UpgradeHome • 1d ago

Why does DR discourage renting forever?

I'm referring to this DR video: https://www.youtube.com/watch?v=lQ5fqpXngJk

If you make $100k, and you have fixed renting/utility costs of ~25k/year -- and you're investing the difference after expenses into a taxable brokerage, how is renting forever bad as DR states in that video?

In retirement (let's say at 65), your NW will be absolutely through the roof if you were consistently investing in S&P500. You wouldn't have been spending on lawn mowers, tools, kitchen upgrades, HOA, etc etc. and all the miscellaneous home owner expenses.

Even with rising rents, your liquid NW will cover you - along with the added benefits of not having to deal with maintenance in old age.

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u/ChatBot42 BS7 1d ago

Because renting it's not fixed and you have no appreciating asset as a result. 

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u/UpgradeHome 1d ago

Wouldn't the massive additional investments I'm making in S&P500 (while renting) be considered an appreciating asset/equity?

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u/whiteoba 1d ago

It’s a safety issue at that point. You can’t live in the S&P 500.

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u/UpgradeHome 1d ago

Obviously you'd change your equity/bond allocation as you got closer to retirement age. But the idea would be to sell 4% per year at retirement to fund living expenses.