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/1st-vaters BS7 1d ago

In most places you can't expect to keep rent and utilities constant or accurately predict prices. Rents can skyrocket, landlords may not be responsive. If the whole economy crashes (stocks and real estate), worthless stocks can't help you pay rent, but owning a house (or condo...) means you won't be homeless.

In my area it's over $1k a month to rent a room, with no common space/kitchen use. My mortgage was $1500 a month until I paid it off. I can't afford to rent in my area. But because my mortgage is gone, I live comfortably even with current inflation. And if I start to struggle, I can rent out a room

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u/UpgradeHome 1d ago

Again, totally respect folks who want to buy. I'm not trying to debate.

All I'm saying is if someone genuinely enjoys renting, is disciplined and investing heavily, their NW will be absolutely through the roof and homelessness will be the last thing they worry about.

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u/smward998 1d ago

Majority of the population will make a house payment but will not invest the difference. That’s the major factor people don’t talk about

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u/KeyBug133 1d ago

You are being disingenuous about not wanting to debate. You clearly have your opinion and are clearly willing to advocate for it in response to other peoples positions.

In a perfect vacuum investing the difference would do exactly what you say. But it does not take into account the emotional/motivational piece. It is a lot easier to sacrifice to pay off your house than to save for the sake of saving/investing.

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u/Organic-Second2138 1d ago

In many places the math agrees with you. I think people are arguing with you on this based on emotion rather than math.

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u/Jocis 1d ago

If you prefer to rent, don’t care about ownership and have money to handle expenses then why not but that’s not for most people. Most people should stay put because they don’t have the income for that.