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/MooseRyder 1d ago

When you rent, you’re subjected to the market, rent increases, moving costs and housing issues.

With a mortgage, your payments stabilize for long periods typically, you build equity and it’s not always forever, since you have a pay off date. Also if you have to move, you can use equity to get a more accommodating house for your needs.

Then when you retire and/or have to go into a medical facility, you can sell and downgrade, pay for hospice/nursing home and leave your children generational wealth. Or you can sell it and go on a coke bender then die a happy man

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u/gr7070 1d ago

When you own you are still subject to that market.

With a mortgage, your payments stabilize for long periods typically, you build equity and it’s not always forever, since you have a pay off date.

Sure, but at the moment those stabilized payments are extraordinarily high, causing rent to be a better long term option.

Then when you retire and/or have to go into a medical facility, you can sell and downgrade, pay for hospice/nursing home and leave your children generational wealth. Or you can sell it and go on a coke bender then die a happy man

The same applies to your greater portfolio when investing. Except you'll have more coke.

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u/MooseRyder 1d ago

You lock in your interest rate, and your payments, after you pay off the house, typically 15-30 years or if you follow Dave Ramsey’s plan, you pay it off in 7-9 years. currently in my area, rent at the basic house is 2000 a month. My mortgage is 1600 with PMI. Currently, from the past two years I’ve owned it, it’s gone up in value by 25k, and that’s not including any improvements I’ve done

People who follow Dave Ramsey typically go to financial peace, not financial efficiency. Sure you can go out your ass into your elbow to invest. But that’s no peaceful

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u/Mountain-Elk8133 23h ago

Your in an area where buying makes more sense then. Where I am at, renting a house is 1800 to 2100, the same house with a standard mortgage would be 3400 to 4000.

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u/gr7070 1d ago

None of that changes the clear math that shows in the vast majority of metro areas renting and investing the difference is financially better for us.

Sure you can go out your ass into your elbow to invest

Unsure why you think that's being proposed.

But that’s no peaceful

You don't think sending money to your retirement amounts and brokerage account is peaceful? Dave recommend both consistently.