So the $88K I've invested since 2019 that turned into $168K total (up $80K in 6 years or 90%) is less valuable than his $36K in equity? You're really gonna sit up here and say that?
Do you understand how compound interest works? The longer you allow it to compound the greater it grows.
Those stocks aren't a retirement account it's just something I do with my spare money. I could decide today to liquidate it all combine it with my cash savings and buy a home putting all of it down with little to no mortgage on such a house out here.
You seem to think the equity in his house is more valuable than my investment portfolio equity. I completely disagree. My investments also put out $1200 a year annually in dividends. When I do buy a house I can take the income produced there and put it on the house mortgage trimming time off my loan if I choose.
His home is a dead asset that cost him annual taxes, insurance, maintenance and when he goes to sell will have a commission he has to pay on it. Thats not even getting to the interest that will have been paid on the home.
My stocks cost me nothing but the capital gains taxes on the dividends and the capital gains when I sell.
Nope I'm not saying that at all. I'm saying that while you invested 88K in the market, he invested 33K into a house. That leaves 55K left over. Let's give you the advantage and say your rent was somehow $250 cheaper per month. After 6 years that's about 18K. We subtract that 18K from the 55K and the homeowner puts in 37,000 into the market and it does what your return does and now he's sitting on about 72,000 in the market. He has the extra 36,000 in equity from his house and he also will eventually get about another 38,000 since that 33K he paid into the house + the mortgage he's paying isn't just flushing money down the drain the way renting is.
So after 6 years that gives you a 168K networth vs his 146K networth. So right now you have a 22,000 advantage and we're gonna assume the cash on hand and retirement accounts are equal so it still winds up being a 22K gap.
Now you're trying to buy the house he bought for 168K on 3.5% interest with 60,000 down on 204K with 7% interest. As the math above shows, your monthly payment for the next 24 years will now be $400 greater than his because you waited so over the next 24 years he will have put an extra $115,200 into the market. Then because you waited he pays his house off so for the 6 years following that he will have been able to put an extra 72,000 into the market so that's an extra 187k in the market for him that your $250 advantage will have to overcome since you waited 6 years to buy.
Also he put 33,000 (20%) down in his initial investment while you put 60,000. That's 27K he has allocated to the market vs house for you. Also, because you waited and the interest rates are what they are in 2025 vs what they were in 2019, the breh probably has another 6 figures in his pocket vs you just off that alone. You're paying higher interest on a higher priced asset over 30 years. Another hill your $250 per month for 6 year advantage has to climb.
The point of all this is that you have a small advantage in the short term by renting at $250 cheaper, but eventually his monthly housing expenses will be lower than yours and it will stay lower than yours and the gap in what y'all pay per month in housing will continue to grow until you buy a house and that gap will exist until you pay off a house. In the long term, the breh is mopping you up.
You're also disadvantaged in that the breh's emergency savings can be smaller than yours so that's again more money he can perpetually invest in the market.
