Why You Should Rent Even If You’re A Millionaire
About This Episode
Sam Parr and guest Ramit Sethi challenge the conventional wisdom of homeownership, arguing that renting is often financially superior to buying, especially in high-cost-of-living cities. They break down the 'hidden math' of owning a home, including opportunity costs and maintenance, while advocating for a life focused on intentionality and reduced physical burdens.
Episode Description
Show Notes
- 0:00Intro
- 3:30Set your rich life intention
- 7:30Don't confuse luck with skill
- 8:00Sam's journey from owner to renter
- 11:30Do the math: Real cost of ownership
- 15:30Buy for desire
- 17:30Pay in cash for large purchases
- 19:00The 10 year rule
- 24:30Ramit's list of must-haves
- 29:00Sam's dream house
- 32:00Sam's war on stuff
- 39:00When to overspend
- 44:00Millionaires who rent
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Key Takeaways
Run a comprehensive 'buy vs. rent' calculation that accounts for the opportunity cost of the down payment (invested at 7%), maintenance (1-2% of property value), and the fact that you pay more in interest than principal for the first 20 years of a mortgage.
Categorize a primary residence as a luxury purchase rather than an investment; if you choose to buy, do it for stability or personal happiness while acknowledging it may be your worst-performing financial asset.
Adopt 'Money Rules' to simplify life decisions, such as being able to pay cash for large luxury purchases or requiring a 10-year minimum commitment before considering buying a property.