> What you are really doing, when you buy a house, is forcing yourself in saving a liable equity for you and your family.
Yes, there's a forced savings component, but it's expensive in terms of opportunity cost. It's not unlike insurance agents who want to sell you life-insurance policies that have "investment" components to them, when what you really want is to buy inexpensive term protection and put the difference in price into better-returning investments.
Remember that Sal Khan's comparison is of an interest-only mortgage versus renting. If you also want to build equity, well then, that's additional money out of your pocket (non-tax-deductible).
> Remember that Sal Khan's comparison is of an interest-only mortgage versus renting. If you also want to build equity, well then, that's additional money out of your pocket (non-tax-deductible).
That will save you tens of thousands of dollars/euros in avoided interests over the years.
So maybe a true apples-to-apples comparison needs to be for the entire period that you own the house -- that is, for each case:
+ what is the total net value of the money you spend in each case, and
+ what is the total net residual value at the end of the period.
With term life insurance you get zero residual value at the end of the term; what you're paying for is nothing more than insurance protection, not an investment. Ditto with renting.
Of course it should. Buying a house is a long-term investment. You can't compare it to renting. If you do, of course it will be a more expensive solution. But what is the impact of owning over a life-time span? It could be an interesting analysis that i wish someone will do. Yet, i bet that owning will effectively create value for you and the family.
Yes, there's a forced savings component, but it's expensive in terms of opportunity cost. It's not unlike insurance agents who want to sell you life-insurance policies that have "investment" components to them, when what you really want is to buy inexpensive term protection and put the difference in price into better-returning investments.
Remember that Sal Khan's comparison is of an interest-only mortgage versus renting. If you also want to build equity, well then, that's additional money out of your pocket (non-tax-deductible).