everyone this episode is gonna make a bunch of people angry i think it's gonna make a bunch of people angry and here's why so we're gonna discuss renting versus buying i saw recently on tiktok or something like that there were so many people complaining that it's too expensive to buy a house and they're complaining about renting and i've got a surprise i think it's way better to rent and i'm gonna explain my reasoning and i know that on the surface that's gonna make a lot of people angry but hear me out and we have my friend ram remit safety ram remit is famous or writing a book called i will teach you be rich he also has a famous netflix show called i will teach you be rich and he gives his explanation as well i think this my anger a bunch of people listen to the entire thing before you judge and then comment on youtube so go to youtube and comment and let me know what you think and by the way i just looked at youtube right now seventy percent of people who watch our videos are not subscribed to our channel that is ridiculous to me because we have a gentleman's agreement with this podcast and what that what does that mean that means if you've ever listened to more than one video or listen to more than one podcast you need to go to youtube go to my first million and click subscribe we call the gentleman's agreement because we can't track that you're actually doing it but sean and i and people like ram me we make content for you all the time and all we ask in exchange is just clicking subscribe it means very little to you it costs you very close to nothing and it means a lot to us so please do that and i hope you enjoyed today's episode and let me let me know what you think of the comments of youtube if you agree or disagree renting versus fine alright let's get to it i feel like i could rude where to know i could be what i want to from at all in in like a days off on the boat alright we're live never ram me so today i had you on because you and i are a little bit of an agreement in agreement on a few topics one of them being that even if we think that you can afford it which i'm sure we could we could afford to buy a home we actually prefer to rent and most people at least online and amongst even our friend group think that that's insane and i wanted to have you on to discuss kind of your opinion on buying versus renting to discuss some of the numbers behind it and we're gonna get tons of comments we're gonna try and defend our argument against all of them before they actually come i don't need defend it i already know the answer like there's no defending it's math it's basic math here's my position let me state it very clearly because for the last thirteen years i've gotten about a hundred and fifty comments a day telling me that i'm stupid and i think i turned into the joker around two thousand twelve when you know random people were telling me it never makes sense to rent you're always throwing money away on rent you're not building any equity equity is really important and what are you gonna leave to your kids and all and on i wanna pay my landlords rent etcetera well and you actually do a funny job by the way of sharing the comments that you got on all your youtube videos typically the comments are something like land is always a good investment or yeah you're not really wealthy if you don't actually own land or like people tell me that i'm poor because i don't own a house first of all that's actually quite insulting because not everyone can afford to buy a house doesn't mean you're poor just because you're renting there actually a lot of people who rent by choice including me and potentially you but anyway let's okay here's my position for the biggest purchase of your life which for almost everybody is a house you have to run the numbers because sometimes it's financially beneficial to buy and other times it's financially beneficial to rent and this this should not be controversial it's like very straightforward simple especially if you have lived in a high cost of living city new york san francisco la i've lived in all three cities however for some reason saying that basic concept is like me telling everybody that the sky is green and by the way you said sometimes it is profitable sometimes it isn't there's a a third part of that sentence which is also who cares like that that is an important thing when people when so usually my take on this situation i try my hardest never to use certainty like certain certain words so i i i would never say always or never that's nonsense that's crazy to say that but usually my take is or my take now is historically in many cases in fact maybe even most cases it is buying a home is not more profitable than renting and what people say is well i shouldn't so why are you buying a home they'll say and like well because it makes me happy why did i buy a steak last night you know why did i do this other stuff this you know it makes me happy yeah my other point is that doesn't mean it's a horrible investment i'm just saying compared to the alternatives i actually think it's not great and then and people will say well but i made money at my house in this house i've done it before and i say yeah it can happen sometimes yes it definitely happens sometimes and particular particular and they'll and they'll also say so should i never invest in real estate it's like no because investing in a apartment building or some type of development where it's the intention is cash flowing and the intention is number one investment many times be a great idea but historically if you look at the trailing fifty years of the s and p five hundred of the average home growth annual growth rate and and rent that is of equal quality if you just run the numbers i think more often than not in fact not sometimes yes sometimes no more often than not it's actually not as profitable or it's less profitable to buy than this rent have you done like the historical math i've seen a historical math on how the appreciation of homes purchased homes which shockingly for over about a hundred years is right around inflation people find that very hard to believe it's like three and a half percent yeah and what they typically will say their first response is quite funny they go my house went up twenty six percent in the last two years and i go i wonder if anything historically a historical abe collaboration happened in the last four years such as a worldwide pandemic and generational shifts i wonder but that comment is actually quite revealing because it reveals rec bias the fact that what happened to us in the last two or three years is something that we extrapolate will happen forever you hear people saying this all the time they're like remember when we were younger it's like people would say stuff like my myspace is always gonna be on top like it's dominant that changed people believe that right now about amazon facebook apple that will change in our lifetime when there's a major world war people believe things will never recover they do so if you wanna be a great investor you know you gotta look at a big big big picture ensure things have appreciated that's awesome for the people who own a house and they can make their payments i think that's awesome i'm really happy for him but i still made more money renting that i would have owning and by the way i'm in the category where i i currently own a home i own my home now i'm moving and i'm renting a house i'm i'm i haven't decided if i'm gonna sell my house or rented it out i'm making that decision in the next couple weeks but if i decide to sell it i'm actually gonna have made a profit because i very i got very lucky and it it just it worked out now but here's i i gotta tell you something you said something the other day on twitter that i really liked you said the the older i get the more i appreciate what role luck played in my success what i said was what i believe is basically when i started my career it was like pull yourself up by a bootstrap make it happen like it's only i'm the only one responsible for my wins and losses and i actually think that that's an alright attitude to have when you're like doing it because you think the internal focus could of control like it is up to me i have to do something great but then when things work out in my favor i reflect after a few years and i'm like oh my gosh like that worked out like perfectly it had nothing to do with me it just like for example when i sold the company the ceo of hubspot a few days after the deal closed he got into a life threatening accident and had that happened three days before or one or ten one week or two weeks before the deal closed everything could have changed and that had nothing to do with me it just was luck and so there are many examples where like it just got lucky and in but the case of selling my home and buying my home everyone thought it was not gonna be a good investment and i didn't think it would be either and it just totally got lucky that that is luck i think that it's okay to be lucky it's actually great fantastic sometimes lux strikes let's take it fantastic but i also think super important to be honest about when you are good or when you are lucky so i have a question for you because i've found that when people buy a house they rarely want to rent afterwards and so now you're going to rent what does that feel like for you so i'm moving to a place where i intend to rent i don't know how long i'll rent it for two years five years don't know and i wanted to rent a completely furnished home and the reason being is i don't want i didn't wanna own much of anything i didn't wanna own a lot of stuff because i have a small house in in austin and it's twenty two hundred square feet i have to fix stuff all the time and that's a small place and i have historically rented for three months out of the year when i go to en visit family in new york and i love it i love being able to call someone just say fix this please it it just it it brings so much joy that i don't have to like go and like find a vendor or like fix something myself and so it feels like there's a burden lift it off a little bit of my shoulders that's what it feels like just from looking at you i would have assumed you like to fix stuff i do like to fix stuff but only stuff that i like to fix so for example like i like to do legos that's fun for me i like to work on old motorcycles but i don't wanna have to fix like a an electrical thing in my home that it's reliant on like i don't have light tonight if i don't fix this okay now looking at me you also agree that i like to fix stuff too right lot of tools i lot of i grime under my fingernails right if i had to guess you never stepped foot in a home depot only the last time i went was when my dad made me go which i was probably like eleven years old yeah my goal my rich life is to never set foot in a home depot ever again ever so far i'm forty one years old i've done it i think i can keep it going okay and so that's great that you know what you want so when you're thinking of the buying versus renting thing is what percentage of your equation is on math and numbers and what percentage is on emotion and happiness great question in the beginning almost all on numbers so when i was renting in san francisco it was a steal basically the amount that i would have paid to own it was close to two times more for an equivalent place then i moved to new york and i had a place in new york a pretty nice place and i would always keep my eye on the real estate market just for kicks and i was tracking stuff and of course every year i would negotiate my rent and in a eleven year period my rent went down four times this is in manhattan so a lot of people think like rent only goes up no it doesn't depending on where you live even depending on the segment you're in rent can go down at that point in new york when i ran the numbers for an equivalent place that was just two buildings over same view same square footage same everything it would have cost two point two times more to own than to rent so let me break down the math because this is i was mathematically oriented let's pretend that i was paying five thousand a month okay if i was paying five thousand a month to rent than to own that place when i factor in taxes maintenance opportunity cost of the down payment transaction costs all of can wait let me ask you about those numbers so for opportunity cost do you assume seven and a half percent seven percent okay so you assume seven percent and then for maintenance what do you what do you assume two percent of the property value a year i in new york yes in other places i would go lower but new york is just inherently more expensive okay and then eight and then in some buildings or apartment versus other stuff you'd have hoa new york correct like thousands primarily houses yeah i vary i i have friends who have an h hoa that's five thousand a month very expensive yeah that's totally normal in a high end building in new york yeah completely normal alright so you have opportunity cost you have yep maintenance you have hoa what else do factor number that transaction costs when you buy and sell it's a massive what's it like four percent i forget the calculation i use back then but it's like hundreds of thousands of dollars for a unit of that's when you count both ends okay and then furniture this is something not to be missed you don't get the same furniture and a rental as you get in a place you bought for a lot of money you get nicer furniture to factor that in need to be honest also renovations people are not really renovating their rentals but they're renovating their other ones so i factored it all in okay and again you can play with the assumptions in new york i always prefer to estimate high what do you for the future growth do use three and a half percent in the world i used three i used three percent for rental growth and i used i think a three and a half or in the ballpark of that for owning again we need to factor an appreciation because there are a lot of buildings in the high cost of living cities they lose money every year but they make it on appreciation okay so i factored it all in i was like wait a second if i'm paying five grand over here sample number it would cost me eleven grand per month to own the same basic unit with the same view etcetera i go i'm good i'll take the six k per month i'll invest it and that's exactly what i did and i've been doing that for like close to twenty years so that turns into a lot of money over time and you get to live in amazing places now that's the math part but at a certain point when my wife and i decide to buy which one day we probably will do you have a time frame or like not a time no do do you think that maybe the next five years you might or is it just whenever you probably probably not in the next five but after yeah probably like after that that's my guess but when we go to make that decision my goal with anything really important in my life is that i don't want cost to be the number one consideration i don't want it to be number two or even number three i wanna have enough money that i can go and be like that's what i want it's totally irrational but it's exactly what i want and i don't really care what it costs is your mentality okay so money is number three or number four i think you said four or five on that list so in is your mentality going into buying a home do you think it's gonna be like i would like to not lose money on this or if possible i want this to be a store of value or something like that no i will lose a huge amount of money it will be the worst financial decision i ever make it will cost me millions it will cost us millions i know that it's okay well but you said that money you said money's is number four so if it's number four i don't want it to be number one number two number three it's gonna be like a distant number like me an example my wedding when my wife and i got married i'd been saving for like over a decade well before i knew her because i knew you know i'm india i wanna have an amazing wedding and i don't want cost to be relevant at all you should brought that up on your first date like hey yeah i've been saving for i'm wedding by the way that's not weird that's not weird at all that's what people often in the personal finance community watch you to do that they're like pull out your roth hurry show me your allocation i'm like can you guys go in a first aid for once in your life please like during dessert you're like what's your credit score and by the way can we go over our budget for our wedding so that that was an example where i knew that something inevitable was gonna happen one day i was gonna get married i wanted to be married one day and i was like this is gonna be awesome and i don't want cost to be relevant at all okay within reason but like i was happy to pay a lot same for a house it's a luxury purchase it's not an investment it's a horrible investment in a high cost of living area so i'm just approaching it as a pure luxury as if i was going and buying a beautiful sweater car or whatever i don't care i'm gonna lose money it's pure desire you said that you wanna be able to buy cash will you get a mortgage or does that depend on the rates maybe maybe so one i i've have ten money rules they're online and one of the rules is be able to pay in cash for any large purchases such as wedding honeymoon car house now people always like what the hell are you talking about pay for a house in cash and the origin of this is i had a mentor when i was an intern much younger and he told me he said ram we have a no debt policy in our house no debt i said wow in my head thinking must be nice the guy lived in a very elite bay area city as i got older and my business grew i started to realize that actually takes discipline to have a no debt policy in your house now we can qui about whether debt is good or bad and sometimes it's leveraged and whatever but just the idea that he had a philosophy a point of view on debt i really love that and so i one day when we buy a house i wanna make sure we have enough somewhere in our net worth that if we wanted to we would pay with cash will we do it if it's a one point five percent mortgage not we'll take that mortgage all day but i i'm not gonna buy a house that we don't already have the available cash for purely as a matter of discipline and i wanna ask you about like your future home like what what you wanna to what like what the attributes will be but when you are does does it factor in how often you're gonna move so for for my rules for buying home the one of the rules i have is i wanna live there for twenty five years dude you and i agree on so much basically all of our podcast podcasts are two bros agreeing with each like that's it it's i love it okay i totally agree when we go to buy a house the the general suggestion i give to people is you better plan to live there for at least ten years i i think the same way long term let me explain the math behind it because this is quite counterintuitive as well so you we've all heard the phrase you're throwing money away on rent i go how come we don't say the same thing when you go eat at sushi on saturdays you're throwing money away on sushi or how come you don't say you're paying your sushi owners mortgage how can we only use that real ridiculous sn for a landlord i don't care for landlord makes money as long as i'm making money everybody can make money it's great in the case of buying a house and staying there and then moving in a few years it's usually a really big financial mistake let me tell you why i i ran a quick calculation before we talk let's take the median in house it's like four hundred and seventeen thousand dollars let's even be conservative let's say you put twenty percent down which is pretty hard to do but let's just say you do do most people do twenty percent or less i think they do less especially now because it's so una unacceptable that's a median and price house that's really expensive let's say you have seven point one percent interest i calculated with really good credit but that's the interest rate right now seven point one percent science okay listen to this this is gonna blow your mind everybody you are paying more in interest than in principle for the first twenty years not one year not two years for twenty years only in year twenty one are you paying more towards the principal than you are in interest so in other words for all the people who leave me hundreds of comments every single day saying why are you throwing money away to rent so dumb so i just have one simple answer i don't like to throw money away on interest do you think that your opinion and this is more so because i know you get these comments all the time and i'm recently in this category and i'm reflecting on how i feel do you think that your opinion would change if you had two or three kids family definitely factors in for sure matter in fact i was gonna ask you how how does family factor into your decision but it's so interesting because you're choosing to rent right now i love that well it's gonna for me it's gonna factor in when she's of school age yep she's not i have a four month old and so that's why i said through the and so by the way the lease that i got i negotiated down a significant amount and i got them down behind signing a two year lease and paying six months up upfront are so good and so like i think we got a it's like a thirty percent discount that's amazing yeah it was a significant discount because we we did a two and then i called them and i go look like i'm the we are the perfect tenants because we are we have stable jobs we yeah like we don't party we i've got a newborn like you the we are the i'm the best possible tenant you could ever want but like at what point did you say by the way have you ever heard of my first meal never i actually don't like breaking him meta up okay i have to tell you something so my friends are always like after my netflix show came out they're like dude so like what's it like being famous like you get into any restaurant you want and i was like what like what are you talking about they're like don't you have like your agent's called like get you into what and i'm like is this what people do because if so i need to learn i need to learn how to name drop my first million no first of all i never named it and say well i'm not famous i i when people make fun of me like as my friends and they'll say i'm famous i'm like no i'm popular amongst a handful of nerds so anyway for me for factoring for with children i think that like when they're up school age and like school if we just decide to go to public school school district matters things like that and in which case buying will be a no brainer but my and i'll talk about this in a second but my whole thing with the hardest part about me deciding when to buy is is not the rules it's deciding what i want so the hardest part is like seeing like what features of a house do i actually care about and so what i love to do is when i i go and visit my family in different parts of the country all the time i purposely actually rent a variety of airbnb b's so like sometimes i'll splurge and i'll rent a ten thousand square foot place other times i'll rent a really small apartment other times i'll rent the place in the city sometimes in the suburb and so i get to live for two weeks or whatever just to see what is this lifestyle like and do i like it i'll give you an example i love it i used to wanna buy a browns stone in brooklyn i thought they looked so cool i rented one for a month and it was a lot of money and i splurge and what i found is they stink like the even the like for what my preferences in old or a a renovated browns zone is still an old building that things break all the time and like you hear the book and so like i got to i got to like test that out you know what i'm saying so i do that all of the time when you're when you're thinking about buying a place what attributes do you want it to have i have a very very specific and growing list because like i said it's a luxury so a luxury means you get exactly what you want it's not about price it's about getting exactly what you want how long your list it's pages as in page just bullet points yeah just bullet give me yeah so we rented an airbnb that's amazing right we can test it amazing amazing and honestly like a huge gift to be able to be like oh i can live in a different house that i would never have access to and living there even for a week you see things you didn't we rented an airbnb one time and the owner was a chef oh wow well it made a lot of sense because the kitchen was like extremely efficient like i found i i'm not in the kitchen a lot but i found myself just enjoying being there and it's because i later learned there's something called like the kitchen triangle or something and it's like a highly efficient way of setting your kitchen and then i connected the dots oh this is a chef so they knew what they were doing like two dishwasher things like that exactly like it's all within reach yeah so you're not wandering around so good i also you know i love hotels yeah right so every time i go to hotels which i consider the best hotels have the absolute best designers the best hospitality the best thinking about what's gonna make an amazing experience so i go for example the best bathroom in the world that i've ever encountered is that ama oman kyoto it's amazing so what makes it amazing okay first of all so they have a beautiful mirror the the lighting looks incredible the set up huge counter space beautiful he wood right behind you toilet in a separate room the total toilet alone i think is twenty thousand dollars it looks like a spaceship it's incredible our friend noah has one of those oh really that's cool i think i think so it's like a really expensive like smart toilet right oh wait yeah yeah hold on you should total has like twenty miles well i don't know which i i know that it was like north of ten thousand dollars and it has like a whoa and it has like a remote control noah okay that that's amazing i did not know that wouldn't it be funny if we got noah on right now we're like no join this link right now and then we're like no show us your toilet and he's like show you i'm sitting on it right now no it's a fancy and he he as a gift he bought neville one as well a really fancy toilet whatsoever neville hat and they have like remote schultz enough that like neville family member came and visited and they were really intimidated because they were like i don't know how to work this toilet it is a little nerve racking for sure so you want a fancy bathroom you want an efficient kitchen a couple other things bedrooms small it's great interested sitting in a huge bedroom i don't want a couch in the bedroom it's so irrelevant so dumb dumb small i want a place to put packages because we get a lot of packages and i don't like seeing cardboard everywhere in the south they call out a mud you want a mud i'm mud what's the con right i like that we want well i i my vision is multiple pavilion so three small houses like or structures one would be an office physically separate one would be a guest house physically separate and one is a house i don't like a house that's huge i don't like anything i don't like anything about three thousand square feet i find it quite cavern and so human sized my parents taught me this really interesting thing you know we grew up we didn't have a lot of money we have a pretty big family and i was asking my dad you know as i got older like how did you decide to buy a house had you calculate all this stuff he's like let me give you a piece of advice he goes don't get too big of a house i was like what how come you say that he goes if you have too big of a house kids will go into different areas and they won't congregate you want them to congregate because that's how you build a family i was like whoa dude i interviewed this guy on tuesday or wednesday or yesterday or something like that and he has a twenty five thousand square foot home he was tell me like i was like what's the expenses for that he was tell me all the all the answers and i was like how much time do you spend a week like managing vendors he goes like fifty yeah he's like fifteen or twenty hours a week i'm spending he he retired so he's like i kinda like doing it because i don't have anything to do okay okay and he's like at the time i was divorced and remarried a woman who had a bunch of kids and i a bunch of kids and it was cool to have and then they grew up and they had kids it's like this is our compound that everyone hangs out he goes but now i'm trying to downsize it's too much work i can't handle it yeah and he's like i'm i'm he's like i can't change the light bulbs like they're just like because they're too high and i'm not gonna get on a ladder he's like just way too much work and so because i was thinking about size i'm trying to decide how big i want i i think i actually want like fifty five hundred square feet fifty five hundred square feet yeah and the reason why i like that is because my in laws can come and stay there and basically live and have their own room and they could be with my family and it could be and it's and it doesn't feel like it's a burden that they're just living room with that and and they could work from the house and and by the way working from homes in ordeal now where like in plus i record for a living so i would need a dedicated room for that my wife needs would like a dedicated room and i want space for in laws and i have out of town family i want them to be able to make themselves at home and not feel like they're burden on me and so that's kinda how i decided on my square footage is about fifty five to six thousand okay i'll tell you what i i like that it all kinda makes sense you i need this i need that and then it expands i think that also brings me to the list that it's not just about the house so i went one level up because when when my wife and i moved to la one day i was like let's go let's go take a driving tour of the most expensive houses in the city so i found like all the expensive neighborhoods and then we just drove around ballet all these places most of them have huge gates but you can kinda see through and and you're talking like a hundred million dollar homes fifty to a hundred million yeah yeah exactly so i was like write down that address and we would look it up later and sometimes there's photos it's pretty cool just to see and as i was going through this i you know while you're driving there for a minute especially as an entrepreneur you're like i could live here ram sat bill air you know like you're like kind of falling into the vision and then i got home and i was like what the hell am i talking about like have a very small list of things that are absolutely important to me and guess what's number one on that list walk ability same walk ability so how am i gonna have bell air house where there's literally no sidewalks and then also reconcile that with walk ability and that's why i think it's so important for us as you as you get to know yourself to just create a simple list of values because otherwise even i will get in chanted by some cool thing i see back oh belly are so cool and then i buy this thing that aren't even want or it could be a car it could be a shirt it could be whatever so just having those values to remind you what is actually important the plates that i rented through the the second biggest reason why did it was it's across the street from a weekly farmers market i love that so simple and i just like i just wanna eat like fresh vegetables and fresh meat and that was like an ordeal was that it's just across the street from a a farmer's market i love that and does this when you're this methodical about buying a home are you this methodical about all the other things you like to purchase on a daily or weekly basis well i think you should be this methodical for the largest purchase of your life that's what blows my mind as people just literally buy a house and they spent more time researching their local steak house i'm like what what so no i'm not as methodical no i don't spend years deciding you know what brand of chips to buy but i do i do like a couple of rules that kinda make life simple like you i don't wanna have to be consumed with stuff i find that just like that older guy you mentioned we buy stuff with good intentions right like i worked hard the american dream i'm gonna buy a car house etcetera and then suddenly we blink our eyes and wake up one day and it's we spend fifty percent of our time fixing stuff and repairing stuff and thinking about stuff i don't want stuff i find that sometimes when people buy stuff their world shrinks it's like oh i gotta work on this the roof thing outside you could see how little i know about houses is that's the only example i'm like the roof and yet i wanna expand i wanna be like talking to friends traveling trying new foods doing my business i don't wanna be focused on a light bulb that's not of interest to me so tell me what your opinion on this is so i'm actually methodical about acquiring just things on a daily basis like what so like i don't have an amazon prime membership i just found myself buying like five dollar extension cords or like a usb thing that i don't that i don't need like because because a i i don't want like all the packaging coming to my home like it's i think it's ridiculous just that the sometimes i have to spend more money and it's not the money but it's just the energy of just like the actual energy in terms of what it's doing to the environment but also like my mental space of like i have to spend money to get someone to come over to get rid of all the boxes because it doesn't fit my trash can but b it take it takes so much clutter and so i've actually created a handful of rules when it comes to just buying things on a daily basis help me tell help me yeah so the first one is when possible i try to buy for life and so that could mean a fancy leather jacket so like let's say i wanna leather jacket i'll spend more money than then i then i'll buy the nicer thing in hopes that it can last for thirty or forty years and it and like it couldn't be classically like it's said a classic style or it could obtain that nicely things that can last for a long time i do that with cars as well i like to buy something that i think can last for a long time because i don't want it's it's a little bit of cost like just transaction cost but it's like financial cost but it's more so the mental cost of just like having too much stuff the other thing that i do is i actually think that recycling is nonsense i think that most of the recycling in america just gets thrown into the garbage and so i prefer to just reduce reuse so i just like the amount of energy that an amazon truck takes to get something to my house so that it got from china overseas with the see the huge ship and like all the energy that goes into that i find that to be just it hurts my heart of like how much waste it is just for me to buy this like silly usb thing that i could've have just gotten that target without all the packaging you know what i mean and so yeah i prefer just to reduce and reuse and then finally i try to be super intentional of like i bought a weighted vest the other day because i like to wear a weighted vest when i take the baby for a walk it's actually a fun way to like get a little exercise and so i try to be intentional of just being like alright which type do i want how much weight do i think i want for this weighted vest when in the past i've just like bought i've bought three of them and i'll be like i'll just see whatever is cool like they're only it's only twenty five dollars and so i just try to be a little bit more intentional about attention about what i'm going to acquire to make sure that that's the one i really really want because i don't want my home full of clutter because it makes my brain clutter yeah i totally agree well amazing i love those real i love how intentional you are that you just have them i have to say that i think we kinda grew up fairly similarly like soc economic like similarly my mother was a teacher and my father was a small business owner and he didn't yeah he did okay but what that was when i was in high school yeah okay so it's so interesting that often you know on my podcast i speak to these couples about money and sometimes there are trends that emerge from different types of couples so for example one insight that is quite obvious if you ever listen is parents who have credit card debt can never say no to their kids one hundred percent of the time they have an inability to say no to themselves inability to say no to their kids it's classic another one you'll find is that people who have credit card debt sometimes i'll be like hey pick up your computer and take me over to your closet and they'll show me their closet and wow is that intimate well you had a lady on your show that like was kinda i don't know if she was broke but she she was in a money crunch and she had tens or hundreds of thousands of dollars of like purses and things like that yeah but the but the interesting thing that she had a lot of money on the netflix show natalie but in in the couples that will often on sometimes i'll ask them him to show me their closet so they have financial problems they're overs spending and i taking the closet and they and i and usually they're kind of withholding they're not really opening up and so i say show me your closet they love it they open up because for many people their closet is their identity and i don't mind like i love my clothes and they start telling it and what you see in the closet is often chaos it's just tons and tons and tons of stuff and i'll say hey if you were given the option to buy one hundred fifty dollar shirt or ten fifteen dollar shirts what would you take okay before i tell you what they say sam what would you say less quantity any day of the week exactly and they never say that they say i want more it provides me memories it shows me that i can get it etcetera so what what i see is that class money soc economic status they all intersect and what you're talking about is so interesting because as you have made more money and you've kind of met people who have a lot of money you also realize that when you go into their houses there's a lot less stuff in there and it is really fascinating and extremely taboo to talk about in our culture about how what you see in someone's house actually tells you a lot about who they are their identity it is so revealed yeah and it creates huge amounts of headache is it this isn't just a financial thing this is a like i think that like usually the desk where i work i need it to be clean i think you said something you said something like you're like i love beauty and if i surround myself in my home or my office with beauty i feel inspired and i feel more productive i don't need beauty i'm not inspired by like particular paintings and things like that but i needed it to be clean i need it to be clutter free so the desktop on my computer it all is always empty and it's just white space and i like that you know there's this quote luxury is that which can be repaired and it strikes me when you talk about you know reduce and reuse same exact thing one one example i shared that people went be over they loved it was i have these shoes tennis shoes and the company that i bought them from they're expensive and they do free repairs so what's the name of the company that's pretty cool it's b k alley it's a high end italian brand and basically anything at at these like high end brands if it ever breaks or gets freight or anything you take it in they'll fix it for you no questions asked there's no cost but it's very expensive on the front how much our shoes there i i i i i know the brand but i've never looked at their shoes well i think those ten shoes are like seven hundred bucks it's a lot but yeah but you know it's not real this service they're doing it as a courtesy to me really they want you to bring in your eleven thousand dollar coat got it which you've had for twenty five years and they'll send it back to italy where only they know how to perfectly repair it and then they'll ship it back that's awesome which yeah it's amazing right so i posted this and i showed my shoes i wore some of these shoes on the show and i really like to you'll see me in sometimes the same outfits a lot because i wanna wear my stuff i buy it i spend on it and then i wanna wear it i don't wanna just throw it up so i took these shoes and i took them to the store and they were like yeah no problem and it took months so the other thing about buying nice stuff is that you're often not gonna get the speed that you would get if you ordered from amazon prime or something else like you go to h and m you're you're buying it right there on the spot you're tossing it etcetera but or another fast fashion brand i should say but for this it's like months away anyway people loved it they love the idea that oh my god free repairs free repairs where i get stuff repaired for free what they don't love as much is spending on quality in the first place mh right it's not about the free repairs like i can afford to get shoes repaired so can you but i think i like your mentality of like i'm gonna be selective about what i buy and not just by quantity but really think about what's meaningful to me i think that's really cool yeah it's i think it's exhausting i remember as we're preparing to move and i'm thinking like alright so we're gonna spend money to ship this and i'm like but i don't even want this like i even wanna it why why am i i don't even why do i wanna ship this thing that i don't even want like it's kind of ridiculous yeah it's i i like how you kinda stop it before you even get it in the door like you're like i'm not even getting get amazon prime also think that once you have it in the door if something's in your house you can also like i do a quarterly closet cleanse that's in park because my wife is a personal stylist so she's taught me how to always cleanse and it's just nice to get things out and it frees up mental space you know when you open your closet or when you open your office or even your kitchen every day i wanna feel good i wanna open the fridge and things are in order i don't wanna feel chaos like by seven thirty in the morning it's really challenging though by the way to throw away stuff it's like a it it i used to make i i read that i i would make fun of like the horror tv show i'm like are these people so ridiculous and then when you go through that process of actually cleansing out and and cleaning it it i don't know if it impacts you it impacts me i get emotional i'm like oh but i've owned this thing for fifteen years even though i've never used it it's actually it is it is hard and so i don't wanna get into that right yeah i agree i mean i i don't have an emotional thing but i do have a problem with piles like i get stuff and i just put in a pile and then i like never get to the pile sometimes for years and it's just like why am i doing this like that's the one thing i really need to improve on as it relates to cleanliness because i'm like these piles do not look good they don't feel good either so for the listener the takeaways and all this so we talked about running the math you get criticized online all the time and i think it's nonsense because all you're saying is run the math that's all you're saying and don't do and even if it is unprofitable do it anyway but don't kid yourself and say that it that it's a good investment yes you can total if you like i have a friend they lived they they moved to new jersey new jersey notoriously high taxes and they were like hey ram me we ran the numbers it makes no sense and we're buying anyway because of schooling and because of location to work i go fantastic i came round of applause good job it doesn't matter to me if you buy a rent it only matters that you're actually calculating everything math is one part of it you need to know your numbers but also there are other things family you know just pure desire anything you want you gotta calculate at all you cannot simply say like i want like it's hilarious to me that so many twenty four year olds on twitter are like my number one goal with money is financial freedom and then they spend six hundred and thirty percent of their net worth on a thirty year mortgage it literally makes no sense you need to be sure you're actually using your money to live your rich life and part of that is calculating carefully the biggest purchase you'll ever make and i i wanted to ask one last thing which is amongst your friend group is there a difference is there a pattern that you've known amongst people who earn a significant amount versus those who don't like i have a bunch of relatively high net worth friends who actually rent and yeah same have you seen a pattern in that it's the ones who are like especially savvy with personal finance like and it's it's like it's like me telling you sam i'm like hey sam if you eat a lot you're gonna get full and you're like yeah i know it's like yeah okay well you know it's so simple when you understand it and you're not being blinded by this idea that i need to buy a house and by the way this is like a lot of people in any expensive city by the way for everyone listening did you know that it is currently more expensive to buy than to rent in almost every city in america that not did not used to be the case but with interest rates as they are and with the rising asset prices it is crazy that people are still recycling the old you know phrases of like you're throwing money away and rent when right out in almost every city it does not make financial sense to buy alright man we're gonna wrap up there i appreciate you doing this this is awesome i'm if you're listening i want you to go to our youtube page type in you know if you're listening on podcasts like spotify or itunes go to our youtube page so you know type in my first million to find this episode i want you to put a comment if you agree or disagree with us no i'm very curious and by the way be nice be nice about it alright that was very nice if you to say thank you sam let me tell you something you can always recognize someone who has never been to a high cost of living city by the comments they leave i had a guy this just happened like two days ago he goes for me just such an idiot i i make more money owning it's so much better etcetera and so i you know i like to talk to people i like to ask questions he'd tell me more and i'd have this like very long conversation with him he bought a house for like seventy five thousand dollars okay he lives in a very inexpensive city so in a city like that it actually makes a lot of sense here's my here's my simple request for anyone leaving a comment before you leave a comment i want you to look up properties in palo alto or men park and i want you to look up those properties and i want you to find a couple properties that have rented and have sold and i want you to understand the math of a really expensive city like men park and powell you could do that with like chicago as well or atlanta like i bet you right now the numbers would actually still say tell you the same story you're totally right you're totally i just wanna show them like all the way in the most expensive cities in america because i want you to see that it is true in some cities it will never make financial sense even after thirty years to buy and then once you understand that you go wait a second so if that's true then what about chicago what about it later what about my own city let me take a fresh look at this and that's when you really start to master money when you take all the pre notions you have you go maybe that wasn't true let me analyze it for myself that's awesome i appreciate you yeah and that's a pod i feel like i can rule to where i know why i could be what i want to put at all in it like a days off on a goal less travel never looking back but