Renting might feel flexible but it can quietly cost you decades... David Bach explains why renting through your twenties and thirties can leave people reaching forty with little to no net worth. He argues that comparing stock market returns to home ownership is not a fair comparison because buying a home typically involves leverage. With a down payment, homeowners benefit from the full value of the property as it grows, along with potential tax advantages and long term equity. He also challenges the idea that renters consistently invest the money they did not use for a down payment, saying that in reality many spend more on lifestyle instead. Do you think renting really gives people more financial freedom long term? #podcast #renting #realestate #investing #money

If you don't get in the game of homeownership and you rent in your 20s and you rent in your 30s, you're going to turn around in your 40s and having not built any net worth. Am I not better off renting and investing in the stock market versus buying a house? Well, I want to bless this myth because what happens is people come on the go. The stock market over the last 20 years is average over 10% annually. People go that returns are better in the stock market than the real estate. Yeah, but that's not apples to apple comparison. Why? When you buy a piece of real estate, when you buy a home, people don't typically pay cash for their first house. They put down 20% and they borrow the other 80%. Take a $200,000 home. You put 40 grand in. $200,000 home goes to $400,000 in 10 years. This has happened to so many people in the last five years. So they've made $200,000 in profit. They didn't put in $200,000. They put in 40. So they got a five times return on their down payment. They go to sell their house. They don't pay taxes on the game because when you own a home, at least in the United States, you own a home for over two years. If you're single, you get $250,000 in tax free gains. If you're married, you get over half a million dollars in tax free gains. You get tax deductions on the mortgages. So what happens is people come here and they go, "You know what? You shouldn't be tied down. You need to be flexible when you're young. You don't want to have the responsibility. And you should take the extra money and you should put it in a mutual fund." And you know what happens in the real world, Steven? People don't do that. They rent an apartment that's nicer than what they can afford. And they spend all their money. And then they turn around and they're mid-30s. And they have no equity because they haven't bought anything. And they also haven't saved money. It is an absolute fricking myth that people take this extra money that they could have used to buy a house and they're going to put it in the stock market. They don't do that. Certain influencers that are out there promoting the idea that renting is better than buying a home. And when you look into why do these people promote it, either it's a stick because it gets them clicks on the thumbnail, be they're selling something else. They're trying to get you to invest in their real estate. They're selling you in a coaching program. They're selling you, you know, to come to their live event. But I'm telling you, when you look at average Americans, average, I'm talking about ordinary Americans. When you look at where their wealth is, it's in home equity and it's in the stock market.