📈It's Always Greener
📈It's Always Greener
As news of higher interest rates roils markets, it’s tempting to look backward, fondly remembering the times of yore when things were simple and a new home cost $2,000.
Yes, your $2,000 home you built yourself.
Ian’s here to remind us that the grass isn’t always greener and that, all things considered, we have it pretty good in the year of our lord 2022. Read on for why.
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As some of you may know, I recently switched to an iPhone 14 Pro (nbd) after a decade of using Androids. Before everyone starts making fun of me, I would like to say I have owned an iPhone in the past, specifically, the 3GS while most of you peasants were probably using Blackberries or Razrs (RIP). And thanks to buying Apple stock in 2010 my portfolio still looks good despite my worst efforts to ruin it over the last couple years.
I switched not because I thought the iPhone was superior or the new model was that exciting. The reason I switched was that most of you reading this blog bullied me into getting an iPhone so our text messages can be blue and not green (It was actually Kara’s fault but she doesn’t read this). Yes, as far as I can tell that is the only real benefit of owning an Apple.
*Names and terrible avatars blurred out for my friends’ protection*
But this along with a recent rewatch of Mad Men got me thinking about how often in life we like to think that somehow things were better in the past. There are infinite memes on the internet about how our generation cannot afford the luxuries that our parents could at a certain age.
While these are comical they overstate the issues here.
Yes, housing is currently outrageously expensive.
Yes, interest rates right now are the highest many of us have seen in our entire lives.
BUT this is an oversimplification of how things are going. First of all, let's look at interest rates.
If your parents were born in the 1960s, that means they likely paid more than 10% for a 30 year mortgage on their “cheap” house way. People are losing their minds now because mortgage rates have “exploded” over 6%.
And for all those old Sears ads floating around the internet where you could pay pennies way back in the day to own a house that you assembled yourself. When we talk about it today we leave out just how shit these houses were.
I mean sure it looks great, a house for less than $2k, sign me up. But let's not forget this was over 100 years ago when the average yearly salary was less than $1k/year. And this is also leaving out the fact that back then there was no cell phone, no wifi, no TV, or any other electronics.
And buddy, I’m not done. There likely wasn’t an oven range, a refrigerator, dishwasher, washer dryer or even a fucking garage for your model T which definitely didn’t have bluetooth or a navi system.
Never mind central air… 33% of homes didn’t have INSULATION? I’m surprised “roof” wasn’t a line item on here.
So while homes are more expensive now, if you look at the difference in price, size, and amenities you will see that things really haven't changed as much as the media or internet will tell you.
TLDR: Your parents’ (or grandparent’s house) was a 1,110 sq ft shanty with ZERO amenities, if you want one of those I’m going to guess they are still cheap.
Which brings me back to Mad Men, and my green bubbles.
They casually mention this penthouse on Park Ave in Manhattan in 1970 is on the market for $85,000. Chump change today considering there are articles estimating this would be worth anywhere from $2-5 million.
SEE THIS IS WHY YOU BUY NOT RENT!
In fact investing this money would have netted you way more. And that is accounting for inflation, while not counting for all the expenses you would accrue owning this apartment in Manhattan.
For those shouting, “You couldn’t invest the whole $85k!”
Fine here is a 20% downpayment during the same time period.
What’s the Upside?
We always hear about the grass being greener in life, or investment opportunities missed. For some reason, this happens in Real Estate far more than in any other arena.
However, these claims are largely way overblown. While it seems like the steal of a century to buy a Sears home in 1920 or a Mad Men-style penthouse in 1970 the fact is neither of these was actually the greatest investment of all time.
So while housing is expensive today, and rates are high, just know this is not new, nor is it going to ruin your financial future. If you wanna buy, buy. If not, investing in the stock market has proven time and again to keep up with housing.
The grass isn’t always greener or in the case of my iPhone bluer.
For Your Weekend
Read:
🚨Politics alert! Proceed with caution.🚨
Both Left and Right Are Converging on Authoritarianism by Stephanie Slade (Reason Magazine)
Referring this article by Stephanie Slade after listening to her interview with Charlie Sykes on his podcast. Warning: priors may be challenged! Here’s an excerpt:
The future of the parties is now a matter of live debate. But in both cases, the elements that seem to have the most energy behind them have something important in common: a desire to move their side, and the country as a whole, in an illiberal direction.
On the left, a new crop of socialists hope to overthrow the liberal economic order, while the rise of intersectional identity politics has supplanted longstanding commitments to civil liberties. On the right, support for free markets and free trade are more and more often derided as relics of a bygone century, while quasi-theocratic ideas are gathering support.
Watch:
The Crown (Netflix)
There’s Good Netflix and there’s Bad Netflix. The Crown could be considered Netflix at its best. The show dramatizes the story of Queen Elizabeth II and the political and personal events that shaped her reign.
Chuckle:
