The 2 Biggest Financial Risks You Could Make in a Lifetime
Between owning a home and going to college you cost yourself between $1 and $5 million.
I used to have two homes. Before I lost all my money. People say owning a home is a great financial investment. It’s not. It’s financial suicide. For a lot of reasons:
1. YOU CAN’T GET YOUR MONEY BACK WHEN YOU NEED IT MOST
Most people want to sell when the market is crashing. But no one wants to buy. Because no one has cash. And then panic sets in. Because the bank owns your home. Not you.
People think they’ll sell their home and live off the cash later. But if that plan fails, then what?
2. YOU’RE FLUSHING YOUR MONEY DOWN THE TOILET
People renting = flushing money down the toilet.
No.
Owning = flushing money down the toilet.
Let’s compare.
Renters pay 3-4 figures a month. Plus a small security deposit in the beginning. Anything else is cash in the bank.
Buyers shell out 5 or 6 figures up front. It’s gone from your bank account. That’s the down payment. And then they still have to pay 4 figures a month.
Why do that when you can rent, and keep the down payment in the bank? Or do #3.
3. YOU CAN MAKE BETTER INVESTMENTS
Owning a home is a terrible investment. If that’s the #1 reason why you buy a house, please consider the alternatives.
I made a whole guide for this: “The Ultimate Cheat Sheet For Investing All Your Money”
You can invest in other financial opportunities. Or invest in yourself. Buy books. Develop new skills. Take an online course.
I used to do this podcast called “Ask Altucher.” People wrote to me. And I’d answer their questions on the air. Sometimes I’d hear back from people who tried my advice. This one guy heard my argument against college.
So this guy took my advice. Kept his money. And found an alternative. He got the equivalent of a four-year MIT computer science degree online. Because MIT offers courses online for free.
He did it within a year. And he didn’t get the official degree. But he got the skills. And that’s all that matters.
It’s a smarter risk.
He didn’t have to part with money. Which is scary. Naturally. Because we work hard to earn and survive.
This guy went around the fear. And spent time instead of money. And I bet risking the “traditional path” had a higher ROI.
I hope he reads this. So I can hear from him again. How’s it going?
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I know a lot of people will be skeptical. So I broke down all the math. It’s on the podcast.
And even though I’ve done the math on this hundreds of times, it still surprises me.
Also, I invite anyone who listens to this podcast to discuss these ideas with me and Steve (when he gets a Twitter. Steve, if you’re reading this… you know what to do).