I went on a road trip through Southern NM a couple years ago. Highly recommend stopping at Gila National Forest - it's a certified "dark park", remote enough from sources of light to see the Milky Way with the naked eye.
One thing that struck me - towns down there had a template. 90% of towns we drove through were just a blood plasma "donation" center, a dollar store, a gas station, and a cemetery. Very bleak existence out there, oil and gas boom notwithstanding.
I did a Google search for "long-term returns from housing vs. other asset classes" (purposefully using exactly what you typed here to show how easy this is) and found a ton of references showing this is an overly-strong (and even somewhat "debated") claim but (as far as I am concerned) right enough for a discussion forum (and remember a lot of people aren't in a good mental position to own stocks but have to live somewhere anyway and so might as well own a house).
> This mix of comparable returns (Finding 1) with lower volatility (Finding 2) leads to one of the research's most puzzling, but fascinating, discoveries: over the very long run (circa the last century), housing earned a superior risk-adjusted return than equities. Sharpe ratios for the asset summarise this fact; note too that the pattern is consistent across countries.
My understanding is that it shakes out to a couple of things:
1) while not beating the S&P, historical returns on real estate are pretty good and less volatile
2) There are a number of significant tax advantages to home ownership
3) you can't live inside a stock. Building equity instead of paying rent is a good thing
4) you can rent it out, making it pay for itself while accruing value as long as you are willing to add your own labor
It's hard to put that all into a chart since (2) and (3), and (4) are personalized and partially mutually exclusive and the tax landscape is always changing.
> Building equity instead of paying rent is a good thing
That depends heavily on your goals. I hear this a lot, but it always reads to me like people think equity just magically happens when you buy a home (with a mortgage). No, you have to put money into it monthly, and a portion of that goes to pay of principal, which builds equity.
Whether or not putting that money into a large, fixed, illiquid asset (versus stocks/bonds) is a good idea... well, it depends. Personally, if I could get an interest-only mortgage with a reasonable interest rate (for my primary home), I would probably go for it. I personally don't care all that much about building equity, and I'd rather free up that cash for other investments.
Of course, many people would use the option of an interest-only mortgage in order to buy even more house than they can afford, instead of for the purposes of freeing up cash, and then end up in dire financial straits, as we saw in the 00s.
Also, re: paying rent vs. building equity: yes, I do have a larger space than when I was renting, but I am also paying more than my last rent, in property tax + mortgage interest + HOA dues. That's money that's just as equivalently "thrown away" as if I was just renting. I don't regret this decision, but let's not pretend that renting is throwing away money, and owning is perfect use of money.
Mortgage is the only type of leverage that an average Joe can get cheaply. Any attempt at getting a 'normal' loan will be met with insane interest rate.
That's the main reason why housing market is what it is.
What? You can get get cheapish credit for just about any asset as long is it secured by something whether that be a house, car, boat, rv... What do you consider a 'normal' loan? Unsecured ones?
> That depends heavily on your goals. I hear this a lot, but it always reads to me like people think equity just magically happens when you buy a home (with a mortgage). No, you have to put money into it monthly, and a portion of that goes to pay of principal, which builds equity.
I feel like you're missing that you have to put money into a place to live monthly anyway and in the past decade the equity is built up through home value appreciation. My area has been seeing 7-10% increases for quite some time. That equity increase far outstrips what principle I'm paying off.
Owner-occupied is kind of a special case, too, because you've got to live somewhere. You could be paying $X to rent, or $X+Y as a mortgage plus upkeep, so the additional "investment" you're making is just $Y. In some cases rents are so high that, especially if you stay in one place a long time, you're actually paying $X-Y to own, so there's a positive return every month in addition to the equity you're accruing. Yeah, this is a horribly broken system, but it does seem to be how things work.
There is a lot of research suggesting that housing is not the best investment compared to equities. Many people conflate leverage with real-estate investment. If you apply the same leverage to equities they will far and away outperform real-estate. Try S and P 500 calculator with dividend reinvestment to get an idea. In my opinion, if real-estate out-paces equities or other forms of investment, then we barrel towards a world where no one can afford to save for shelter any more which doesn't make sense, but that's just my opinion. Unfortunately, real-estate is still a profitable investment, and small piddly fed rate hikes won't change that any time soon.
> There is a lot of research suggesting that housing is not the best investment compared to equities.
And yet most retail investors loose money. My family managed to lose money both by investing in bonds and by investing in index fund - quite of an achievement. They never lost money in real estate.
The reason should be obvious -> most people understand what is a house and how it works, they understand the city they live in and good VS bad areas. Most people don't udnerstand the stock market.
Local to me, real estate investment really only works if you're a landlord and the rent is your income. Buying then selling or flipping homes has not historically been a profitable endeavor. If you timed things just right for COVID, maybe you made a good return, but otherwise in history prices have been rather stable and increasing only similar to inflation for decades.
Surely there are markets where flipping houses is extremely profitable, but it's not all markets.
While we're talking about funding basic research - how come these independent institutes and government funding agencies don't get equity (warrants, options, whatever) in the entities that ultimately commercialize and patent this research?
I reckon they probably take some cut as a licensing fee, but seems like participating in the upside would create significant incentives over the current regimes.
> how come these independent institutes and government funding agencies don't get equity (warrants, options, whatever) in the entities that ultimately commercialize and patent this research?
Because if it was trivially easy to provide such "equity", the research would've been funded by non-government, private sources already. The whole point of public research funding is to deal with fields and scenarios where this is not really feasible.
I don't know where you live but it's been decriminalized in plenty of places in the West, so even if it's not fully legalized the worst you face would be a nominal fine, not getting arrested.
Decriminalizing them is one thing, but what if I'm someone who doesn't make a habit of consuming random substances from strangers? I would rather them be well researched, responsibly sourced, and professionally prescribed.
AFAIK the only reason they are a controlled substance in the first place dates back to the War on "Drugs". "Drugs" of course being shorthand for anti-war protesters and blacks.
does it matter? been able to buy pot at a physical storefront in dt vancouver since around 2002 and currently for the last couple years can go to a website and have mushrooms shipped nextday to my door. if the police wanted to shut either down they would, but they don't.
Setting aside the environmental concerns (which are important, and indirectly health-adjacent), are there material health reasons to eat organic? This Mayo Clinic article [0] points to pretty minor improvements, would love if someone could point me to evidence substantiating OP's claim, or maybe which products in particular are materially healthier if produced organically.
You can accelerate 5-10 years to 3 months using pay for citizenship schemes. For example Grenada has one where you get citizenship and a passport in return for "donating" $150k USD to the government. Grenada's is interesting because you get visa-free access to China. Antigua and Barbuda are running a "50% off sale" (I kid you not..) where the cost is only $100k USD (normally $200k USD)
Lenders can and do buy this kind of data to underwrite their borrowers (credit cards, BNPL, student loans, mortgages, etc.). They don't need to get it from credit bureaus. Anyone who is underwriting off of bureau data alone is a decade (or more) behind state of the art at this point.
You've just made me realize network effects work both ways: If you can't receive any of your GMail friend's mail, you have a problem. If the last of your GMail friends can't receive any of their (in this example, Republican friend circle's) mail, they have a problem.
China isn't capitalist at all. Even things like buying land are typically timed leases owned by the government, and you see behavior like the Jack Ma incident where he made a perceived insult to the central bank and was "punished". Tied into labor programs and social credit, you see patterns that wouldn't ever fly in capitalism.
Communism doesn't mean everyone gets free groceries and doesn't have to work. The CCP, for all of their faults, seriously puts a lot of time and thought into the elements of communism and how the Chinese communism compares and evolves on it as a longterm form of government. Just because someone on the internet mistakes utopianism for communism doesn't mean Mao's party isn't communist.
It's quite Capitalist. Government ownership simply means that government is the capitalist instead of it being some private Billionaire, or a collection of investors in a joint-stock company.
Communism _does_ mean - among other things - that "everyone gets free groceries", in the sense that they would not exchange money or another commodity for the groceries, but rather get them through wider collective/communal/regional/country-wide arrangements.
I don't know why this is a popular misconception. You may have ration points or communism bucks instead of dollars, but you still need a hard currency to allow interpersonal trade. You may have resources that aren't obtainable through currency (housing), but you need currency because you need to settle preference/availability/tradeoffs. You probably also even still have some taxes for consumption.
The price of all goods is not equivalent on a fundamental labor level and the preference for goods is not flat.
One thing that struck me - towns down there had a template. 90% of towns we drove through were just a blood plasma "donation" center, a dollar store, a gas station, and a cemetery. Very bleak existence out there, oil and gas boom notwithstanding.