Wayne,
Even when you buy a home it is an asset, as you can sell it someday. If you sell the house down the line you pocket the difference in price and get to live for free in the house as well (I am assuming appreciation in house prices in an inflationary environment, otherwise the whole discussion is pointless as there is no inflation to start with anyway). But, you cannot sell your rental agreement. The rents gone forever.
Cars are assets too, but depreciating ones (whereas, ceteris paribus, houses are appreciating assets) hence the comparison is not exactly valid. In a inflationary economy, you may buy a house and flip it 2 years down the line and make money, but mostly like such a technique will result in a loss in the case of a car (w/o adjusting for inflation in either case). Hence, depreciating assets are more like cost - the ultimate depreciating asset is of course food.
Also, rent increases may not track house prices exactly, just as dividends do not track equity price appreciations exactly.
Taxation and public services are completely outside the realm of CPI, hence no comments.
I live in a small town called Brookline right next to the city of Boston. I think that when I die, I will be in ultimate doo doo, even more than when the mythical BK comes. But I do not lose even a single heart beat worrying about it, or about BK for that matter. I do exercise a lot, eat healthy, read as much as I can, stay debt free, never gamble and overall try to become as productive member of the economy (both from an investment and work POV) as possible.
-BGR. |
