[pjc50]

> needs the discipline to not succumb to spending it on a car/house/divorce

Apart from the 2008 boom/crash, owning a house has been a great way for the middle class to become asset millionaires. I knew someone in London who was routinely out-earned by the asset appreciation on their own house.

Besides, inflation has rather moved the bar for "millionaire" to every middle class couple with a house and two retirement funds..

[leetcrew]

> Apart from the 2008 boom/crash, owning a house has been a great way for the middle class to become asset millionaires. I knew someone in London who was routinely out-earned by the asset appreciation on their own house.

there are certainly some hot real estate markets where houses appreciate a huge amount over a short period of time. in hindsight, it looks like a no-brainer to purchase a house in these areas. on the flip side, maybe someone builds a huge apartment complex on your street right before you wanted to sell and the value plummets. if you look at the whole american housing market though, there is a ton of variance but in the long term it seems to barely outpace inflation. [0] once you factor in maintenance and property tax, it doesn't really look like a good investment vehicle. imo, buying a house is best looked at as an alternative way to pay for housing which may or may not be superior to renting.

> Besides, inflation has rather moved the bar for "millionaire" to every middle class couple with a house and two retirement funds..

for sure, a million dollars just isn't that much anymore. if you follow the 4% rule, it gives you about $40k to spend every year. which is basically what it costs me to live in a studio in a relatively nice part of town as a single twenty-something.

[0] https://static01.nyt.com/images/2006/08/26/weekinreview/27le...

[qes]

I'm not in a particularly hot real estate market - decidedly average.

It was abundantly clear when we bought that our location would not have a large apartment building built next to it - you can at least to some degree select for factors like that.

With all costs considered, we lived in a 2000 sq ft home with attached 2+ car, large shed, biggest yard on the block, etc. for a little bit less than it would've cost us to stay in our previous small 2 bedroom apartment in a equivalent enough location, assuming even that the rent remained the same for the past 10 years.

And on top of it we're walking away with $100,000 in equity. That is accounted for in the costs - but I'm not so sure that I would've actually saved that $100k if it hadn't been getting stuck away in the property value all along.

Anecdotal, of course, but it seemed like a no brainer at the time and in fact turned out to be such. It's not for no reason that home ownership is widely recommended as a good financial move.

[WalterBright]

> inflation

Indeed. Hoarding cash is for fools. I'm always bemused by the claims that wealthy people hoard cash.

[Cthulhu_]

But they do; sure, they spend heaps on shit like houses and cars and parties and vacations or whatever other hobbies they have, but most of their money is in their companies, stocks, stock options, tax havens, etc. At some point they reach a critical mass where no matter how much they splurge, they will never see their wealth decline. At best the companies / stocks they own will lose some value, but they will NEVER feel that in their wallet.

And some will set up a charity, but people like Bill Gates have never spent a significant portion of their wealth on that. Again though, that may be a logistical problem - they can't spend money fast enough whilst not splurging it.

Of course, the solution is simple; have the companies pay their staff better. Or give the staff stocks themselves, to be force-bought by the employer when they leave / get fired, and have it pay out dividends monthly to stipend their base income. This gives the employees representation in the board of directors as well, which is much needed in the modern capitalist system.

[NovemberWhiskey]

>but most of their money is in their companies, stocks, stock options, tax havens, etc.

That is not "hoarding cash" - keeping your net worth under the mattress or in a savings account is hoarding cash. Perhaps, at the margin, a money market account.

[newen]

But when people colloquially say that wealth people are hoarding cash, they mean what the comment you're replying to is saying and not the keeping cash under the mattress thing. More commonly, people say hoarding wealth.

[Swannie]

"Hoarding cash" means exactly what it sounds like - people being overly attached to cash in the safe/under the mattress/in "high interest" savings accounts.

This has been its use for a long time in any publication talking about money.

I know when you say "hoard wealth" you really mean not spend their wealth, because I'm not really sure how you "hoard wealth", as being wealthy basically means you've got stores of valuable assets... or a hoard if you will.

The two phrases are definitely not used interchangeably.

[WalterBright]

> Apart from the 2008 boom/crash

Only if you decided to sell then. If you did nothing, you'd have been fine.