[acslater00]

Article is half correct. It’s true that major consumption purchases (nice house, nice car) are better thought of as liabilities not assets. But the investment story here suffers from what I’ve heard someone call the “my portfolio is 3 car washes in downtown Omaha” problem.

Long story short: this is actually not the best way to accumulate investment returns. The numbers in the post are not just realistic. Small $ private equity investments (that’s what this is) often lose money when costs are properly accounted for, especially if you include the value of time. And if you pay someone to manage the asset (rental property manager for example) it eats your return.

My dad once came into possession of a coin operated laundromat. It was exciting for a while. I’d go with him down to the laundromat and we’d pick up the quarters and do inventory. We bought a coin counter on eBay to make it go faster. Eventually we did the math and realized the business barely broke even, and was occupying 20% of his professional attention. He shut it down after 3 months and sold off the equipment.

Anyway you can make these kinds of businesses work but it’s a grind, not a free lunch. You’re better off with ETFs or a good dividend stock.

[mattm]

When I was young my parents bought real estate to rent out for cash flow. One pair of renters just left without notice and did a lot of damage on the way out. They sold the property shortly after that.

[helen___keller]

> Anyway you can make these kinds of businesses work but it’s a grind, not a free lunch. You’re better off with ETFs or a good dividend stock.

Not to say I disagree, but one wonders if there's broader macroeconomic implications when it's widely accepted that the best use of capital is to buy ETFs and stocks, or maybe real estate.

I say widely accepted because, as an upper middle class professional, it seems to be common sense retirement planning revolves around dumping a large amount of money into the S&P500, maybe with a side of small-time rental management.