Howdy,A few weeks ago, I read this blog post about a Canadian homeowner who couldn't wait not to be a homeowner. One of the things that stood out to me the most was the following insight he had about leverage and debt. "Why is it that when people borrow money to invest in the stock market (known as leverage) it’s considered inherently risky, but when people borrow 9x their down payment on a house, it’s considered 'common sense'?"I understand the logic of why we're conditioned to assume it's less risky to borrow money to buy a home versus using borrowed money to buy into the market. 'Common sense' tells us we can build equity as we pay off our mortgage, and we can use our home as a place to live! But beyond common sense, the historical data tells a different story.There has only been a short period, between 1990 and 2006, where housing returns rival stock market returns. In all other periods, housing prices have only increased slightly more than inflation.I'm not making a case for borrowing money to buy a home versus buying into the market. I am making the case that we must often confront and examine our assumptions when making financial decisions. When we think about how we think, we give ourselves a chance to spot our cognitive biases.What are some of the ways you're thinking about how you think about money? Let me know, hit reply, and share.
Your finance friend,
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1. 🤓 What's the Difference between ETFs and Index Funds? (HYG Original) 🤓 2. 🛍 Are Buy Now Pay Later Retail Loans A Rip Off? (The Markup)
3. 🍹 Margaritaville and the Myth of American Leisure (Eater) Times Square Margaritaville Resort Is an Unlikely Balm for a Restless Mind
4. 👵🏾 How to Enjoy Retirement Without Going Broke (New York Times) The problem of decumulation is a tricky one, even for Nobel Prize-winning economists
5. 🎟 A British Couple Is Selling Their Luxe Tuscan Home for the Price of a $35 Raffle Ticket (Architectural Digest)
4. 🤓 A Bookkeeping Thing: (HYG Original) Why Outsourcing Your Bookkeeping Will Save You Money 🤓
7. 🤦🏻♀️ How dollar stores scammed America to become worth more than Coca-Cola. Surprise—the too-good-to-be-true store is exactly that (AV Club) "But here’s where it gets particularly gross: dollar stores are targeting demographics who either aren’t educated enough to spot the scam or who don’t make enough to have much choice in where and when they buy their household necessities."
8. 💊 The Red-Pilling of Kitson, the Celebrity Go-To of the Aughts (The Cut) “Ross [is] working the same setup as Kitson 1.0, adapted to the current appetites of the attention economy. ‘Literally no one cares about celebrities anymore.’ […] Former celebrity photographers who used to get thousands per snap who are now driving for Uber Eats. One works in the Border Patrol. Instead, […] political stories are what go viral, especially in the pandemic."
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