Buy Your Freedom; Rent the Rest


How did you get JL Collins to post on your blog, like did you relentless email him or something?


Nope, he contacted us and told us he liked our blog. You can imagine our surprise. It was a little bit like Michael Jordan coming over and saying “Hey, you’re pretty good!”


Yep. Somehow I stumbled on her video manifesto and was captivated. Great content captures my attention.

This exchange appears in the comment section of this post on Millennial Revolution.

Even though I am one of those Baby Boomers she calls to account in the video above (refresh your screen if you don’t see it right away), I was laughing and saying: “Yes! This is someone who gets it!” I even posted it on Facebook and I almost never post on Facebook.

A wonderful manifesto for questioning everything and rethinking what works and what is possible. And work it does.

FireCracker and her partner Wanderer are already retired in their early 30s and are, well, wandering about the globe while engaged in non-profit work, novel writing and, of course, their blog. This ain’t our grandparents’ retirement.

From the video I began a bit of binge reading around their site and, still more impressed, reached out to them as described in the exchange above. We hung out on Skype (they were in Korea at the time), I wound up with a couple of new friends and, more to today’s point, a cool guest post that tips you off to their secret.

Here you go…

Buy Your Freedom; Rent the Rest

by FIRECracker

Beware the White Van

What’s the most dangerous thing on the road?

A drag racer?

A hummvee?

An 18-wheel tractor-trailer?

Nope, nope and nope. The real answer?

A white van.

Let me explain. You see, before we became financially independent and retired early to travel the world, we lived in a tiny, remote Canadian town called…”Toronto”.

And even though our car-owning co-workers, who spent freely and lavishly, told us “oh you can’t possibly NOT have a car in Toronto”, (and feel free to replace “Toronto” with most any major North American city) we knew better. In fact, we knew we could ride the subways and buses, walk to many of our favorite places for a tiny fraction of what it cost our friends to own a car.

So instead of owning, we joined a car-sharing service called Enterprise CarShare, which lets you sign out cars hourly. The car lot was conveniently located only a 5 minute walk from where we lived.

And that decision would prove it’s worth on a deceivingly beautiful day in April.

We were heading back to our rented flat (sensing a pattern here? ) after picking up our groceries. But just as we were about to turn into our driveway, a white van swerved and smashed into us.

It happened so fast I didn’t have time to blink.

Thankfully, no one was hurt, and when the cops arrived, they even joked “hey, at least the beer is okay!” gesturing to the 24s in our trunk.

Surveying the damage, the police quickly pieced together what had happened. The car that hit us was a delivery van, driven by a 60-year-old Greek dude, who got impatient, crossed over the median and tried to pass us on the WRONG SIDE OF THE ROAD.

Legal scholars may recognize this as a classic case of “Say whaaaaaat?”

But somehow, once the insurance companies got involved, the accident got ruled 50% our fault. Jackasses.

But because the car was a rental, the insurance that came with our car-share membership covered everything, and we didn’t even need to wait for the car to be fixed. We were up and running with a new car the very next day.

Had we owned, we would’ve had to pay $10,000 to get it fixed. The insurance would’ve covered it but our premiums would’ve gone up (especially since the accident was 50% at-fault)

By using a group-insurance plan through the car-share, our insurance stayed at a ridiculously affordable $45/year. And by using car sharing, we only paid a $125 one-time sign-up fee and $10.25/hour for the rental car. Since we used the car only a couple of times a month (2 hours every 2 weeks for groceries), that adds up to a minuscule $551/year (or $46/month) over 9 years. No extra cost for gas or maintenance, and no need to worry about depreciation. We can get a brand spanking new car every time, with no added stress or cost.

So the accident taught us three things that day:

  1. Don’t own a car
  2. Use car-sharing instead
  3. Never trust a white van

Now whenever we see a white van, Wanderer glares at it suspiciously while humming the theme from Jaws, and I immediately dive into the nearest bush.

What we’ve learned about car-sharing applies to housing as well.  Because we rented and invested instead of owning a place in Toronto, we came out WAY ahead with a 7-figure portfolio and the option to retire early and travel the world. Had we bought an expensive house, most of our hard-earned cash would’ve been eaten away by housing costs.

And this is why we’re committed renters. Both with housing and cars. Renting lets you get ahead, because you don’t need to take the financial risk to maintain a physical asset. You are also less stressed and you have more flexibility because your costs are always predictable. No surprise roof repairs, no hurricanes threatening to destroy your life savings, no accidents totaling your car and skyrocketing your insurance premiums.

Stress free and predictable. That’s the key to freedom.

Now I can hear a lot of keys clamoring and angry people fighting to justify their own situation, saying that renting isn’t always better.

And you know what? I get it. If you live in a city with crappy public transportation, it’s a lot more challenging to get around without a car.

And in some cities with reasonable housing prices (aka NOT Toronto or Vancouver), it can be cheaper to own than rent.

But if you live in a city with a half-decent public transit system, ditch the car and use car-sharing instead. You will save a ton of money, decrease your stress, AND be super fit if you switch it up with walking/biking.

Similarly, if you live in a city with affordable housing (meaning the monthly rent is 1% or more of the cost of the house), buying might not be a horrible idea.

The problem is, most of the time people buy blindly under the wrong assumption of “renting is throwing your money away” and therefore “owning always beats renting.” Not true. And in fact, that belief is why most people can’t seem to get ahead.

The costs of owning are WAY higher than people think, and the worst part of these expenses are they are often unexpected. A car will slide into a snow-bank or a roof will spring a leak seemingly out of the blue and then BAM, you are out thousands and thousands of dollars. In fact, we keep hearing from our readers wondering why they keep getting hit with financial emergencies seemingly every month.

This is why.

When you rent and something breaks, it’s someone else’s problem to fix. But when you own, it’s yours. And so it becomes really easy for a string of “stuff going wrong” to bleed away your money until you wake up 10 years later and wonder why you haven’t gotten any further ahead.

Instead, rent. You will have a lot less stress, a lot more money, and WAY more freedom.

Oh and also…watch out for white vans.


There you go. If you are as captivated by their story and their voice as I, or just curious, here’s some more to check out:

On the housing issue, here are a couple of mine:

Here’s the Mad Fientist’s podcast interview with them that came out of the comments below:


My Recent Guest Posts on…

Millennial Revolution:

An Interview with the Godfather…of FI

Physician on FIRE:

Christopher Guest Post – JL Collins 


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Important Resources

  • Talent Stacker is a resource that I learned about through my work with Jonathan and Brad at ChooseFI, and first heard about Salesforce as a career option in an episode where they featured Bradley Rice on the Podcast. In that episode, Bradley shared how he reached FI quickly thanks to his huge paychecks and discipline in keeping his expenses low. Jonathan teamed up with Bradley to build Talent Stacker, and they have helped more than 1,000 students from all walks of life complete the program and land jobs like clockwork, earning double or even triple their old salaries using a Salesforce certification to break into a no-code tech career.
  • Credit Cards are like chain saws. Incredibly useful. Incredibly dangerous. Resolve to pay in full each month and never carry a balance. Do that and they can be great tools. Here are some of the very best for travel hacking, cash back and small business rewards.
  • Empower is a free tool to manage and evaluate your investments. With great visuals you can track your net worth, asset allocation, and portfolio performance, including costs. At a glance you'll see what's working and what you might want to change. Here's my full review.
  • Betterment is my recommendation for hands-off investors who prefer a DIFM (Do It For Me) approach. It is also a great tool for reaching short-term savings goals. Here is my Betterment Review
  • NewRetirement offers cool tools to help guide you in answering the question: Do I have enough money to retire? And getting started is free. Sign up and you will be offered two paths into their retirement planner. I was also on their podcast and you can check that out here:Video version, Podcast version.
  • Tuft & Needle (T&N) helps me sleep at night. They are a very cool company with a great product. Here’s my review of what we are currently sleeping on: Our Walnut Frame and Mint Mattress.


  1. Physician On FIRE says

    An early happy birthday, JLC! Only the best people were born in November. I saw a headline about the astrological signs changing, so I’m not sure if we’re still Scorpios. Whatever…

    Never trust a white van, indeed! Unless it says “free candy” on the side. Only good people give out free candy; it’s like a mobile year-round trick or treating opportunity!

    In a couple years, we could be selling a home and our vehicles before heading to someplace exciting (possibly New Zealand). When I look at our budget over the last year, the savings will be tremendous.


    • FIRECracker says

      “Only the best people were born in November.” So true 😉
      And yes, white vans are jerks!!!

      Once you sell the home and vehicles, the freedom you get from not owning will be incredible! Kudos for you guys for being smart enough to realize it.

    • jlcollinsnh says

      Never trust a white van ESPECIALLY if it says “free candy” on the side. 😉

      Yep, Scorpios are the coolest in the Zodiac:

      “Scorpio is the most sensual sign of the zodiac. Scorpios are extremely passionate and intimacy is very important to them.”

      “Sex with Scorpio is a total emotional and physical experience with passion and intensity. They have amazing stamina and can last all night long, round after round. Scorpio is the zodiac sign that is the most likely to act out a sexual fantasy. Do not suggest a fantasy to a Scorpio unless you plan to do it!”

      “Scorpio is the symbol of sex and Scorpios are passionate lovers, the most sensually energetic of all the signs.”

      Er…Hottest. I meant Scorpios are the hottest in the Zodiac. 😉

    • sdfsdf says

      Exactly my thoughts. And if your place of employment is big enough you just blend in with all thee other cars and move it here and there. Use a bicycle to go shower at the rec center and bring groceries, lunchroom fridge and microwave and real easy to be independent. Hey I even did the church janitor thing for a while, where everything I needed could store in a locking filing cabinet. Shower at the floor drain in the furnace room taking the key in with me. Groceries a 5 min walk away, work was a 10min bike ride away. The savings racked up and I was living on less than $5,000 /year which included vacations with airfare. Now I’m building a house with cash.

  2. steve says

    I DO applaud mr and mrs rentors for their blog above. They are at least honest and state that RENTING makes sense in some places with SOME lifestyles, but certainly not ALL. I have been a real estate owner for over twenty years. I have earned my living with real estate. I have friends who have amassed huge incomes and fortunes much larger than The Rentor’s above…they also have something else: assets and incomes that will keep pace with inflation and maybe BEAT inflation. They have something solid and finite..a piece of tera firma..something NO One can take away without THEIR neglect…whilst Mr/Mrs Rentor have market accounts where a man named Mr Market, can remove from you both your capital and your income very regularly and with matter that you did not neglect your duties to manage it. My friend with many units of two families in a nice new england college town has over $120,000 in actual income per year..his job is to keep them rented and up to date. He doesn’t WANT to travel, he likes his town, he likes the people he grew up with who still live here and have kids in college now…he is involved in his towns politics to make things better, he enjoys going out for a breakfast with an old buddy or for a beer to watch the Pats game with other old friends. He LIKES community. Mr/Mrs. Rentor don’t have that. They have Skype. They don’t have kids in schools who walk together to those schools with kids of his friends. Heck, they can’t even enjoy a nice drive in an old classic car up to the foliage or the mountains or to the same beach that they spent summers for years with mom and dad and grandma. I am merely pointing out that their lifestyle is not envied by a large segment of the population. And when they start having kids…having a nice two family near the schools or college will be much more valuable than the dollars they saved renting dozens of other peoples homes. Everybody is different. Me, I have a 60’s convertible…i have traveled..been to St Petersburg Russia in summer…but the ONE thing I could NOT wait to do when i returned: take a nice drive in MY car, down streets I knew as a kid to Cape Cod and up to the Kancamangus Highway of NH….

    • Kyle says

      *I too am a home owner. You have to understand that 1) Real estate generally only goes up with inflation and no more, unless you gamble that an area will become more valuable in the future and it actually does(how is that different than gambling in the market?). It could also lose value if the area becomes more crime riddled. 2) Real estate prices generally goes down along with the stock market so your not really saving your butt in the event of a market crash. You may have a physical thing, but when we’re talking overall finances – who cares. Is it better to have an item worth $100k or a piece of paper worth $100k? 3) If you’re talking about real estate as far as buying and flipping houses or buying and renting properties to others, well that’s really in the realm of starting a business. Most people will not go into real estate to run a business. They buy a home to start a family. 4) For people that just buy homes to raise a family in – even when their home’s value happens to out paces inflation over the years, it’s incredibly rare for them to out pace the stock market. Don’t forget that selling real estate is also an expensive and time exhaustive endeavor and often wipes out any profit the market changes may have given.

      If your feeling is that you like owning a home, well that’s fine, but you need to acknowledge that it’s really a preference you have that’s going to generally cost more. A luxury item, if you will, that you want. In most cases telling yourself it’s financially smart compared to renting, is a flat out lie. I am a home owner and I like my luxury, but I’ve learned through the power of math a couple years ago that it wasn’t the financially smart thing to do. Even if I stay in my home forever.

      • FIRECracker says

        Wow, very refreshing to hear this point of view from a home-owner! Kudos to you for understanding the math (most home owners I know, don’t. They are too attached to home ownership as their identity).

        People have to understand that owning is a lifestyle choice, NOT an investment (investments PAY you to own them, not the other way around). Thanks for setting the record straight!

    • FIRECracker says

      Agree. If you like your situation and you’re not drowning in debt to pay off a mortgage, then good for you! Not everyone has to have the same lifestyle, priorities, etc. In my case, my city was so unaffordable that my co-workers were all working themselves to death in stressful jobs, just to pay off the massive mortgage. You have to ask yourself, what is the point of life? All they do is work and pay off the mortgage. They never even get to see their kids or spouse! I’m glad I didn’t fall into that trap. Life is SO much better now that I’m out of the rat race. I have zero regrets. Life is good 🙂

      But sounds like your life is good too and you’re happy so no worries!

    • Felipe says

      It’s nice to hear your acknowledgement that it’s a lifestyle choice that some people want. I agree.

      Though owning a piece of paper that allows you ownership of companies is like owning a piece of paper that allows you to own a home. It’s not just a paper but a legal right to something tangible. With stocks- you own a portion of the equipment, buildings, brands, teams, and profits companies produce. Its value goes up far faster than real estate over most periods of time due to the incentives of the business to produce profit for the share holders.

      Also, not accounting for an invasion which would render your house deed obsolete without any negligence, there is also eminent domain, where the government can take your home for what they want to pay for it and use it for whatever projects they desire.

      Additionally, houses come with a wealth tax (property tax) and their income isn’t as tax advantaged as dividend income. There’s some very real advantages to owning businesses which don’t require my input or additional money to bring more wealth.

      Though I am happy you’ve gotten so much value and joy out of your home, those emotional rewards like a loving community are often invaluable.

  3. LD says

    Thank you for your great blog. Wishing you a happy birthday on November 1st “St. James”. Meant to comment on your last post that you really need to cease channeling Holly Golightly and name that damn cat! Ha-ha
    Enjoy the weekend… it’s lovely here in New England, isn’t it?

    • jlcollinsnh says

      Thanks LD…

      My being born on All Saints Day likely has those same saints holding their heads and mumbling, “Oh, the irony!”

      As for our cats we named “cat” (although in our defiense we used other languages) they have long since gone to their final reward where they surely have been able to chose their own names. 🙂

      Right you are!

      New England this week has been lovely and the fall colors drop dead gorgeous. Fortunately we had cause to drive up to Vermont and over to Maine and it was spectacular this year.

      • Jian says

        Ah fall colors! I was debating about taking a trip to New England to see them or finishing my bike ride of the Pacific Coast Highway this year, and the bike ride won :-).

        Traveling on a bicycle and carrying everything one needs for daily living really, I mean really, makes one think long and hard about what is essential in life. Turns out, not a whole lot!

  4. Financial Panther says

    Love this Firecracker! Ms. FP still has her trusty Prius, but I’ve never owned a car before. Instead, I take the bus, train, or bike everywhere. If I really need a car, I’ll hop in a Car2Go. It works wonders for those times when I really need to use a car to get around.

    And I own a decent road bike, but usually don’t even use that as well. Instead, I use our city’s bikeshare system and get around town on that. If your city has a bikeshare system, you should definitely sign up for it. I pay $75 per year and can ride around all over the place. Great for those “last mile” legs between the bus and where you’re trying to go.

    • FIRECracker says

      Great minds think alike! After biking in Amsterdam, I could see why the city is full of fit people. Biking does WONDERs for your health. That’s another thing about not owning a car. Not only do you save money, you also save the environment and your health. I easily lost 5 lbs, just biking for that 1 week I was in Amsterdam. Loved it!

  5. Steven says

    So is the general premise that if you rent rather than own, this will equal freedom? or would it better to say that renting all larger purchase items (car, house) will reduce expenses in the time needed to have a large savings rate for FI?

    Would you say that owning a large purchase item (car, house) should only be done after reaching FI or would you say never? or would it be better to say that owning these should be completed when you have a clear advantage financially to make this purchase. Such examples could include owning a car that is 10% of your gross income, owning a home and renting a floor/room of your home, a clear 10 year or greater path to FI.

    These are for Jim or Firecracker, thanks. “Can you rent your way to FI or should you buy?”

    • FIRECracker says

      Renting definitely helps you reach FI faster. It’s much easier to plan your finances when you know exactly what your fixed costs are. You don’t need to worry about large costs that come out of nowhere (like when you have to fix your car or home), which will set you back years in savings.

      I don’t get why you would want to own once you became FI though? The lack of stress you get from NOT owning doesn’t change, so the goal is NOT to hold off owning, become FI, and then start owning. The goal is to be free from the stresses of ownership and having to pay large sums of money out of the blue when the roof leaks, or when your car breaks down.

      So to answer your question, the freedom comes from NOT having to deal with unpredictable large costs that come with ownership. In order to pay for those costs, you have to trade off free time to work. As well, fixing those things take up your time too. Our most precious resource is time, not money. So at any point, if you have to trade off time doing things you love for time doing thing you hate, you are losing freedom.

      • Steven says

        Renting is a fixed cost, most likely that will go up with inflation over each year. The likelihood of your rent staying the same is unlikely, making an argument against myself my taxes/insurances will most likely match your rent increase in the short term as well. I do think that over time owning a home wins out vs short term renting . Eventually your home becomes paid off, your rental does not.

        I don’t get why you would want to own once you became FI though? I don’t think you would reach FI and buy a home, but financially speaking you would certainly be in the best financial place possible to make that decision. Where as when you started FI, let’s say 7-10 years, your financial state would not be as strong as the future.

        We own a home. We have chosen to live in the home and rent other portions to pay for the mortgage. This essentially allows us to live without an expense for housing. My personal views are that this is the fastest way to FI since if you eliminate/lower your expenses the larger your savings rate will be.

        I think it’s important to have another voice. I know many prefer to rent for some of the reasons you mentioned. Others are home owners and I don’t believe that one individual has an advantage over the other, at least not great enough for renting to be the FI solution.

        Jim. I think the point you make that matters most in any FI conversation is the savings rate, rent vs own vs live with your parents, it all comes down to a simple principle.

        Thanks for answering guys, hope it sparked some conversation;)

    • jlcollinsnh says

      The path to FI is paved with an aggressive savings rate and investing. It is choosing to spend your money buying freedom.

      Personally, I’ve both rented and owned houses at times while I was growing my stash. When I owned it was a lifestyle indulgence I could easily afford.

      As for cars, I’ve owned beaters and have bought new depending on my financial circumstances. Spent years being carless, too.

      I never let my savings rate drop below 50%.
      I’ve never bought anything I couldn’t afford on 50% of my income I was living on at the time.

      Now being FI, I never spend more than the 4% rule suggests my investments can sustain.

  6. Done by Forty says

    Renting is always simpler, and often cheaper. Kudos for espousing the benefits of renting.

    I’m a huge (annoying) advocate for simply doing the math on rent vs. buy, and letting the numbers do the talking, rather than giving blanket advice for one or the other.

    But I realize a lot of people will never do the math. Since that’s the case, we probably need more voices for the rent position, and we certainly have a couple of good ones here.

    • FIRECracker says

      Doing the math is definitely the way to go. Unfortunately, I’m realizing more and more that people either don’t know HOW to do the math, or don’t WANT to do the math. And even if they do the math, it’s funny math that comes out of a bank calculator which doesn’t account for ownership costs (yes, you should definitely trust the banks *eye roll*), or they get duped by fine print and never realize how much of a hole they are digging themselves into.

      For the people who don’t fall for these traps and can do the math, they will win whether they rent or own, but they are the exceptions rather than the rule.

      • Lynne says

        I did the math pretty thoroughly and accounted for all sorts of costs and risks (including stuff like the opportunity cost of not putting my down payment into the stock market), and I bought an inexpensive-by-city-standards condo in a small town within walking distance to work a few years ago. It should have been superior to renting if home values stayed steady, or no worse than renting if they declined mildly. I was perfectly well aware I couldn’t count on those scenarios, but even in the case of a significant decline, I thought I’d *probably* live here long enough for it to be a wash (versus renting) – I ran those numbers too. And doing this let me sell my car, woohoo! I do adore walking to work, too.

        (I would have just rented close to work, but, sigh, small town with a very limited rental market – I watched it for a long time, and there was never anything available in that area that would have let me keep my cats. Those are two expensive cats! I don’t regret adopting them though. Cheaper than kids at least. 😉 )

        So, years later, turns out I’m planning to move to a city for a different job, and I’m going to sell this place, because I don’t want to rent it out; if I did, I’d lose money on it every month. And…local values have dropped by close to 20%. I’m going to lose something like $20-30K on this place, or a third of my liquid net worth. Ouch. (And yeah, I could stay here and *not* sell – it’s my choice to leave – but I’m not about to treat this condo as a ball and chain on my career! I’ll take the loss and move on with my life.)

        I knew the risks and walked into this with my eyes wide open, and I won’t say I should have done something else because it honestly seemed like a pretty good decision at the time, based on the numbers and what I thought my future plans would be. But I’m so not going to do this again. 🙂

        • FIRECracker says

          “I’m not about to treat this condo as a ball and chain on my career! I’ll take the loss and move on with my life.”

          Good for you! Most people can’t rip the bandit off and end up hurting themselves in their career and finances as a result. For you, it’ll be painful temporarily, but with an awesome new career, you should make it back in no time!

          Thanks so much for sharing your story. It really shows that with housing, you can never tell which way the market will go…even if you do the math.

          • Lynne says

            I’m all for ripping bandaids off! What I wouldn’t be able to stand is the ongoing financial bleeding that would result from holding onto this place, even if it wasn’t a big money drain. It would sit there in my spreadsheet and reproach me every month. Shudder. 😛

            Anyway, really, it’s not going to have THAT much effect on my FIRE date, so whatever. 🙂 I’m grateful that I *can* just write a cheque for the remaining mortgage balance and walk away. On a macro level, I get to skate away from the odd mistake like this thanks to making mostly good choices. I was pretty sensible when I bought – this place was only 2x my salary then (1.8x my current salary; I’ve gotten promoted since). It had limited downside, which is why I was comfortable taking the risk.

            What scares me is the fixer upper house my sister and her fiancé bought in Greater Vancouver around the same time, which was at least 6x their combined salary…they tell me it’s increased in value by $100K since then, and are of the opinion that the Vancouver market can only keep going up. They have a pretty shaky relationship too; they’ve been together almost a decade, but he is a douchebag – he’s gotten a lot worse/more controlling since their engagement. I can only hope they split up and sell the house while they can still make a profit on it, or break even. (Failing that, I just hope they DO split up and she doesn’t pour more years of her life into that relationship. I mean, at least he doesn’t hit her. But. Sigh.)

            So, you know. It could be so much worse. This condo thing will be nothing more than a temporary blip on my net worth graph. Shrug. 🙂

        • jlcollinsnh says

          Thanks for sharing your cautionary tale, Lynne.

          Houses command an outsized chuck of capital to own and that exacerbates the potential risks when things go south.

          If we were to buy again it would be for reasons similar to yours: Choosing to live in an area lacking suitable rental options or where the rent vs. buy analysis favors buying.

          But in both cases, we would also be factoring in the additional risk inherent in owning.

  7. Sasha says

    Another valid point on the benefit’s of renting. Almost everyone I know who has substantial liquid wealth ( none of this home equity b.s) rents. And although they do still own a vehicle, the vehicles are certainly not new and bought with cash.

    • FIRECracker says

      Yup. That’s what we noticed too. If housing makes you rich, then why aren’t all home owners rich? Is it because most of their money is tied up in the home, and they can’t get it out until they sell? At which point they hand a huge chunk of their profits to real-estate agents, lawyers, the bank?
      Is it because they have to spend a ton of money paying for maintenance, property taxes, insurance every year, and none of it adds a penny to their home equity?


  8. ChooseBetterLife says

    Didn’t you watch Twister? The white vans are supposed to be the good guys and the black vans are the bad guys!
    Sorry for the hassle of that experience, though I’m glad it turned out okay.
    We own both our home and our car, though if Phoenix had better public transportation we’d gladly ditch our cars. I think/hope that self-driving cars will be a total game changer and that sharing will become more common in the next few years.
    We have no regrets about our house either, though maintance has become our hobby. We didn’t expect it to be so much work, and we’re lucky that we enjoy it.

    • FIRECracker says

      That’s great that you enjoy house maintenance! As I said, freedom is spending time doing what you love, and hey, if home maintenance is what you love, then a house makes total sense for you.

      Someone needs to tell the director of Twister that he got it all WRONG! White vans are the devil! 😉

  9. Skip says

    Great post.

    You are correct when you state most people don’t want to do the math. In my experience, most people feel that renting is throwing money away, while owning a home is an investment. What they fail to consider is the true cost of home ownership: mortgage+ maintenance+ property tax+ home owners insurance+ PMI, etc. As mentioned previously, unless you are lucky enough to live in an area with a massive boom, you almost never come out ahead. Let’s not forget what I think is one of the biggest scams of all time, the mortgage amortization schedule.

    I should disclose that I am a home owner. However, we live in a very modest townhouse and mortgage free. I’m somewhere between Jim’s and Firecracker’s age. If I had to do it over again, I would have rented in order to amass my wealth are a younger age.

    • FIRECracker says

      “…feel that renting is throwing money away, while owning a home is an investment.”

      And there’s that key word: FEEL. Too many people rely on FEELINGS instead of cold hard math when it comes to home ownership. They get tied up in becoming a home owner, and keeping up with their friends, who are doing the exact same things. And that’s the biggest danger of all. Making decisions based on FEELINGS and FOMO (fear of missing out) instead of mathematical analysis.

      Congrats on being mortgage free! You are way better off than most people I know. Those poor saps are drowning in debt and working stressful jobs to pay off said debt for the next 20-30 years. Scary stuff.

  10. Rich on Money says

    Awesome post ! Jim! Thanks so much for bringing this amazing blog to our attention!! I’ve been binge reading it. She has a lot to say about people who think they are making money in real estate (Which I think I’m doing!?). It’s caused me to take another hard look at my numbers and make sure i’m not forgetting something!

    She really gets it. (Money) I’m a new huge fan!!!

    • FIRECracker says

      Thanks, Rich on Money! Appreciate the kind words and really happy that you’re going to do the math. SO many people turn housing into an emotional subject, when it really should be about the math. Good for you being objective about it!

    • jlcollinsnh says

      Yeah, I figured the readers around here would find her provocative and compelling.

      Every now and again I’m right! 😉

  11. Vicki@MakeSmarterDecisions says

    Since I own a number of rental properties, I love how you explain the benefits of renting so well 🙂 We own now and we’re planning on downsizing into a rental I bought 23 years ago. Your post is making me think again though too – (an analysis we’ll really have to do much more deeply in a month or so). We could sell our house and rent or we could sell both our house and that rental property and just rent for a few years while the kids are in/finish up college. Our house (and the rental) will need a lot of maintenance over the next 5 years and the kids don’t use the in-ground pool and the 23 acre public park in the backyard anymore. I’m FI now and semi-retired at 49 – but we have lots of money tied up in our house and in the rental house. Renting would be so much easier! Oh yea…and we own a white (mini) van! Off to catch up on your blog Firecracker and Happy (early) Birthday Jim! Those nice fall days have vanished here in the NE this weekend!

    • FIRECracker says

      Congrats on becoming FI and semi-retiring, Vicki! It does seem like renting would be a good idea if your kids don’t use the pool or park anymore. And especially if it will need maintenance over the next 5 years. Let it be someone else’s problem 🙂 You are free now…FREEEEEE!!!

  12. Mad Fientist says

    Great post and couldn’t agree more!

    Renting allows you to get exactly what you want, when you want it, and then you can give it back when you want something else.

    We wanted to live in the center of Edinburgh so we rented a furnished place in the very center of town (somewhere that would have been way too expensive to buy).

    We then decided to travel for three months so we just left that apartment there and now we’re spending much less money renting in Mexico (any time homeowners travel, they have to pay for two places at the same time, since they still own their house back home).

    Here in Mexico, we decided we wanted to get some sun and relax for a week so we rented a place with a pool. Then our friend said he was coming to visit so we moved to a 2-bedroom place for the three days he was here then moved back to the pool place afterwards.

    No need to spend a bunch of money buying a 2-bedroom place in the center of Edinburgh with a pool just because we think we may want all those things at some point. Instead, just rent and change it up (and enjoy everything more because you don’t get used to things and therefore, don’t get tired of them).

    Same thing goes for stuff. We rented some horses yesterday to explore the Mexican countryside but then this morning, we were relaxing at a nice cafe enjoying some coffee and croissants while someone else was shoveling horse shit 🙂

    P.S. FIRECracker, I’d love to get you guys on my podcast to chat about all this good stuff so let me know if you’d be interested!

    • jlcollinsnh says

      Hey MF…

      Very cool approach!

      I’d love to hear more about how you (and for that matter, you FIRECracker) go about finding the places you rent.

      Can’t wait to hear that podcast. Just send an intro email to you both.

    • FIRECracker says

      Holy shit, it’s the Mad Fientist! GAHHH! I’m a HUGE fan of your blog 🙂 (Geez Jim, your blog is clearly is where all the cool FI kids hang out :P. Oh God, I just said “Cool FI kids” didn’t I?)

      Sounds like you’re having a great time in Mexico! I remember LOVING Edinburgh but hating the weather…so Mexico seems like a nice sunny escape from the cold, rainy weather. Looks like you guys are living it up and enjoying your retirement. Sweet!

      And we would love to be on your podcast! I’m sending
      you an email right now…

    • Mad Fientist says

      Jim, for short-term rentals I mainly find places on airbnb, vrbo, and tripadvisor. Sometimes I do hotwire/priceline but I haven’t on this trip.

      Haha, thanks FIRECracker!

      Yes, Mexico has been amazing and Edinburgh weather is definitely awful (although, it’s better than Glasgow weather at least)!

      So glad you guys are up for being on my podcast so replying to your email now 🙂

  13. Casey King says

    Nice article. Again we are contrarian. We just spent a long Airstream weekend in the Texas Hill country and visited the LBJ Ranch where LBJ loved to be. He spend 25% of his presidency there. It was home. For us there are two places we love to be: Austin, TX and Breckenridge, CO. We have our main place in downtown Austin and we have a slightly bigger than tiny house cabin in the mountains. For the wandering we use the Airstream. I can certainly see the merit you describe, but in our vision of FI that we worked to it always included these 3 places: Austin, Breck & anywhere. Home is where the heart is and home for us is a combo deal. I’ve never thought about real estate as a money investment. We don’t need to have every dollar working as efficiently as possible and hard to put a price on place(s) that provides inspiration. There are dollars that we want to work as effectively as possible … they’re just in a different category from home. Love your perspective on things and spent the better part of a couple hours binging on your site!

    • FIRECracker says

      Hello, fellow contrarian! You are one of the few home-owners who understand that real estate is more of a lifestyle purchase than an investment. Good for you! If you enjoy your homes and are not trading up time doing something you hate for it, then all the more power to you 🙂 Sounds like you have an awesome, happy life and I’m happy for you.

  14. Student Loan Planner says

    We drive a $2000 Honda civic w 180000 miles on it bc my girlfriend has to drive quite a bit. I walk to work. The danger in st Louis is the cars with no windshields. Usually they don’t have very much insurance lol

  15. CF says

    Long time homeowner, but totally agree with the math in the article. First home (townhouse) did very well, but that was from 1997-2003 and while I’d love to take credit for it, it was dumb luck. Our current home probably hasn’t kept pace with inflation, add in NY State taxes (yes, there are people from the great ripoff state that read these blogs…) and maintenance, and it’s a losing proposition money-wise. Why do we stay? We’ve established roots, our extended family is very close, our kids are in a school system they love etc. I’m sure we could have found a rental in town, but I accept (although not easily) that this isn’t the best money/freedom decision. I will say that we could have afforded a much more expensive house when we bought it and could have upgraded significantly over the years, but stayed put in a simple but more than adequate home. We’ve aggressively saved the differences in real assets (Vanguard funds).

    Could we move to another state for a (much) cheaper cost of living? Of course, but for now, this is what’s best for us. In 5 years, when the kids are out of the school system, we plan to bounce around and explore.

    We do own cars as well, but always do the math. Generally buy older cars that are known for reliability and have low mileage for their age. We did buy a new minivan (2003), but at that time, used ones were selling for only a few thousand less than new, so it made sense. Drove it for 13 years and 185,000 miles before transmission blew up (would’ve kept it going if we could).

    Had I known this info when we bought, would I have changed course? Not sure, but it’s helpful to at least make the purchase decision knowing that if you do, it should NOT be for financial reasons.

    Bottom line, the post is right on, so do the math and make your decision knowing and accepting the facts.

    • jlcollinsnh says

      “…so do the math and make your decision knowing and accepting the facts.”

      This, exactly.

      Doing the math doesn’t mean you have to chose the less expensive option. It means you understand what the less expensive option is and how much more the more expensive option is.

      From there, you can make a rational choice based on your wants, needs and resources.

      Well played!

  16. SamK says

    Firecracker seems to be everywhere lately 🙂 Their blog always gives some good food for thought.
    Rent vs. Buy seems to be a difficult prediction. You have to predict what your investment returns will look like and home price growth. Makes we wonder if i’m underestimating one infavor of the other. I tend to select 4-5% for investments (take out the inflation) and max 2% for a house–I know, Los Angeles “may” have higher home growth rate, but i prefer the cautious Schiller avg of 1.7%, but is this an underestimate (who really knows). We won’t move until after the kids graduate high school (16 more years), and i predict homes growth rate averages out to the lower rate over time. When we add in the 25% tax bracket we are in, it tends to be in favor owning a $600k home if we spend more than about $2300-2400 for rent-which can be easy to do in LA.
    Currently, our rent is hella cheap so we are staying put, but we get the itch to buy since we share the lot with another home that gets rented out frequently. I have a stronger desire to be FI vs own a home. It would be nice if we made enough to do both at the same time, but we don’t. That’s where Firecracker and Jim have been helpful in keeping us on the FI path. I’ll keep praying we don’t fall off the bandwagon in the next 6yrs we have left, sooo close.

    What are your thoughts on the #’s i enter into the calculator? too high, too low?

    • FIRECracker says

      Stay strong! And yes, always do the math. Math beats feelings, every single time.

      As for your numbers, I like to use 6% for investments (that’s pretty conservative, considering it’s been 9-11% over the last 30 years) and 2% for home appreciation. Some areas have higher home appreciation, but that’s the exception rather than the norm.

      Does you calculation for the $600k home versus the $2300-2400 rent include maintenance costs, property taxes, insurance, and closing costs when you sell? These all have to be taken into account, and more often than not, eager home buyers conveniently ignore them (it also doesn’t help that the bank mortgage calculators don’t include them).

      • SamK says

        “Stay strong” thanks! I appreciate the feedback. The 2 calculators I used do include all the extra components to buying–tax, maintanence, closing cost, etc. We even added in the cost
        a gardener ????

        Zillow seems to project conservative future growth for homes in even the nicer LA areas like -0.5 or 1.3%. Some Seattle areas have 7%. That’s a huge difference.

        Thanks again for your thoughts

      • SamK says

        Thank Jim! This one was bookmarked a long time ago. I read it often, and send to friends that are asking me for advice on buying a home–few/none actually take the advice written. I go back and forth on buying a house, and the only reason for the “forth” is after reading your blog and having read some of Firecracker’s articles in the past. It’s very easy to get sucked in when everyone around you is buying you a house.

        PS Happy Birthday 🙂 Hope you have a great birthday month!

  17. AM says

    My wife and I are debt free including mortgage with no kids. Early in our careers we bought into the baby boomers “you need to buy a house” idea. We are both boglehead index fund investors that max all of our retirement accounts and brokerage. Our dog is old and in bad health and we have decided when he passes we’re going to sell the home and rent. The home is due for a new roof, windows, kitchen floor and counter tops. Over the years I had to fix the sump pump, replace some electrical, roof shingles, fix toilets etc… Honestly houses are a money pit. Oh and I have property taxes due in a few months.

    • FIRECracker says

      “houses are a money pit”

      This is something I keep telling my friends but they never listen to me. It’s only AFTER they’ve bought the house that they realize what the real cost of home-ownership is. But by then, they’re already trapped.

      Thanks for sharing your experience. I’m so impressed with all the objective home-owners on this site! Home-ownership is generally a very touchy subject and tied to the person’s identity, so I didn’t expect to see so many level-headed people. I’m impressed with all the self-awareness!

      • AM says

        I forgot to add since we bought the house new we had to pay a lot of money to install the lawn and the landscaping. Had we not bought into the baby boomer ideal we would have a larger nest egg for sure. The good news is we’re young enough to right the ship. Thank you for bringing awareness to as many people as you can.

    • jlcollinsnh says

      This is a great illustration of the fallacy that once the mortgage is paid off owning a house is free.

      Mortgage payments are only one of the monthly costs of ownership. And even once that mortgage is paid off, you have the opportunity cost of all that capital tied up in an unproductive asset.

      On behalf of us Baby Boomers, I apologize.

      But really, what the hell were you thinking listening to us??? 🙂 😉

  18. Throw Away Millenial says

    First, I have to say, I could not agree more with the concepts you present here. So many people chain themselves to a lifestyle they can’t afford. I think many could learn from this. I’d like to address something else here that for some reason has not come up in these comments, and it’s about the way you deliver this message in the youtube clip at the top of this post.

    I find it interesting that a completely narcissistic, entitled video is being used as evidence that millennials aren’t narcissistic and entitled. It’s not Us vs. Them. It’s not about who’s right and who is wrong. You’re missing the whole point. This is why the Boomers make these comments about us. The Boomers point is about respect and providing for the next generation. Their collective focus was equipping the next generation with the tools to lead a fulfilling life. Our focus seems to be equipping ourselves with the tools to lead our own lives better. Your point that times are changing is spot on, but it’s the way you deliver the message that defines the reason Grandpa wants you off his lawn. You’ve lost the understanding that they didn’t work 30 years at the same place and buy a house for themselves, they did it for you! I wish my fellow Millennials could understand and embrace this concept. It seems like everyone I’m surrounded by thinks that they are #1, but in my mind, my parents are #1. They sacrificed for me and that’s the lesson I want to pass on. If you don’t agree with that, it’s okay. Each of us must live by our own set of values, but your anger towards Boomers is misplaced (as theirs often is towards us). Videos like this are exactly why we get these labels. Instead of going off about how much better you are and your life is for living YOUR way, how about thanking those that came before you for all they did to put you in a position to get this far? Again, I think your financial advice is valuable, and the change you can make by educating people about other ways to live life serves a great purpose that is lacking for many in our generation AND in those that came before us, but as my father used to say, “teach, don’t preach.” You could have made all the exact same points you made in your video without villainizing any group or generation.

    • Paul says

      I was a bit put off by the video as well. I’m not sure the anger toward an entire generation is justified. Like all generations, the boomers made great contributions and made some mistakes too. Criticizing an entire generation in such broad generalizations shows a lack of maturity and a lack of perspective. Likewise, the anecdotal stories of various people victimized by advice they received from the “boomers” rang hollow. Lots of baby boomers had curves thrown at them in life too; but it is rare to hear a boomer place the blame on their parents or the previous generation. $100,000 in school loan debt for a PhD in Psychology? That sounds like a bad life choice by the person who borrowed the money, not the fault of the previous generation. Lots of folks from all generations have been laid off from jobs. That experience is certainly not unique to millennials.

      Since I was born in mid 1960s I’m not a boomer nor a millennial. Guess I’m from “Generation X”. Not sure if that makes me a victim or a villain…. I like the general financial advice in the video and on Firecracker’s website, but stop the whining and stop over generalizing about an entire generation.

      • FIRECracker says

        Meh. No matter what you do, someone will always be offended. Boomers have been generalizing Millennials for years. It’s so easy for them to dish it out, but so hard to take any criticism. If you’re offended by the video, don’t watch it.

        • Paul says

          No, not offended; just don’t think the tone is justified. Plus, no matter who does the stereotyping, it is still not right. My experiences with young folks these days is generally very positive. Contrary to the stereotype, I find most millenials to be earnest, hard working, creative, and original thinkers. I think it is great some millenials are choosing a different path than the previous generation. Keep up the good work.

      • jlcollinsnh says

        As A Baby Boomer myself, I guess I am in the group that should be insulted. And I suspect many BBs would be.

        But I’m with Mae West when she says…
        “Those who are easily shocked should be shocked more often.”

        One of the things that makes FIRECracker’s blog and voice compelling is the strong dash of attitude. But then I like Tabasco on my food, too. 😉

        Clearly, I like the video. I put it up.

        But rather than be offended, I am able to smile and see the truth in what she has to say.

        Us Baby Boomers did figure out, for the most part, how to make our lives work in the world we were born into. The mistake we then all too often made, was to assume this same approach would work for our children in the all too different world into which they were born.

        Too often we lacked the humility to understand what we might not know about what they faced and the confidence in them to figure it out for themselves. As we did.

        This is not unique to the Baby Boom generation. It was true of our parents and, when their time comes, it will very likely be true for the Millennials. Then one of their kids, whatever that generation is called, will be pushing back. As they should.

        In fact, I see strong parallels between us Boomers in our youth and the Millennials today.

        We were extraordinarily harsh critics of our parents, and in many cases we were right. The Vietnam War and racial and gender civil rights come to mind.

        Our parents saw us as pampered, privileged and way too full of ourselves. In many cases they were right, too.

        But they were wrong in their insistence that we follow their path and in their worry that we’d never find our own.

        Millennials face a different world and I’ve been very impressed with those I’ve met and how they are facing it.

        I’ve also watched far too many of their parents give them wonderful advice, for 1972, and then be shocked, offended and dismayed when they pushed back.

        My daughter would very likely be able to point to times I’ve done it myself. 🙂

        So when FIRECracker posts a video with a strong flavor that is somewhat at my generation’s expense, its truth brings a smile to my face and I settle into listening to an excellent message for today’s generation facing today’s unique challenges.

        • Paul says

          Very wise words, Mr. Collins. I was a harsh critic of my parents when I was young. Over the years, my perspective softened a bit. With the benefit of hindsight I now see how they were struggling to make their way in the world just as I am now. I now also see with much greater clarity the sacrifices my parents made so that I might have a slightly easier time of it. And, from my perspective much of the advice they gave me, which I often ignored, was spot on correct. But, my parents were from the “Greatest Generation” and both were products of the Depression; neither were technically “Boomers”!

          Based on my observations, most young people today seem better equipped to figure out what is good advice, and what is not. They just seem, in many ways, smarter than we were at the same age. Spicy attitude notwithstanding, Ms. Shen proves the point.

  19. JP says

    As a 20-something taking this general approach while working a job that pays well but isn’t a perfect fit, I think my motivation comes from seeing the freedom ‘trust funders’ have to choose work they find more fun or more ethically conscious. I think another way of framing FIRE/FU money is as giving yourself a trust fund. If it doesn’t have to be a huge trust for you to feel comfortable, it only takes a handful of years. I appreciate the effort you, FIREcracker, MMM, etc are doing. Looking forward to joining you all! Thanks!

  20. dandarc says

    Another classic, and another blog to read in its entirety.

    Getting the lesson in “Owning a home is expensive” this year – 60 year old sewer pipe replaced, and for good measure our HVAC crapped out too. I do think owning works out long-term in this particular area, but the short-term can really suck.

    • FIRECracker says

      It also helps if you enjoy and are good at fixing stuff around the home. I’m hopelessly unhandy and I hate it. So another reason why home ownership is a terrible fit for me.

      Hope the sewer pipe and HVAC doesn’t cost too much to fix!

  21. Mustard Seed Money says

    I love reading stories where people buck conventional wisdom and reach FIRE. I feel like people are looking for an easy formula in life but what works for some clearly doesn’t work for others. Thanks for sharing your thoughts on bucking the trend, I look forward to reading more updates in the future!!!

    • FIRECracker says

      Thanks, Mustard Seed Money! I’m just glad I had Jim and Mr Money Mustache’s footsteps to follow. It’s way easier to buck convention when others have proven it can be done 😉

  22. Josh Lester says

    Great article. Got me thinking about a few things differently. I don’t know that I agree with everything in the stage of life I’m in now, but I agree with letting the numbers make the decision. Yes, I am(was) an Engineer by education/training. The things that trip me up, like always, are the unquantifiable things. With three kids 5 and under, we have the decision of what we want to do with the next several years. We’ll reach FI in a few years (3 or so) depending on what I sell and how investments go between now and then. We plan on traveling for extended time with the kids, living different places and perhaps spending a couple years sailing. We clearly value our flexibility, but also wonder if the anchor of a “home base” would be a positive in their lives or just a “perceived positive” born out of our own insecurity.

    The other aspect is that I love renovation and it is a part of my real estate side “business”. A part that I will likely expand in “retirement”. We would not buy the home we are in again, and all variables factored in, will lose money on the “investment”. Chock that up to growth and immature decisions 10 years ago. If we buy again, it would be a total renovation project that we can build equity into and pull our cash out(or on the flip side pay cash for if that is the right decision at the time depending on nest egg and cost). It has worked well for my investment properties. Of course that still leaves us with operating costs and no income from the asset. Again, your home is a terrible investment. That’s fine as long as it is the right lifestyle choice and you realize it going in.

    No offense Cracker, but I’d love to hear an opinion from MMM, JLC, or others that do or may have enjoyed renovation and real estate investing at one point and also have raised kids as part of this equation. It changes things a lot, if not the math. Not saying a difference decision would be reached, but there are more variables.

    Or I’m just validating my doubt and insecurity. I guess questioning it is the first step. That’s at least what I’m teaching my kids.

    Love the blog. Thanks for the thoughts.

      • Josh Lester says

        Thanks JLC. I’ve looked at both site previously and will dig in. I guess I perhaps wasn’t as clear as I could be with my stream of consciousness. Thanks for replying so quickly though.

        My concern isn’t about the rental properties as that is all numbers. I have that figured out, am making good money there and enjoying it for now. My concern is whether a good buy and personally executed renovation (far less spent than equity gained) outweighs the negative math of long term home ownership (for our personal residence). I guess I just need to expand my spreadsheet. Either way, its not going to greatly effect my retirement or FI date.

  23. ZJ Thorne says

    I love renting. When there is a problem, I call someone whose job it is to handle it. I don’t need to worry about big maintenance, I can focus my energy where I want to in life. I also don’t have a car and have not driven in 7 years. I use public transportation and my two feet for most things. I have been known to literally run my errands. When necessary, I can easily afford an Uber and let someone else handle the driving.

    This philosophy applies to buying tools, too. You probably don’t need big X, you can rent it for the weekend and not have it take up space in your garage.

  24. JLed says

    It’s always interesting to hear about these sorts of experiences when it comes to cars and housing….I live in the suburbs of Atlanta and the reality here is much different. Atlanta is a commuter city and it is almost impossible to get around without a car. It IS impossible in the metro area where I am (on the edge of suburb and rural). In my neighborhood, most houses are within 5 years old and are selling in the low $200’s. My own house was appraised this year for $206,000. The exact same floorplan across the street is rents for between $1500-$1600/month. My mortgage payment? $1100. It is hard to justify renting the same house for $400-500 more than owning. Perhaps the Atlanta market is somewhat unique but it really seems that renting is more expensive than owning around here. In bigger cities I can totally see the benefit of renting…definintely interesting to see different situations.

    The vehicle thing is also interesting in different places. I couldn’t even imagine not owning a car since I’ve always lived either in the Atlanta suburbs or in rural GA for college. Different strokes for different folks!

    There are many paths to successful retirement…we just need to find a way that works for each of us according to our goals and needs!

  25. Primal Prosperity says

    I do agree that you have to run the numbers and not give into emotions when shopping for a home. However, real estate investing has done me well. I have a niche approach where I only invest in condos under $50k and use a line of credit. The units are typically $20k-$35k, and only class B. Condos are cheaper to buy, but still super easy to rent out. You also always have a built in maintenance crew. I also utilize leasing agents and property managers, to keep my work to a minimum. Even with all these costs factored in, I still average a greater than 15% ROI and the tax benefits of depreciation are great. Although, even with property managers, they are a bit of work. Not much, since I don’t own stand alone buildings, but some work. I once figured out that the amount of time that I spend on them, versus the rental income averaged out to about $1,000 per hour. Granted, that doesn’t count the hours… and hours that I spend searching for new units, researching, reading budgets, talking to HOAs, closing the deal, inspections, etc… However, I love all that stuff. I’m always searching for the next deal and I love being so involved in my investing. Even though I max out my IRA every year, the stock market bores me to death, so it is far too passive for someone like me.

    You might be interested in this article on Budgets Are Sexy:

    • jlcollinsnh says


      If you are willing to put in the work, investing in RE can be a great option. All the better if you like the work.

      Interesting article.

      I love the ideo of hotel living. Not sure I’d want to own a hotel room. 🙂

  26. Michael Meyers says

    I was floored by this observation: That renting reduces the volatility of your expenses. Makes perfect sense, but I would venture to say that many home owners (i.e., me) went into their first home under the mistaken belief that they were reducing volatility. After all, the mortgage payment is consistent; landlords can no longer just jack up the rent. But any one who owns a home knows that is nonsense. Thanks for sharing, Jim!

    • jlcollinsnh says

      “…any one who owns a home knows that is nonsense.”

      They may know it, but few seem willing/able to admit it. 😉

  27. Jacq says

    My friend rents in a house and rent hasn’t gone up in the entire time I’ve known her. It’s an older guy who owns the house and lives in one part & rents 2 or 3 spaces. Her rent is very reasonable. Cool. 🙂
    I rented an apartment in an apartment complex. My rent went up every year. Then the management company changed, and they did not have their act together. I always paid early, and due to their ability to get the checks to the bank, kept giving me late charges. Then, I came home to an eviction notice on my door! My rent got credited to someone else’s account. Then those 2 accounts got merged and although I paid on time, I got charged a late fee for the other person’s rent!
    As for no large unexpected expenses, there was a fire in my apartment building, and while I had water damage (no fire damage), I had to lay out the money for all my purchases before insurance reimbursed me. Sure it wasn’t the cost of a roof, and I’m prudent so I had the money in savings…but not everyone does.
    I work in bio-pharmaceuticals, and in most cases they build the facilities away from residential areas, due to zoning. My current job is in a different county than my residence. Because of this, google maps will tell me to take public transport will be 4,6, or 8+ hours. I can take the bus out to the airport, and pick up one for the other county. This region is close to a metropolitan center and apartments close to work are 500+/month more than where I had been living (that would really affect my savings rate, I’ll commute.)
    A big part of my interest in FI is to be able to live in a lower cost of living area, without a ridiculous commute (or work from home), reduce some of my carbon foot print. This industry is still very paper based, and the lab people have to perform the work in the lab (no testing plates in your home fridge please!) so for now I’ll be here.
    For people who can rent & use car sharing (or bike sharing) services, I am happy for you & I don’t discount it as an option for my some day, but for now, my geographic area & need to get to a job M-F it’s not my lifestyle.

  28. Medelene Tran says

    Thanks for this post! As a 26 year old, my parents have been on my butt about buying a place, but after reading this post, seeing Millenial Revolution’s appearance in a news video and reading your book, my thoughts about how I should invest my money and owning a property have completely shifted.

    Do you have any thoughts on the way the recent election will or will not affect investment? I know that you mentioned in your book that the market eventually will recover and if we were facing an apocalypse, the market would be irrelevant anyway. Still true?

      • Travis says

        Thank you Mr. Collins. And thank you for sharing on this site, podcasts, etc. I’ve learned a lot from you. I remember listening to you on some podcast and it sort of reminded me of hearing Harry Browne. I had listened to all his radio show episodes and had a feeling like he was a grandpa I wish I’d had (mine weren’t bad, but they didn’t share the lessons they’d learned in life). I suppose you’d be more like an Uncle I wish I had. 😀 😀

  29. Alex says

    Just want to chime in and say this 100% completely applies to the Washington, DC area as well. I have been car-free and happy for 2 years now and do the 20 mile commute by bike most days with the local metro as backup during bad weather. I have saved over $3000 in vehicle operational costs in just the last year alone.

    I hear the same lame excuses about “needing” a car from people here too. Considering I have at least 4 different ways of getting around, 3 different variations of each of those: lyft or uber? bikeshare or personal bike? car2go or zipcar? Metro train or bus? etc etc. The options are endless. Considering all the speed cameras and parking tickets on top, this is even more of a justification of a carless existence to me, and owning is just ludicrous. On top of that average prices for a 1 bedroom condo hover around $300k-$400k (if you want a good one bedroom you’re looking at $500k+) renting around here simply makes more sense. I tire of people telling me that buying a house is an investment, it’s flat out wrong; Maybe I should ask them if they thinking owning a car is an investment to make my point?

  30. Julie says

    I fell for the renting is throwing your money away concept for my first home (plus I wanted the tax deduction). So I saved up to buy an apartment. After reading this, I calculated that I could be saving an additional $17k a year by renting a nicer apartment in the same neighborhood. I’m really regretting my decision right now. Though I do have to say that part of me feels like I am exchanging the extra 17k for peace of mind that my rent won’t go up, and for other small quality of life issues like, I live in a coop so I get to pick my neighbors and such. Obviously, renting vs. buying once you’re fully informed (which I don’t think I was) is very much a personal choice. But hands down, renting in big expensive cities wins. (I apologize if I’m being redundant, I didn’t read the previous comments).

  31. Pinoy4Ever says

    My wife and I are home owners in Southern California and are in our late 40’s. We also own 2 cars. We pay $6,600 per month in mortagage, property tax and car notes. Our net worth is $1 Million with $800K in home equity and $200K in stocks/bonds/cash. We have had 10 years of unforgettable memories in our house, but I would throw those all away if we were renters and had $2 Million in our investment accounts. This would allow us to retire today!! Instead, we’re stuck in high stress jobs, with grey hair and high blood pressure. We have all the toys to keep up with the Joneses but lack true FI. We only recently saw the light and started investing in low cost index funds (versus putting the majority of our money into our mortgage). We can’t wait until that day we finally get to fire our bosses ????

    • Bernard Paulsen says

      I live in Ojai, which is one of the nicest areas of SoCal. A starter home is $550K, and there are almost no affordable rentals. My mortgage is $3,176.10 per month (all in), and if I had to rent our home, ti would cost about the same.

      I’ll stay in our home ’til retirement comes. Then I’ll sell, take the equity, and buy a small home somewhere else (contender is Asheville, NC) outright, and put the rest into investments. You can do the same. Sell your house tomorrow, take the $800K in equity, buy a small house for $250K somewhere, and put the $500K+ into y our retirement accounts.
      Where’s the problem?

      That out of the way, there’s more to home ownership that naked numbers. Before buying, we rented a sweet small home that the owner NEVER promised to sell. Well, they eventually decided to sell, TWICE. Home ownership means peace of mind not having to move, not having to ask for permission for everything, not having to worry about a dog or cat, and being able to do whatever you want. Put a price on that!

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