Ramit dear, as someone who has been in higher ed for 30 years and has worked in financial aid for almost 20, I would like to clarify the whole scholarship issue. Some schools, mostly private or Ivy, have lots of scholarship funds to offer. HOWEVER - these are mostly merit based or incentive based at admissions and either don't cover too many students at all OR they don't cover the student enough for their full enrollment OR they don't cover the student through the full four years. The vast majority of scholarships have qualifiers attached and if the student loses any of those qualifiers during enrollment, the money goes away... In my whole career, I have only seen TWO full ride (non-athletic) scholarships that cover the student's full tuition, fees, room and board. The rest were a few thousand here and there and the student still had to come up with the rest of their bill with other aid or loans. I see parents and students EVERY DAY who are surprised at the fact that they have to pay so much for college. They ALL thought the university was going to cough up some money to assist. So many books sell them on this idea - it's wrong. And I have to tell them EVERY DAY that colleges are a BUSINESS and just like your credit card, they are not in the market to give you anything for free, including scholarships. Chose your college and major wisely...
I had half my education paid for the first year through scholarships. My freshmen year i ended with about a 2.9 gpa, and because it was below a 3.0, i lost them all. Had to pay full price after that.
I am a fan of the channel and have watched most of your videos great content. But, the numbers you are using for college cost and loan debts are from about 10 to 15 years ago. Most college's housing cost alone are about $15,000 to $20,000 (that just room and board not tuition) and most students have loans that are 4, 5, even 10 times the student loan debt you say is average here.
I'd respectfully push back on the home ownership stuff. I'm 49 with 4 kids. I've observed hundreds of families through both my work and the public school system. The stability offered in home ownership pretty much defines the stability of the family as a unit. It seems pretty true across the board. I wouldn't dismiss it so lightly. It's a pretty big deal to own the house you live in.
Real estate has also built more wealth than anything else. He's a smart investor, but most people spend more if they have more. A mortgage is also a forced savings.
@@jonb740This is not true. Stocks historically have higher returns than real estate in the US. 10% vs real estate’s 4-8%. But additionally too many people calculate profit on their real estate by the house’s current equity minus the price they bought it for. No mention of property taxes, interest, home insurance, and maintenance costs paid overtime. Yes a lot of wealthy people have their money in real estate. However the upkeep of real estate actually costs way more than the upkeep of investing in the stocks market. Caveat is this is really only true in countries that have strong stock markets like the US.
Seriously true. And god forbid you live in one of the coveted "good schools" upscale suburban towns and 'word gets out' that poor little Judy and Bobby's parents rent. Upscale burb culture is brutal towards families that do not have the apparent trappings of 'wealth'. Never mind that most moms with a 4500 sqft house, 3 car garage, and an Escalade are financed out the ass. Very little equity, because it's likely they used that McMansion as a piggy bank to get... stuff. God help you if you don't have enough... stuff. We live in a hyper consumerist culture where no matter how much crap you have, no matter the lifestyle you live, YOU MUST HAVE MORE!
I love your system. Your book is my 1 of 2 personal finance recommendations for anyone who asks or family. A money system is so important and i think almost never gets talked about as detailed as this ❤❤❤
The zoning question for real estate development I completely agree. Just here in North GA in my local area a builder want to construct a 50 unit apartment complex. The locals went nuts and attempted to paint the builder as low cost housing (even a few hot heads stated slum lord). Get this the apartment size in the proposed complex started at 1,500 square foot and with some units as large as 2,500 square foot. Hardly entry level the developer wanted to go after middle middle class to entry upper middle class Generation X and Boomer's who tired of home ownership. Did the project get built?? HELL NO!
What’s also frustrating is people forget the tax revenue that brings into the community. The developer that owns the complex will have to pay property taxes just like anyone else. That’s a good thing for your community. Plus you’re right on price. If a developer builds nice rentals that cost $3000 a month that’s going to bring in affluent people to the community who will be pumping their money into local businesses.
Agreed. Alternatives need to be created that are more affordable and align better with most people. Also the loans must lose their protection from bankruptcy.
Agree. While I'm generally against student loan forgiveness, if the forgiveness plan depended on measure containing or reducing costs, I would support student loan forgiveness. Makes no sense to forgive the loans of millions if millions of people coming up find themselves in the same place years from now.
I believe it's high for two reasons. First reason is because the Government gives tuition to those that need it and they don't have a max that they will hand out to schools so every year schools just charge more because they know that the Government will always approve higher loans at the expense of the student. The second reason is that colleges promote and pay for ridiculous and outlandish things to make their college "look" better so students apply to them over other schools. If they quit wasting cash on pointless things that don't have anything to do with education students would have cheaper tuition. Too much wasteful spending just like the Government. Not everyone should go to college. If anything, the majority of people shouldn't go.
I want to own my house because my hobby is home improvement. It's my passion and what I love to do in my spare time. And I can only really do that if I own my home. Owning my home and improving it IS MY rich life.
@@Kevin-fn1rninstead you force your employees to rely on tips to get by. If you can't afford to pay your staff a decent wage then your company shouldn't exist.
@@roaldruss4211 you're delusional. People put up their own money and risk going under to start small businesses, you can't just mandate arbitrary wages be paid
My Strategy was: Community college + grow into adulting while working part time and living at home --> transfer to a university when you know what to specialize in . Get into the best college that I can afford.
Unfortunately, not all of us were financially literate early. I was 35 when I finally educated myself and started taking steps. I went from $176,000 in debt with zero savings or retirement to now, 2 years later, fully debt-free and over $1000,000 net worth. I know that doesn't SOUND like a lot, but I'm incredibly proud of it. Now I'm fast-tracking my wealth building (investing $400,000 annually) and don't owe a dime to anyone. It's a good feeling!
Making touch with financial advisors like Elizabeth Regina Nelson who can assist you restructure your portfolio, would be a very creative option. Personal financial management will be crucial to navigating the next difficult times
Oh Ramit. Those words that you called random aren't actually random at all! Hansel and Gretel are people who almost died because of their dream house, and Rapunzel is someone that's stuck in their housing situation. All very relevant to this topic.
Ok, who is only paing $2k a month for rent, utilities, food, & real necessities? I was getting hopeful that Ramit was finally getting on board with reality, but then he said that! More like $2,500 + transportation in Texas for single person in modest but safe apt. Housemate? Where are they supposed to sleep, on the couch?
I’m paying less than that but I struggled for a while just to get there. I’m Gen X (52), completely debt free (mortgage included) with Dave Ramsey teachings and live frugally. I’ll retire in 2027 when the last one goes off to college ( which is funded already for her). My other 2 kids are grown and debt free as well and doing very well ( I thank God everyday that they listened to me and they watched me get debt free too) It wasn’t easy but you just have to start where you are and be consistent and intentional.. I realize that what I’ve accomplished is not normal so don’t be normal either. Wishing you the best
@@Nisa-gm5wg Major congrats & may God bless you! Ramit was referring to the younger people renting who need to save for emergency fund to meet basic needs.
Location matters plays the biggest role. I’m in a Fort Worth suburb paying $1184 rent in a gated diverse community with zero safety issues. When I moved in 2021 it was $965. However they have added a ton of mandatory monthly fees over the years which adds up. Car insurance has been the next most ridiculous issue for me.
@chrisandtimothy yeah, what Ramit misses a lot, and this has been going on for at least a decade, landlord's will force you to have renters insurance they will bill you the water even though you have no separate water meter, they even divvy up the garbage cost among all of the tenants. These are things that they used to just quietly build into the rent. I couldn't believe it when I started seeing that! Half of what they do is not even legal, but Texas is a state for landlords not renters! Yep insurance had a State wide increase again recently it is a painful one! It may have even been the nation wide increase We need these storms to stop!
@@ang8925 I know it was for the younger generation. I just wanted to encourage the young folks to start now. Let your young self take care of the old you in the future. I was young when I got started (2003 went to a Dave Ramsey conference). That was my beginning. I like Ramit as well. I just found him about a year ago. Thanks for responding
I think choosing the right major is much more complicated than ever before. Not everyone needs to be an engineer, or a doctor etc. we gotta start paying and treating all careers better across the board because not everyone can do and be in these careers.
Historically, the careers that are the hardest pay the most. Someone who does an "easy" or a more replicatable career will be paid less. That's just how it work.
As someone with a "good" career (I do embedded software, I have a MSc in CS), it's not as easy as pick a good major and it's fine. The job market shifts ( thousands of my engineering coworkers have been laid off), and the prospects for advancement are always limited. It's paid for my life pretty well, but it's not an unlimited job market, and other work needs to be done that is underpaid.
I think saying American's aren't living paycheck to paycheck, is a privileged point of view. I might agree with you in the literal sense that maybe their entire money isn't gone once bills are paid. but what's left after the bills is barely enough to survive through the month. It will be difficult to convince the people who are experiencing this that it isn't happening to them.
I agree with the difficulties of convincing someone like me of this. The whole working for less than what rent would cost me if I didn't have two roommates for this two bedroom house is pretty devastating. However after enough time I have been convinced and am now trying to use what little I have extra to save up for some electrician classes in the hope I can increase my meager income. I'm about half way there, and switching from paying my full Netflix to only paying my coworkers difference in how much it went up along with giving up my Spotify being ad free along with some straight up mooching food from some friends to cut back on my food expenses is how I'm saving the difference.
Same here. I still have money left over after all is paid but I only have a 1-2 months emergency funds saved up before I’m screwed. Working a full time job and paying out of pocket for community college full time. No one else to rely on but myself. I will say I feel more comfortable today than I did last year, a $2 raise and a $1200 bonus Christmas saved my entire financial situation.
Yall miss the most important point of Ramit’s video. He agrees the system is stacked against you. He actually volunteers, votes, and works to improve the lives of the working class. But he doesn’t want to see so many people sit and complain. He is trying to give everyone a path out. His whole purpose is to HELP, not to give you click bait videos to cry about the state of the economy together.
@@robertmontgomery8107 I don’t disagree with your statement. I think two things can be true at once. I just finished Ramit’s book last month and have finally become financially literate thanks to him. He is an amazing person.
@@robertmontgomery8107He’s out of touch with the finances of average people. Look at his podcast. Usually wealthy people that are just cheap or who live beyond their means. He doesn’t even understand that net worth for your average American is tied up in their primary residence. Good luck buying groceries with your home equity.
American dream I think of: having a family, nice stable job, owning a home, & raising kids. Job in the only one I have but adding a new item to dream, building the investment accounts towards comfortable retirement planning.
Writing down your daily expenses in a notepad helps a whole lot. Paying with cash you feel the money leaving you. Swiping a card is easiest on the mind. But if you write it down you feel each number.
I have a property zoned for a triplex but the city won't allow me to develop it, they made an excuse about the neighborhood's green house emissions, and population density. I offered the units for low income housing and that really slammed the door shut.
We were lucky to own the first house in 2011. We paid off in 2 yo and 1 m. We bought the 2nd house in 2019 before the pandemic because we realized the school scores in the first house wasn't great as well as we realized a 3-story house doesn't good fit for our retirement, obviously. If we're looking for a house right now, we would buy a small house in the different city or rent a very old apartment.
One thing I’ve started thinking about recently is people who buy second homes as an investment. I wonder how many of them would consider taking a loan from the bank to invest in a REIT instead. I would suspect almost none although functionally these are both similar. All of this to say that I think most people don’t understand how leveraged they are when they buy a house with a mortgage.
I'm a single guy, I much prefer being able to rent a 1 BR while maxing my 401k, HSA & Roth IRA. Houses are for families. Also got my degree while working full time. Life is good.
I do agree with him that the American dream isn't dead, but its harder and very different from what the previous generation has to do, especially for anyone making under the US median income, or even the average income of their area. It's become 4 times harder, to be exact. This doesn't make it dead, but you will have to work much harder to "get" it.
Dual income as the average household had increased competition in all areas including pushed housing prices up. It also means that birth rates are down as couples want to keep having (at least) an average middle class lifestyle. Single people are toast in this reality and single parents are even further behind.
Birth rates are a lot down due to infertility. It's up to 15% of couples now. Money plays a part because people are waiting but as someone who straight up couldn't have kids your comment is a little triggering.
@@101289teutonicguy If you are triggered by facts then you have a difficult life ahead of you. People are choosing lifestyle over having children because without the double income they fall further than they are willing to accept. It is happening all over the western world.
Thank you. We have been doing this for years. I retired after 30 years with the military. We still invest part of the pension. Everything is automated, but we tell our college grad daughter: invest in your pension, invest in a brokerage and high yield account, keep credit card below 20% and pay off monthly. She is told to allocate money for car maintenance, repairs, and a replacement vehicle. She makes below $30K now, but that is temporary. We are here to foster guidance and make suggestions. Living has been difficult for many people for various reasons. High cost of location, medical bills and student loans have gotten out of control. Wages have not kept up with the increase, but they must initiate a plan. It may take years, but it must be done.
Illiquid wealth is still real wealth (though I personally think it's a poor way to accumulate wealth due, in part, to its illiquidity). Nonetheless, it's real, as is the balance in Americans' cash accounts.
I completely agree with automation (I'm 70 yrs old) even back in the day of the 1970's you could auto-draft money from your checking account into different places. My choice was the Franklin Utilities Fund where every month a stated amount went straight to buying shares. Month after month turned into year after year then decade after decade. Fast forward to today I no longer am buying I'm having the mutual fund send me a check every month. AUTOMATION WORKS!
A fast food job is a starter position and isn’t meant to be a career. When I was in one I had 2 Roommates and split the bills while going to college. Worked nights and weekends while studying all day. It’s doable. Also, started at community college to cut the costs those first years and owned small used cars.
Ramit, when you look at the cost of housing only through the lens of the multiple of salary to price, you miss part of the equation. This only tells the whole story when buying the home for cash, which most people don’t. You also have to factor in the cost of capital. That’s why in the early 80s, even though the multiple was 3-4x, home affordability was still very difficult. Mortgage rates in the high teens meant affording the average home on the average salary took well above 40% of that salary. Similar to where we are today. Not saying things aren’t hard today, just not unprecedented. Now, I totally agree with you that strategic under building and NIMBYISM have exacerbated today’s challenges. But, WFH has opened up more opportunities to live in affordable areas than ever before.
Ok. One credit in Lansing community college in the 80s would cost $20 for residents and $35 for out of state and international students. $20! One hour of work was like $3. So, you had to work a full day to buy one credit. So, most students would take 3 to 4 classes. That’s 12- 16. Some classes were worth 5. Credits. I think you could take less credits for trimester but international students were obligated to take at least 12 or more (3 classes of 4 credits each) credits. So, one trimester (12 weeks) would cost up to 16 days of work. 12 credits would cost 12 days of work. So, how many hours work would cost to pay one credit today? Oh, I almost forgot, one credit at Southern Illinois University at Carbondale would cost $100 per credit. 5 times more than a community college.
I got my start at LCC then went on to law school. I live in Dallas now and the Dallas community college system offers residents a lower tuition price made possible by property taxes. which I am happy to pay. Idk where LCC costs are today but I imagine they are still lower than MSU or U of M, for example. Community college can be a good option for those who don't want debt or too much debt, would like to go into a trade, or haven't settled on a particular path.
Also, it is a great way to get your feet wet before going to university. But I wanted to pay less for basic classes and get a Media technology degree. Communication. How to operate cameras, switches as technical directors, lighting, audio mixing, microphones. Etc. then moved to SIU. SIU accepted most credits but not all. So it is good to check what the university is willing to take. I knew lots of people going to LCC before going into Law School.
Now today, we can take classes for editing videos, after effects and photoshop. Get good at it. Then start applying for those jobs. And not spend 4 years at a university.
But if your goal is to be a CEO. Maybe have a BS in accounting? And a master. But hey! If you are Steve Jobs, Bill gates or you are Zuckerberg. You don’t need one.
I'm not going to lie; my favorite part is when you get frustrated and ask some really important questions at 10:37 in the video. I am a Canadian mortgage broker, and while our housing and rental markets and costs are definitely different from those in the U.S., we face similar issues with people jumping into homeownership without fully understanding how mortgages work and the additional costs involved. I don't understand why financial literacy isn't taught in schools but thankfully, there are channels like yours that provide this education.
@@laundrygoddess4 What part of Canada are you in? I know that in Ontario, they are implementing some education on finance, but in BC, especially in the smaller cities and centers, there isn't really anything for it in the system. :( That said, I'm so happy to hear it is being implemented! I have a one year, so I am still waiting for direct interaction with the school system. All I know is what I have heard from people and clients with kids in school.
Ramit: "Housing is more expensive than ever" Also Ramit: "Americans aren't living to paycheck, look at the value of their houses and how it's driving their net worth!"
@@ramitsethi Yes, I do. Do you see how net worth has nothing to do with cash flow? It's entirely possible to grow your net worth while saving $0 if your house has appreciated. Correlation Causation.
“The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.”
@@danepinneyPay check to paycheck implies there is no viable solution for you. If your house is killing your bank account, you can’t afford it. Downsize or rent. Or run the numbers, stay in it, and just don’t do anything else. The paycheck to paycheck conversation has to be prefaced with the fact that you do not in fact have to own a house to live a good and decent life.
@@ramitsethi But Ramit, you rant against home ownership, then state Americans are in great shape because the median net worth is nearly $200K, but do not acknowledge that most of that worth is equity in the home they own! High Irony! Most Americans just do not have a significant amount of money in the stock market. The top 10% of Americans held 93% of all stocks, the highest level ever recorded. Meanwhile, the bottom 50% of Americans held just 1% of all stocks in the third quarter of 2023. And remember, I'm not whining about my personal situation, our household has plenty. But you have got to acknowledge that you self contradict in your argument that Americans are in better shape than the actual stats suggest. No, we are not! Especially fresh college grads.
American are trained to become consumers. This consumption leaves them with minimal wealth. Does this apply to everyone? Absolutely not. I know when i go through my friends finances to help I cut 100s from the money spent and convert to investments.
I think this ignores how much a large portion of Americans don’t make enough money to keep up with everything. I can’t save my way to my goals when my income isn’t there compared to other peers. And I’m a teacher - we can’t tell all the teachers to leave and get better jobs. The saving advice is great though. Just disheartening for those like me feeling incredibly stuck.
He doesn't ignore it. There are plenty of sources talking about how bad it is and complaining about the state of the economy. He is focused on trying to provide solutions, tricks, and tips to slowly claw your way out. He personally votes, volunteers, and advocates for policies to fix the economy. He is doing his best to give solutions, not to just complain.
I know this. Ramit is a great guy. I’ve seen everything he’s been advocating for and it’s greatly appreciated. I’m just pointing out, in this video, I think a little tangent of how inequitable salaries are becoming for those in different careers would be a good side bar conversation. Because, to me, yes the American dream feels dead.
@@adamschroeder3898we can surely tell all teachers to leave and get better jobs. they simple wouldnt do it. and now let me play devils advocate: why would i pay someone more if regardless of the pay, he choses to stay?
@@clonehunterz I don't know what you're trying to tell me here. In my comment, I meant that if all teachers left to get higher paying jobs, we wouldn't have teachers left. We can get into personal philosophies for the country, but I firmly believe public education should be a much higher priority than it is at the moment. This isn't just about teachers. EMT's should be paid more. So many other professions are being forgotten and left behind in terms of pay scale. To your devil's advocate comment, I don't know. I wish we lived in a more equitable world, and I was just lamenting in my previous comment.
From an immigrant standpoint, I personally think we are all privileged to live and breathe in this country. Most of the basic things and necessities are offered sometimes free or cheap you just need to look around. Rent or buy what you can only afford. Food, household items, etc there are coupons you can use if you are diligent to look around. You have lots of opportunities to work for a part time job, sidelines, or overtime. Internet sites that allows you save and earn cash backs or discounts. I think people can save if we live according to our means. The American dream not relatively dead but harder to reach these days.
In housing terms, the US is just catching up with the other perpetually expensive real estate markets in the world like UK, Korea & Canada which became unafforable in the 2000s and have never corrected properly. It's unlikely to get better and will only increase the gap between rich and poor in the future.
This could be true. If so, it will be a very dark future for anyone but the wealthy. This is why I'm politically active and constantly remind people to vote for politicians who build more housing
At 13 mins on is amazing! I do this, and I recently helped my son to set up his this way as well, with all Capital One accounts. The only difference for us, is that we have everything feed from our main big savings account, instead of the checking account. That way if I fall into a coma, all my bills will be paid, without a paycheck, until my savings are gone. Currently I could go 10 months until savings ran out with no additional paycheck coming in.
I’m feeling like my whole region is gonna be screwed over by mass government layoffs and I’m gonna have to sell the house I just bought and leave the area.
I believe setting fixed expenses on autopay is fine, but anything with variable costs should still be manual. How do you know if your credit card bill is correct if you don't even look at it
When it comes to post high school education the college degree lifetime earnings has been overblown in order to bring in more students. These lifetime numbers need to be viewed very carefully and yes I agree with the video presenter your major will speak volumes as to dollars earned. Many folks in the trades have done very well and those with ambition have out performed many of their college degreed peers. It simply depends on the industry of choice.
Ramit - you are 100% correct that NIMBYism is a huge problem that has resulted in high housing costs. Spot on there. However, you never talk about rent control (at least that I have found, and I listen to nearly all your content). Rent control is a form of NIMBYism. And nearly every study out there shows that it results in creating more barriers to housing supply. Why don’t you talk about this?
Too complicated for the average person, who still believes that housing prices only go up, buying is always better, renting is for losers, and the stock market is gambling.
@@ramitsethithere really isn’t anything complicated about it. NIMBYism is bad because it discourages new housing from being built. Rent control does the same. The point is to build more housing, as you rightfully point out. That is why rent control is bad. I don’t know why you don’t discuss this.
Yeah for sure. I can’t afford to leave my parents home. I make 1800 to 3000 a week depending on overtime. Take home is 1000-1700 a week after taxes. I get taxed so much I can’t live on my own and start a family. It’s insane. I spend about $600 a month on gas cuz I commute and $100 on an oil change so it cost me $700 a month just to get to work. So the months that I only take home 4k I would be screwed if I had a 2k rent payment. I can’t buy a home cuz 20% is 100k on every decent home. Then after that the mortgage is still 3k a month.
This is so true, we are in Canada and it’s the same for houses and college, my oldest is 18 and he doesn’t want to go to college but I don’t really know what the right decision is, I mean making minimum wage for even a few years is probably going to be draining???
It will be even worse going to college taking out a whole bunch of student loans that will take years to pay back. If you don’t have a 529 plan then him starting at minimum wage and living at home until 30 even if he has a degree shouldn’t be too bad cause life is expensive
So, 20 x 60 credits =$1,200 - 100 x 120 = $12,000. Assuming you don’t want to pay other fees like the gym. I didn’t like to pay those extra fee some colleges ask. Back then anyways.
I find the housing cost vs income ratio overly simplistic. At an income of 20k per year it’s only reasonable to re able to save 2-5k per year meaning an 80k house is 16-20 times savings rate. With an 80k income it’s reasonable to be able to save 20-30k per year meaning you could afford a 350k-600k house at the same savings rate
The presenter stated he has made more money by renting and investing the difference over the past 20 years ago. Since he is a top notch investor during the housing crash he could have bought a house on the extreme cheap and as housing recovered then skyrocketed in price AND he would still have extra money to invest elsewhere. So his past 20 years I don't agree HOWEVER TODAY I agree 100% that renting is cheaper than buying. It is simply a matter of valuations that tells you when to buy and when to sell no matter what asset category you are using!
I would be fun to know how much a «non-house buyer” pay in post mortgage rent compared to what the difference in mortgage vs rent invested in the years of down payment gives when living in a major city in the Us. For someone living in Europe it’s not possible to know what the levels of rent are in the Us.
No, it's not dead. But it's never been easy and it's not getting any easier. If you're trying to make it happen in a high cost of living area the deck is stacked against you. If you're trying to make it happen working an unskilled or semi-skilled job the deck is stacked against you. If you're going for a college degree that doesn't lead to good career options the deck is stacked against you. If you live beyond your means the deck is stacked against you. But if you take cost of living into account in your choice on where you live, make choices that lead to good careers whether that's college, the trades, being an entrepeneur, etc and live below your means building up investments for your future you've got an honest shot at it. It's still happening here where I live in the Midwest.
The housing situation is actually worse than what he illustrated. Household income included a lot of single income household, whereas now it is mostly dual income household. So one person could afford a home and now 2 persons can barely afford one!
He shows that line chart where income barely budges in 40 years while home prices quintuple all the while saying "ALL IS WELL! REMAIN CALM! THERE IS HOPE!!" Uh, no there is not unless you are a top 25%er who bought and invested years ago. Period. Full Stop.
Why is the American dream thought to be a house? It is really financial independence. A house can be a piece, but it isn't a game changer. Rules changed: a house is bought with wealth, not to build it.
There has never been any such thing as an American dream. Political talking point, perhaps. But nothing more. But the idea that every American has a shot at the brass ring, is nonsense. I am comfortably retired and have no skin in that game. Just my opinion.
Personally, I ABSOLUTELY think the American Dream is dead and has been for some time. NO one can afford anything anymore, and it's only getting worse. Unless there is some MAJOR reform, I don't see how anything is going to get better. It's really, really sad. As for me, I don't really care for the American Dream crap. I've never wanted a family or an SO or kids, and I don't care to own a house (mostly after watching my parents struggle with it and watching/reading a lot of rent vs buy vids/articles/books, espec yours, Ramit). It doesn't affect me much at all. I DO wish, though, and HOPE and PRAY that the 40-hour work week and working ourselves to the bone and NEVER feeling like we can just LIVE gets gutted and sent packing in the years to come, preferably MUCH sooner than later! It's destroying so many of us, espec younger people, inside and out, and it NEEDS to STOP!
With net worth statistic I wonder how much is that skew by house value. As you say over and over again a lot people buy houses without running the numbers and so someone’s home could be worth decent amount but they are drowning due to property taxes increases combined with insurance increases combined with marginal but noticeable food and gas increases combined utilities increase. All while their income went up a laughable 1% resulting in living paycheck to paycheck feeling not having income go as far as before
The Australian dream is definately dead. If you don't have a parent to help (which alot don't have due to broken homes) whether that's to let you live at home to save or by going guarantor on a home loan how is it possible?
Again, in reference to emergency fund to meet basic living expenses. Rent, food, real necessities. 3 years ago, I was chatting with the owner of an OG property management firm. He has been a real estate investor for over 40 years and manages properties All over Texas. I said, it seems that a person cannot get by (barely afford the basics) on $40,000 a year. His answer? ABSOLUTELY NOT! And remember, he sees the wages of all kinds of people,
Sorry just to cut to the chase: life seemed easier in the past because people are drinking marketing material from that era without any of the attached reality while also remembering what it was like to have their parents do everything for them. In another video somebody was complaining about their grocery bills in the comments and it turned out it was because they had fresh fish flown to them weekly and were upset how expensive it was. People are fucking delusional.This makes it hard to have conversations about these matters online because people just lie, bullshit, or don't even know basic facts about their own situation constantly.
Did dude is a fool. Don’t listen to him. Rent will always go up, but your mortgage will always be the same. Plus, who says that you can’t invest while owning a home?
Ramit. You're correct that "Rent and Invest (the difference between what your rent is and what a mortgage in your city would be) is mathematically better" Now please - find and show me people living in a major metro area who actually follow through the "and invest" portion of that strategy. If those people exist, they're not common. All to say - you consistently undersell the "forced saving" benefit of a mortgage. Lastly - the same people who actually invest the difference would also pay off a mortgage and live with close to $0 for their housing expense for years.
Almost nobody realizes they're paying more towards interest than principal (often, for 20 years). These are one of the ways that I show people how little they understand about housing and how much they need to understand
@@ramitsethiyes. I understood this. So, in order to game the system, you take out a loan way beneath what the banks tell you you can afford. Then, add extra payments to the principle for the first 10 years. Once the glide path switches, it's probably cheaper to put the extra mortgage payment back into the market. Currently, I am only paying $180 per month on my mortgage interest while my neighbors are paying $10-13k per yr.
2:58 So in 1985, the price of a house was 3.57 times the median income. In 2023, the prices of a house was 5.29 times the median income. That's an 48% increase of the price relative to the income, not twice as much. I'd also argue that in the early 2000s, more houses were built than people could afford, leading to the 2008 crisis.
It requires a lot of sacrifices. We have been packing lunches for 15 years, started off with $500 saved on a $2600 paycheck, then $1000 on a $4000 paycheck... No nails, no salon, no buying cool tech gadgets, switching our phones every 5-6 years. Drove cars 10+ yrs old. Buy a house way below what the banks let you borrow. Banks told us we could buy $450k, we bought a $320k house 8 years ago. Then, very aggressively invest all the extra money until it hurts! If it doesn't hurts, you haven't invest enough. No Starbucks no Target or TJ maxx runs. No Shein, Temu crap. My clothes are from ll bean and i wear them for 10 years
I like the idea of automating your payments every month on the same days. Unfortunately it doesn't work for me because I get paid every 2 weeks and the dates are always different every month. This cannot be changed as all employees of my level are on the same payroll schedule. Do you have any suggestions to remedy this?
Still. “Median net worth” at $192,900, is perhaps not something that should be used to illustrate how people are doing. Especially since there’s been a lot of talk of a very wide gap between the high earners and low wage earners. It’s not fair. Not to make a point, that maybe isn’t there. Dude. That’s a lot of money, and of 15 people I can immediately think of, not one is worth that. I’m just hoping that what you show us is real, not because of “gloom and doom”. For which you’re right, but because it’s also not rainbows and glitter.
Ramit's big problem is he thinks rentals will always be available at reasonable prices. Here in Australia people with decent jobs are living in tents as there aren't enough rentals to go around. People are getting kicked out by greedy landlords and there is no recourse. This advice will come back and haunt many people stuck in tents despite having good jobs and income. Never thought it would happen here, and it's only getting worse as we boost immigration. I'm good as I bought my 1st house at 21 and got rid of all debts 20 years ago, but most people are screwed, certainly those renting. If you rent you can never relax as you know you can be evicted next week and then have to line up with 100's of others at any listings. Terrible way to live. People owning homes are the upper class, rest are plebs.
Honestly you’re overstating it. You think rent in the US is cheap? For. Nice apartment it’s pretty much the same in the major cities. Can’t relax? Yeah, which is why you have to choose a good career and continue to progress, inflation is real. You can’t see it because as you say, you bought your house 21 years ago. The situation is entirely different. Ramit is just saying to run the numbers.
@@SwaeTech The people who know how to make money aren't producing youtube content, unless that is the way they make money. If you know how to make money you're not sharing it on youtube, makes no sense. Do what I do - treat it as entertainment. Even Ramit puts that qualifier in 'This is not financial advice' : )
That is why Ramit is a YIMBY who actively shares how housing is political and encourages people to vote for local politicians who will build more housing
And people in the comments demonstrate they clearly still aren’t getting it. Are you trying to shit on the guy that is making positive, pro-help videos? What does that say about you?
I think its a valid argument but definitely could be phrased in a nicer way. I think lately I’ve only learned something new once every 3 videos. I still enjoy it ofc but there are definitely lots of topics that haven’t been delved deeply compared to the books. Very excited about the new book 🎉 should give lots of great info
The message is not being received.... His videos are excellent if you do not like them skip them... I have an MBA with a focus on economics and accounting. I share his videos with those i am trying to help because of his delivery...
I have to say it feels like living in the United States with the way housing, food, and essentials inflation is right now while investing in index funds is just keeping up with the bare minimum. The American dream requires millions of net worth at this point.
Ramit dear, as someone who has been in higher ed for 30 years and has worked in financial aid for almost 20, I would like to clarify the whole scholarship issue.
Some schools, mostly private or Ivy, have lots of scholarship funds to offer. HOWEVER - these are mostly merit based or incentive based at admissions and either don't cover too many students at all OR they don't cover the student enough for their full enrollment OR they don't cover the student through the full four years. The vast majority of scholarships have qualifiers attached and if the student loses any of those qualifiers during enrollment, the money goes away...
In my whole career, I have only seen TWO full ride (non-athletic) scholarships that cover the student's full tuition, fees, room and board. The rest were a few thousand here and there and the student still had to come up with the rest of their bill with other aid or loans.
I see parents and students EVERY DAY who are surprised at the fact that they have to pay so much for college. They ALL thought the university was going to cough up some money to assist. So many books sell them on this idea - it's wrong. And I have to tell them EVERY DAY that colleges are a BUSINESS and just like your credit card, they are not in the market to give you anything for free, including scholarships.
Chose your college and major wisely...
I had half my education paid for the first year through scholarships. My freshmen year i ended with about a 2.9 gpa, and because it was below a 3.0, i lost them all. Had to pay full price after that.
Which is why parents should start a 529 plan for their kids
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
This is probably one of my favorite videos of yours. It's direct, informative, and succinct. Thank you.
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
Ramit, you’re the best. Thank you for your direct, no-nonsense approach that still infuses optimism.
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
I am a fan of the channel and have watched most of your videos great content. But, the numbers you are using for college cost and loan debts are from about 10 to 15 years ago. Most college's housing cost alone are about $15,000 to $20,000 (that just room and board not tuition) and most students have loans that are 4, 5, even 10 times the student loan debt you say is average here.
I really enjoy the comedy you input in your videos😂
I'd respectfully push back on the home ownership stuff. I'm 49 with 4 kids. I've observed hundreds of families through both my work and the public school system. The stability offered in home ownership pretty much defines the stability of the family as a unit. It seems pretty true across the board. I wouldn't dismiss it so lightly. It's a pretty big deal to own the house you live in.
💯 completely different ball game once you have kids, they need stability.
Real estate has also built more wealth than anything else. He's a smart investor, but most people spend more if they have more. A mortgage is also a forced savings.
@@jonb740This is not true. Stocks historically have higher returns than real estate in the US. 10% vs real estate’s 4-8%.
But additionally too many people calculate profit on their real estate by the house’s current equity minus the price they bought it for. No mention of property taxes, interest, home insurance, and maintenance costs paid overtime.
Yes a lot of wealthy people have their money in real estate. However the upkeep of real estate actually costs way more than the upkeep of investing in the stocks market. Caveat is this is really only true in countries that have strong stock markets like the US.
@@neycongjuico7395 Except real estate is typically leveraged 5:1, and the gains are tax free.
Seriously true. And god forbid you live in one of the coveted "good schools" upscale suburban towns and 'word gets out' that poor little Judy and Bobby's parents rent. Upscale burb culture is brutal towards families that do not have the apparent trappings of 'wealth'. Never mind that most moms with a 4500 sqft house, 3 car garage, and an Escalade are financed out the ass. Very little equity, because it's likely they used that McMansion as a piggy bank to get... stuff. God help you if you don't have enough... stuff. We live in a hyper consumerist culture where no matter how much crap you have, no matter the lifestyle you live, YOU MUST HAVE MORE!
There’s a new Netflix doc on consumerism I suggest everyone watch this too. What a disaster we live in
What’s it called
Same, please list the name of the documentary
Name?
According to Google it's called "Buy Now: The Shopping Conspiracy"
@@journeywjess Buy Now: The Shopping Conspiracy is the one I'm assuming.
I love your system. Your book is my 1 of 2 personal finance recommendations for anyone who asks or family. A money system is so important and i think almost never gets talked about as detailed as this ❤❤❤
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
The zoning question for real estate development I completely agree. Just here in North GA in my local area a builder want to construct a 50 unit apartment complex. The locals went nuts and attempted to paint the builder as low cost housing (even a few hot heads stated slum lord). Get this the apartment size in the proposed complex started at 1,500 square foot and with some units as large as 2,500 square foot. Hardly entry level the developer wanted to go after middle middle class to entry upper middle class Generation X and Boomer's who tired of home ownership.
Did the project get built?? HELL NO!
What’s also frustrating is people forget the tax revenue that brings into the community. The developer that owns the complex will have to pay property taxes just like anyone else. That’s a good thing for your community. Plus you’re right on price. If a developer builds nice rentals that cost $3000 a month that’s going to bring in affluent people to the community who will be pumping their money into local businesses.
Sorry but hard disagree, we should definitely not just accept that the cost of college education has gotten completely out of control.
Agreed. Alternatives need to be created that are more affordable and align better with most people. Also the loans must lose their protection from bankruptcy.
Agree. While I'm generally against student loan forgiveness, if the forgiveness plan depended on measure containing or reducing costs, I would support student loan forgiveness.
Makes no sense to forgive the loans of millions if millions of people coming up find themselves in the same place years from now.
Ok. What are YOU going to actually do about it?
@@DRZLLZRDI mean... vote
I believe it's high for two reasons. First reason is because the Government gives tuition to those that need it and they don't have a max that they will hand out to schools so every year schools just charge more because they know that the Government will always approve higher loans at the expense of the student. The second reason is that colleges promote and pay for ridiculous and outlandish things to make their college "look" better so students apply to them over other schools. If they quit wasting cash on pointless things that don't have anything to do with education students would have cheaper tuition. Too much wasteful spending just like the Government. Not everyone should go to college. If anything, the majority of people shouldn't go.
I want to own my house because my hobby is home improvement. It's my passion and what I love to do in my spare time. And I can only really do that if I own my home. Owning my home and improving it IS MY rich life.
Gotta hold these companies accountable to pay their employees more.
I hope one day you start a business like a coffee shop and then I'll ask you why you aren't paying teenagers $30/hr to make a latte
@Kevin-fn1rn my cousin did and she pays retail clothing employees $25/hr... she just doesn't take $200k/yr home.
@@Kevin-fn1rninstead you force your employees to rely on tips to get by. If you can't afford to pay your staff a decent wage then your company shouldn't exist.
@@roaldruss4211 you're delusional. People put up their own money and risk going under to start small businesses, you can't just mandate arbitrary wages be paid
@@Kevin-fn1rnyou're just out of touch. Who are you to demand that the customer subsidize your workforce?
My Strategy was: Community college + grow into adulting while working part time and living at home --> transfer to a university when you know what to specialize in .
Get into the best college that I can afford.
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
I'm glad you made this video it reminds me of my transformation from a nobody to good home, $34k monthly and a good daughter full of love
My advice to everyone is that saving is great but investment is the key to be successful imagine investing $15,000 and received $472,700.
Unfortunately, not all of us were financially literate early. I was 35 when I finally educated myself and started taking steps. I went from $176,000 in debt with zero savings or retirement to now, 2 years later, fully debt-free and over $1000,000 net worth. I know that doesn't SOUND like a lot, but I'm incredibly proud of it. Now I'm fast-tracking my wealth building (investing $400,000 annually) and don't owe a dime to anyone. It's a good feeling!
wow this awesome I'm 47 and have been looking for ways to be successful, please how??
People are ignorant of profitablity in bitcoin investment and that has been the major issues limiting their expectations.
Making touch with financial advisors like Elizabeth Regina Nelson who can assist you restructure your portfolio, would be a very creative option. Personal financial management will be crucial to navigating the next difficult times
Oh Ramit. Those words that you called random aren't actually random at all! Hansel and Gretel are people who almost died because of their dream house, and Rapunzel is someone that's stuck in their housing situation. All very relevant to this topic.
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
Ok, who is only paing $2k a month for rent, utilities, food, & real necessities?
I was getting hopeful that Ramit was finally getting on board with reality, but then he said that! More like $2,500 + transportation in Texas for single person in modest but safe apt.
Housemate? Where are they supposed to sleep, on the couch?
I’m paying less than that but I struggled for a while just to get there. I’m Gen X (52), completely debt free (mortgage included) with Dave Ramsey teachings and live frugally. I’ll retire in 2027 when the last one goes off to college ( which is funded already for her). My other 2 kids are grown and debt free as well and doing very well ( I thank God everyday that they listened to me and they watched me get debt free too) It wasn’t easy but you just have to start where you are and be consistent and intentional.. I realize that what I’ve accomplished is not normal so don’t be normal either. Wishing you the best
@@Nisa-gm5wg Major congrats & may God bless you! Ramit was referring to the younger people renting who need to save for emergency fund to meet basic needs.
Location matters plays the biggest role. I’m in a Fort Worth suburb paying $1184 rent in a gated diverse community with zero safety issues. When I moved in 2021 it was $965. However they have added a ton of mandatory monthly fees over the years which adds up. Car insurance has been the next most ridiculous issue for me.
@chrisandtimothy yeah, what Ramit misses a lot, and this has been going on for at least a decade, landlord's will force you to have renters insurance they will bill you the water even though you have no separate water meter, they even divvy up the garbage cost among all of the tenants. These are things that they used to just quietly build into the rent. I couldn't believe it when I started seeing that! Half of what they do is not even legal, but Texas is a state for landlords not renters!
Yep insurance had a State wide increase again recently it is a painful one! It may have even been the nation wide increase
We need these storms to stop!
@@ang8925 I know it was for the younger generation. I just wanted to encourage the young folks to start now. Let your young self take care of the old you in the future. I was young when I got started (2003 went to a Dave Ramsey conference). That was my beginning. I like Ramit as well. I just found him about a year ago. Thanks for responding
I think choosing the right major is much more complicated than ever before. Not everyone needs to be an engineer, or a doctor etc. we gotta start paying and treating all careers better across the board because not everyone can do and be in these careers.
Historically, the careers that are the hardest pay the most. Someone who does an "easy" or a more replicatable career will be paid less. That's just how it work.
As someone with a "good" career (I do embedded software, I have a MSc in CS), it's not as easy as pick a good major and it's fine. The job market shifts ( thousands of my engineering coworkers have been laid off), and the prospects for advancement are always limited.
It's paid for my life pretty well, but it's not an unlimited job market, and other work needs to be done that is underpaid.
Exactly… We need good people in all fields.
As George Carlin said, "It's the American Dream, because you have to be asleep to believe it."
I think saying American's aren't living paycheck to paycheck, is a privileged point of view. I might agree with you in the literal sense that maybe their entire money isn't gone once bills are paid. but what's left after the bills is barely enough to survive through the month. It will be difficult to convince the people who are experiencing this that it isn't happening to them.
I agree with the difficulties of convincing someone like me of this. The whole working for less than what rent would cost me if I didn't have two roommates for this two bedroom house is pretty devastating. However after enough time I have been convinced and am now trying to use what little I have extra to save up for some electrician classes in the hope I can increase my meager income. I'm about half way there, and switching from paying my full Netflix to only paying my coworkers difference in how much it went up along with giving up my Spotify being ad free along with some straight up mooching food from some friends to cut back on my food expenses is how I'm saving the difference.
Same here. I still have money left over after all is paid but I only have a 1-2 months emergency funds saved up before I’m screwed. Working a full time job and paying out of pocket for community college full time. No one else to rely on but myself. I will say I feel more comfortable today than I did last year, a $2 raise and a $1200 bonus Christmas saved my entire financial situation.
Yall miss the most important point of Ramit’s video. He agrees the system is stacked against you. He actually volunteers, votes, and works to improve the lives of the working class. But he doesn’t want to see so many people sit and complain. He is trying to give everyone a path out. His whole purpose is to HELP, not to give you click bait videos to cry about the state of the economy together.
@@robertmontgomery8107 I don’t disagree with your statement. I think two things can be true at once. I just finished Ramit’s book last month and have finally become financially literate thanks to him. He is an amazing person.
@@robertmontgomery8107He’s out of touch with the finances of average people. Look at his podcast. Usually wealthy people that are just cheap or who live beyond their means. He doesn’t even understand that net worth for your average American is tied up in their primary residence. Good luck buying groceries with your home equity.
We often need to be reminded more than taught I appreciate hearing this again
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
American dream I think of: having a family, nice stable job, owning a home, & raising kids. Job in the only one I have but adding a new item to dream, building the investment accounts towards comfortable retirement planning.
Writing down your daily expenses in a notepad helps a whole lot.
Paying with cash you feel the money leaving you.
Swiping a card is easiest on the mind. But if you write it down you feel each number.
I have a property zoned for a triplex but the city won't allow me to develop it, they made an excuse about the neighborhood's green house emissions, and population density. I offered the units for low income housing and that really slammed the door shut.
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
We were lucky to own the first house in 2011. We paid off in 2 yo and 1 m. We bought the 2nd house in 2019 before the pandemic because we realized the school scores in the first house wasn't great as well as we realized a 3-story house doesn't good fit for our retirement, obviously. If we're looking for a house right now, we would buy a small house in the different city or rent a very old apartment.
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
Have you ever considered doing a patreon with an additional couples interview every week? I’d pay for that. Eagerly await Tuesday ever week
Should I? Interesting idea
I’d pay for that. It’s my favorite
@@ramitsethiyes!! I don’t subscribe to any patreons but I would sub to that for sure.
I absolutely loved this video. Thank you!
One thing I’ve started thinking about recently is people who buy second homes as an investment. I wonder how many of them would consider taking a loan from the bank to invest in a REIT instead. I would suspect almost none although functionally these are both similar. All of this to say that I think most people don’t understand how leveraged they are when they buy a house with a mortgage.
I'm a single guy, I much prefer being able to rent a 1 BR while maxing my 401k, HSA & Roth IRA. Houses are for families. Also got my degree while working full time. Life is good.
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
I do agree with him that the American dream isn't dead, but its harder and very different from what the previous generation has to do, especially for anyone making under the US median income, or even the average income of their area. It's become 4 times harder, to be exact. This doesn't make it dead, but you will have to work much harder to "get" it.
Agreed 100%
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
9:00 flawed thinking. 193k net worth could be illiquid. For example, most wealth held by the bottom 50% is from equity on their home.
Yes, which is exactly why, for the last 20 years, I've been telling people to run the numbers on the biggest purchase of their life
My thinking as well. My net worth is close to there, but I still live check to check. I’m not cashing that out - it’s invested ..
Dual income as the average household had increased competition in all areas including pushed housing prices up. It also means that birth rates are down as couples want to keep having (at least) an average middle class lifestyle. Single people are toast in this reality and single parents are even further behind.
Birth rates are a lot down due to infertility. It's up to 15% of couples now. Money plays a part because people are waiting but as someone who straight up couldn't have kids your comment is a little triggering.
@@101289teutonicguy If you are triggered by facts then you have a difficult life ahead of you. People are choosing lifestyle over having children because without the double income they fall further than they are willing to accept. It is happening all over the western world.
Thank you. We have been doing this for years. I retired after 30 years with the military. We still invest part of the pension. Everything is automated, but we tell our college grad daughter: invest in your pension, invest in a brokerage and high yield account, keep credit card below 20% and pay off monthly. She is told to allocate money for car maintenance, repairs, and a replacement vehicle. She makes below $30K now, but that is temporary. We are here to foster guidance and make suggestions. Living has been difficult for many people for various reasons. High cost of location, medical bills and student loans have gotten out of control. Wages have not kept up with the increase, but they must initiate a plan. It may take years, but it must be done.
Net worth for most Americans is tied up in real estate. Illiquid cash doesn’t prevent people from living paycheck to paycheck.
Illiquid wealth is still real wealth (though I personally think it's a poor way to accumulate wealth due, in part, to its illiquidity). Nonetheless, it's real, as is the balance in Americans' cash accounts.
Sadly yes, the American Dream is dead.
Dusty Rhodes passed away in 2015.
And today the American Nightmare is running rampage
Time to rewire old money limiting beliefs! ☘️ 💪
I completely agree with automation (I'm 70 yrs old) even back in the day of the 1970's you could auto-draft money from your checking account into different places. My choice was the Franklin Utilities Fund where every month a stated amount went straight to buying shares. Month after month turned into year after year then decade after decade. Fast forward to today I no longer am buying I'm having the mutual fund send me a check every month.
AUTOMATION WORKS!
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
A fast food job is a starter position and isn’t meant to be a career. When I was in one I had 2 Roommates and split the bills while going to college. Worked nights and weekends while studying all day. It’s doable. Also, started at community college to cut the costs those first years and owned small used cars.
I like Ramit’s videos but sometimes I think he shouts too much when trying to make a point
We have reached an unsustained point of imbalance at this time in history...
Ramit, when you look at the cost of housing only through the lens of the multiple of salary to price, you miss part of the equation. This only tells the whole story when buying the home for cash, which most people don’t. You also have to factor in the cost of capital. That’s why in the early 80s, even though the multiple was 3-4x, home affordability was still very difficult. Mortgage rates in the high teens meant affording the average home on the average salary took well above 40% of that salary. Similar to where we are today. Not saying things aren’t hard today, just not unprecedented.
Now, I totally agree with you that strategic under building and NIMBYISM have exacerbated today’s challenges. But, WFH has opened up more opportunities to live in affordable areas than ever before.
XAI61Q is still extremely undervalued
Ok. One credit in Lansing community college in the 80s would cost $20 for residents and $35 for out of state and international students. $20! One hour of work was like $3. So, you had to work a full day to buy one credit. So, most students would take 3 to 4 classes. That’s 12- 16. Some classes were worth 5. Credits. I think you could take less credits for trimester but international students were obligated to take at least 12 or more (3 classes of 4 credits each) credits. So, one trimester (12 weeks) would cost up to 16 days of work. 12 credits would cost 12 days of work. So, how many hours work would cost to pay one credit today? Oh, I almost forgot, one credit at Southern Illinois University at Carbondale would cost $100 per credit. 5 times more than a community college.
I got my start at LCC then went on to law school. I live in Dallas now and the Dallas community college system offers residents a lower tuition price made possible by property taxes. which I am happy to pay.
Idk where LCC costs are today but I imagine they are still lower than MSU or U of M, for example. Community college can be a good option for those who don't want debt or too much debt, would like to go into a trade, or haven't settled on a particular path.
Also, it is a great way to get your feet wet before going to university. But I wanted to pay less for basic classes and get a Media technology degree. Communication. How to operate cameras, switches as technical directors, lighting, audio mixing, microphones. Etc. then moved to SIU. SIU accepted most credits but not all. So it is good to check what the university is willing to take. I knew lots of people going to LCC before going into Law School.
Now today, we can take classes for editing videos, after effects and photoshop. Get good at it. Then start applying for those jobs. And not spend 4 years at a university.
But if your goal is to be a CEO. Maybe have a BS in accounting? And a master. But hey! If you are Steve Jobs, Bill gates or you are Zuckerberg. You don’t need one.
I'm not going to lie; my favorite part is when you get frustrated and ask some really important questions at 10:37 in the video. I am a Canadian mortgage broker, and while our housing and rental markets and costs are definitely different from those in the U.S., we face similar issues with people jumping into homeownership without fully understanding how mortgages work and the additional costs involved. I don't understand why financial literacy isn't taught in schools but thankfully, there are channels like yours that provide this education.
I'm in Canada and my kids learned a lot about finances in school. But spending is mostly emotional and that isn't and shouldn't be taught in schools
@@laundrygoddess4 What part of Canada are you in? I know that in Ontario, they are implementing some education on finance, but in BC, especially in the smaller cities and centers, there isn't really anything for it in the system. :(
That said, I'm so happy to hear it is being implemented! I have a one year, so I am still waiting for direct interaction with the school system. All I know is what I have heard from people and clients with kids in school.
Ramit: "Housing is more expensive than ever" Also Ramit: "Americans aren't living to paycheck, look at the value of their houses and how it's driving their net worth!"
Yes, that's correct. Do you see how both can be true?
@@ramitsethi Yes, I do. Do you see how net worth has nothing to do with cash flow? It's entirely possible to grow your net worth while saving $0 if your house has appreciated. Correlation Causation.
“The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.”
@@danepinneyPay check to paycheck implies there is no viable solution for you. If your house is killing your bank account, you can’t afford it. Downsize or rent. Or run the numbers, stay in it, and just don’t do anything else. The paycheck to paycheck conversation has to be prefaced with the fact that you do not in fact have to own a house to live a good and decent life.
@@ramitsethi But Ramit, you rant against home ownership, then state Americans are in great shape because the median net worth is nearly $200K, but do not acknowledge that most of that worth is equity in the home they own! High Irony!
Most Americans just do not have a significant amount of money in the stock market. The top 10% of Americans held 93% of all stocks, the highest level ever recorded. Meanwhile, the bottom 50% of Americans held just 1% of all stocks in the third quarter of 2023. And remember, I'm not whining about my personal situation, our household has plenty. But you have got to acknowledge that you self contradict in your argument that Americans are in better shape than the actual stats suggest. No, we are not! Especially fresh college grads.
American are trained to become consumers. This consumption leaves them with minimal wealth. Does this apply to everyone? Absolutely not. I know when i go through my friends finances to help I cut 100s from the money spent and convert to investments.
I think this ignores how much a large portion of Americans don’t make enough money to keep up with everything. I can’t save my way to my goals when my income isn’t there compared to other peers. And I’m a teacher - we can’t tell all the teachers to leave and get better jobs.
The saving advice is great though. Just disheartening for those like me feeling incredibly stuck.
He doesn't ignore it. There are plenty of sources talking about how bad it is and complaining about the state of the economy. He is focused on trying to provide solutions, tricks, and tips to slowly claw your way out. He personally votes, volunteers, and advocates for policies to fix the economy. He is doing his best to give solutions, not to just complain.
I know this. Ramit is a great guy. I’ve seen everything he’s been advocating for and it’s greatly appreciated. I’m just pointing out, in this video, I think a little tangent of how inequitable salaries are becoming for those in different careers would be a good side bar conversation. Because, to me, yes the American dream feels dead.
@@adamschroeder3898we can surely tell all teachers to leave and get better jobs.
they simple wouldnt do it.
and now let me play devils advocate:
why would i pay someone more if regardless of the pay, he choses to stay?
@@clonehunterz I don't know what you're trying to tell me here. In my comment, I meant that if all teachers left to get higher paying jobs, we wouldn't have teachers left. We can get into personal philosophies for the country, but I firmly believe public education should be a much higher priority than it is at the moment.
This isn't just about teachers. EMT's should be paid more. So many other professions are being forgotten and left behind in terms of pay scale.
To your devil's advocate comment, I don't know. I wish we lived in a more equitable world, and I was just lamenting in my previous comment.
@@adamschroeder3898 got you, i misunderstood a bit my bad.
From an immigrant standpoint, I personally think we are all privileged to live and breathe in this country. Most of the basic things and necessities are offered sometimes free or cheap you just need to look around. Rent or buy what you can only afford. Food, household items, etc there are coupons you can use if you are diligent to look around. You have lots of opportunities to work for a part time job, sidelines, or overtime. Internet sites that allows you save and earn cash backs or discounts. I think people can save if we live according to our means. The American dream not relatively dead but harder to reach these days.
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
In housing terms, the US is just catching up with the other perpetually expensive real estate markets in the world like UK, Korea & Canada which became unafforable in the 2000s and have never corrected properly. It's unlikely to get better and will only increase the gap between rich and poor in the future.
This could be true. If so, it will be a very dark future for anyone but the wealthy. This is why I'm politically active and constantly remind people to vote for politicians who build more housing
At 13 mins on is amazing! I do this, and I recently helped my son to set up his this way as well, with all Capital One accounts. The only difference for us, is that we have everything feed from our main big savings account, instead of the checking account. That way if I fall into a coma, all my bills will be paid, without a paycheck, until my savings are gone. Currently I could go 10 months until savings ran out with no additional paycheck coming in.
I’m feeling like my whole region is gonna be screwed over by mass government layoffs and I’m gonna have to sell the house I just bought and leave the area.
Tuition started to increase shortly after Pell Grants and student loans became a more prevalent thing.
Watching from Edinburgh, Scotland. Price to rent a 2bed flat£1200/pcm, our mortgage on a 3bed end terrace house£1000/pcm.
Edinburgh being that close in price to Greater London is quite a shock tbh. Not the impression created at all.
I just wanted to jump in and say...oooh I'll be in Edinburgh in May :-)
Bit deceiving since you didn't mention area . Where's the flat and where's the 3 bed?
Pretty much same street/area. Point I was making that there is no saving while renting.
I believe setting fixed expenses on autopay is fine, but anything with variable costs should still be manual. How do you know if your credit card bill is correct if you don't even look at it
When it comes to post high school education the college degree lifetime earnings has been overblown in order to bring in more students. These lifetime numbers need to be viewed very carefully and yes I agree with the video presenter your major will speak volumes as to dollars earned.
Many folks in the trades have done very well and those with ambition have out performed many of their college degreed peers. It simply depends on the industry of choice.
Why cars are all luxury is because the deals make 4% profit on every sale.
Ramit - you are 100% correct that NIMBYism is a huge problem that has resulted in high housing costs. Spot on there.
However, you never talk about rent control (at least that I have found, and I listen to nearly all your content). Rent control is a form of NIMBYism. And nearly every study out there shows that it results in creating more barriers to housing supply. Why don’t you talk about this?
Too complicated for the average person, who still believes that housing prices only go up, buying is always better, renting is for losers, and the stock market is gambling.
@@ramitsethithere really isn’t anything complicated about it. NIMBYism is bad because it discourages new housing from being built. Rent control does the same. The point is to build more housing, as you rightfully point out. That is why rent control is bad. I don’t know why you don’t discuss this.
Yeah for sure. I can’t afford to leave my parents home. I make 1800 to 3000 a week depending on overtime. Take home is 1000-1700 a week after taxes. I get taxed so much I can’t live on my own and start a family. It’s insane. I spend about $600 a month on gas cuz I commute and $100 on an oil change so it cost me $700 a month just to get to work. So the months that I only take home 4k I would be screwed if I had a 2k rent payment. I can’t buy a home cuz 20% is 100k on every decent home. Then after that the mortgage is still 3k a month.
This is so true, we are in Canada and it’s the same for houses and college, my oldest is 18 and he doesn’t want to go to college but I don’t really know what the right decision is, I mean making minimum wage for even a few years is probably going to be draining???
It will be even worse going to college taking out a whole bunch of student loans that will take years to pay back. If you don’t have a 529 plan then him starting at minimum wage and living at home until 30 even if he has a degree shouldn’t be too bad cause life is expensive
8 years ago, I read I will teach you to be rich. Last year i became debt free. Today i have 300K in investments. Planning on 1 mil by age 40.
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
So, 20 x 60 credits =$1,200 - 100 x 120 = $12,000. Assuming you don’t want to pay other fees like the gym. I didn’t like to pay those extra fee some colleges ask. Back then anyways.
I find the housing cost vs income ratio overly simplistic. At an income of 20k per year it’s only reasonable to re able to save 2-5k per year meaning an 80k house is 16-20 times savings rate. With an 80k income it’s reasonable to be able to save 20-30k per year meaning you could afford a 350k-600k house at the same savings rate
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
The presenter stated he has made more money by renting and investing the difference over the past 20 years ago. Since he is a top notch investor during the housing crash he could have bought a house on the extreme cheap and as housing recovered then skyrocketed in price AND he would still have extra money to invest elsewhere.
So his past 20 years I don't agree HOWEVER TODAY I agree 100% that renting is cheaper than buying. It is simply a matter of valuations that tells you when to buy and when to sell no matter what asset category you are using!
I would be fun to know how much a «non-house buyer” pay in post mortgage rent compared to what the difference in mortgage vs rent invested in the years of down payment gives when living in a major city in the Us. For someone living in Europe it’s not possible to know what the levels of rent are in the Us.
No, it's not dead. But it's never been easy and it's not getting any easier. If you're trying to make it happen in a high cost of living area the deck is stacked against you. If you're trying to make it happen working an unskilled or semi-skilled job the deck is stacked against you. If you're going for a college degree that doesn't lead to good career options the deck is stacked against you. If you live beyond your means the deck is stacked against you. But if you take cost of living into account in your choice on where you live, make choices that lead to good careers whether that's college, the trades, being an entrepeneur, etc and live below your means building up investments for your future you've got an honest shot at it. It's still happening here where I live in the Midwest.
The housing situation is actually worse than what he illustrated. Household income included a lot of single income household, whereas now it is mostly dual income household. So one person could afford a home and now 2 persons can barely afford one!
He shows that line chart where income barely budges in 40 years while home prices quintuple all the while saying "ALL IS WELL! REMAIN CALM! THERE IS HOPE!!" Uh, no there is not unless you are a top 25%er who bought and invested years ago. Period. Full Stop.
Rent is due by the 5th. If I pay rent by the 7th since it's a fixed cost, I will be late
Why is the American dream thought to be a house? It is really financial independence. A house can be a piece, but it isn't a game changer. Rules changed: a house is bought with wealth, not to build it.
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
Everyone who reads this, we don't know each other and probably never will but I wish you all the best in life and all the luck in the world
There has never been any such thing as an American dream.
Political talking point, perhaps. But nothing more.
But the idea that every American has a shot at the brass ring, is nonsense.
I am comfortably retired and have no skin in that game. Just my opinion.
I’m here for YIMBY ramit
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
Personally, I ABSOLUTELY think the American Dream is dead and has been for some time. NO one can afford anything anymore, and it's only getting worse. Unless there is some MAJOR reform, I don't see how anything is going to get better. It's really, really sad. As for me, I don't really care for the American Dream crap. I've never wanted a family or an SO or kids, and I don't care to own a house (mostly after watching my parents struggle with it and watching/reading a lot of rent vs buy vids/articles/books, espec yours, Ramit). It doesn't affect me much at all. I DO wish, though, and HOPE and PRAY that the 40-hour work week and working ourselves to the bone and NEVER feeling like we can just LIVE gets gutted and sent packing in the years to come, preferably MUCH sooner than later! It's destroying so many of us, espec younger people, inside and out, and it NEEDS to STOP!
Thanks for sharing XAI61Q and SUI. 💯
With net worth statistic I wonder how much is that skew by house value. As you say over and over again a lot people buy houses without running the numbers and so someone’s home could be worth decent amount but they are drowning due to property taxes increases combined with insurance increases combined with marginal but noticeable food and gas increases combined utilities increase. All while their income went up a laughable 1% resulting in living paycheck to paycheck feeling not having income go as far as before
Definitely need to boycott these universities
The Australian dream is definately dead.
If you don't have a parent to help (which alot don't have due to broken homes) whether that's to let you live at home to save or by going guarantor on a home loan how is it possible?
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
Ramit for the 193k medium networth isn’t that including the house for most people?
Again, in reference to emergency fund to meet basic living expenses. Rent, food, real necessities. 3 years ago, I was chatting with the owner of an OG property management firm. He has been a real estate investor for over 40 years and manages properties All over Texas.
I said, it seems that a person cannot get by (barely afford the basics) on $40,000 a year.
His answer?
ABSOLUTELY NOT!
And remember, he sees the wages of all kinds of people,
My daughters student loan was over 90,000 four years ago😢
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
Sorry just to cut to the chase: life seemed easier in the past because people are drinking marketing material from that era without any of the attached reality while also remembering what it was like to have their parents do everything for them.
In another video somebody was complaining about their grocery bills in the comments and it turned out it was because they had fresh fish flown to them weekly and were upset how expensive it was. People are fucking delusional.This makes it hard to have conversations about these matters online because people just lie, bullshit, or don't even know basic facts about their own situation constantly.
I did a quick Google "research" on what amortization means... apparently I did know, I just didn't knooooow that I know 😂.
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
Did dude is a fool. Don’t listen to him. Rent will always go up, but your mortgage will always be the same. Plus, who says that you can’t invest while owning a home?
Have you ever run a buy vs. rent analysis in a VHCOL city? Or HCOL, or even MCOL city?
Ramit. You're correct that "Rent and Invest (the difference between what your rent is and what a mortgage in your city would be) is mathematically better"
Now please - find and show me people living in a major metro area who actually follow through the "and invest" portion of that strategy. If those people exist, they're not common.
All to say - you consistently undersell the "forced saving" benefit of a mortgage. Lastly - the same people who actually invest the difference would also pay off a mortgage and live with close to $0 for their housing expense for years.
Where you going with the amortisation point? That’s the innate function of a mortgage, so I’m kinda confused.
Almost nobody realizes they're paying more towards interest than principal (often, for 20 years). These are one of the ways that I show people how little they understand about housing and how much they need to understand
@@ramitsethiyes. I understood this. So, in order to game the system, you take out a loan way beneath what the banks tell you you can afford. Then, add extra payments to the principle for the first 10 years. Once the glide path switches, it's probably cheaper to put the extra mortgage payment back into the market. Currently, I am only paying $180 per month on my mortgage interest while my neighbors are paying $10-13k per yr.
@@ramitsethi oh I see what you mean. Thanks for clearing that up, Ramit.
I automated my money and things have never been easier. I save and invest as soon as I get paid. Then I can spend the rest!
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
The last word I would use to describe this guy is calm. He’s freaking out half the time, 😂 14:10
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
suburbs in Minnesota zoned out the lower middle class
Okay, I'll go for the pickles and not cheap out on that!
13X in Hugnary right now... if i move to the US i will have a better chance to buy a house there then if i stay here and try to do it
2:58 So in 1985, the price of a house was 3.57 times the median income. In 2023, the prices of a house was 5.29 times the median income. That's an 48% increase of the price relative to the income, not twice as much. I'd also argue that in the early 2000s, more houses were built than people could afford, leading to the 2008 crisis.
The real question is will 1.1 million be enough for someone to retire in 2066 (it’s not really enough now)
𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩✙⓵⓶⓵⓻⓶⓽⓽⓸⓽⓵⓵
ᵗᵉˡˡ ᵐᵃˣ ⁱ ʳᵉᶠᵉʳʳᵉᵈ ʸᵒᵘ ᵗᵒ ʰⁱᵐ ᶠᵒʳ ᵃ ᵇᵘˢⁱⁿᵉˢˢ ⁱⁿᵛᵉˢᵗᵐᵉⁿᵗ ᵗʰᵃᵗ ʷⁱˡˡ ᶜʰᵃⁿᵍᵉ ʸᵒᵘʳ ᶠⁱⁿᵃⁿᶜⁱᵃˡ ˡⁱᶠᵉ
It requires a lot of sacrifices. We have been packing lunches for 15 years, started off with $500 saved on a $2600 paycheck, then $1000 on a $4000 paycheck... No nails, no salon, no buying cool tech gadgets, switching our phones every 5-6 years. Drove cars 10+ yrs old. Buy a house way below what the banks let you borrow. Banks told us we could buy $450k, we bought a $320k house 8 years ago. Then, very aggressively invest all the extra money until it hurts! If it doesn't hurts, you haven't invest enough. No Starbucks no Target or TJ maxx runs. No Shein, Temu crap. My clothes are from ll bean and i wear them for 10 years
I like the idea of automating your payments every month on the same days. Unfortunately it doesn't work for me because I get paid every 2 weeks and the dates are always different every month. This cannot be changed as all employees of my level are on the same payroll schedule. Do you have any suggestions to remedy this?
Still. “Median net worth” at $192,900, is perhaps not something that should be used to illustrate how people are doing. Especially since there’s been a lot of talk of a very wide gap between the high earners and low wage earners. It’s not fair. Not to make a point, that maybe isn’t there. Dude. That’s a lot of money, and of 15 people I can immediately think of, not one is worth that. I’m just hoping that what you show us is real, not because of “gloom and doom”. For which you’re right, but because it’s also not rainbows and glitter.
It’s not just you just got to figure out how to make a lot of money. Our generation got screwed
Ramit's big problem is he thinks rentals will always be available at reasonable prices. Here in Australia people with decent jobs are living in tents as there aren't enough rentals to go around. People are getting kicked out by greedy landlords and there is no recourse. This advice will come back and haunt many people stuck in tents despite having good jobs and income. Never thought it would happen here, and it's only getting worse as we boost immigration. I'm good as I bought my 1st house at 21 and got rid of all debts 20 years ago, but most people are screwed, certainly those renting. If you rent you can never relax as you know you can be evicted next week and then have to line up with 100's of others at any listings. Terrible way to live. People owning homes are the upper class, rest are plebs.
Honestly you’re overstating it. You think rent in the US is cheap? For. Nice apartment it’s pretty much the same in the major cities. Can’t relax? Yeah, which is why you have to choose a good career and continue to progress, inflation is real. You can’t see it because as you say, you bought your house 21 years ago. The situation is entirely different. Ramit is just saying to run the numbers.
@@SwaeTech The people who know how to make money aren't producing youtube content, unless that is the way they make money. If you know how to make money you're not sharing it on youtube, makes no sense. Do what I do - treat it as entertainment. Even Ramit puts that qualifier in 'This is not financial advice' : )
That is why Ramit is a YIMBY who actively shares how housing is political and encourages people to vote for local politicians who will build more housing
Oh to be young and have all this information. Can I have a redo? 😩
I feel like you're basically making the exact same videos over and over
And people in the comments demonstrate they clearly still aren’t getting it. Are you trying to shit on the guy that is making positive, pro-help videos? What does that say about you?
For new subscribers who didn’t see it the first time … for a refresher … it’s nothing wrong with it
I think its a valid argument but definitely could be phrased in a nicer way. I think lately I’ve only learned something new once every 3 videos. I still enjoy it ofc but there are definitely lots of topics that haven’t been delved deeply compared to the books. Very excited about the new book 🎉 should give lots of great info
Repetition is key when training a new skill such as financial education. Just like the gym. Do your reps ;)
The message is not being received.... His videos are excellent if you do not like them skip them... I have an MBA with a focus on economics and accounting. I share his videos with those i am trying to help because of his delivery...
I have to say it feels like living in the United States with the way housing, food, and essentials inflation is right now while investing in index funds is just keeping up with the bare minimum. The American dream requires millions of net worth at this point.
I guess what I’m saying is people aren’t really getting ahead investing in index funds.
um, Ramit... the opening college numbers. 39k is not 1200% from 12k... what's up with the math? :)
Yes it's dead. Own equity, don't own a job.