> "Debt is only an insecurity if your income is insecure."
For the vast majority of the population, income is insecure. I think that's part of what the author is getting at: by adding debt insecurity, one disproportionately seeks to make their income more secure.
i.e., Taking less risks, doing less things, and generally trying desperately not to rock the boat, and being less happy as a result.
> "A renter with a long term lease holds just as much obligation as a home owner as far as that goes."
I'm not aware of any rentals with 25-year leases. Most leases I've ever signed have been 12-18 months. Also, the mortgage payment on an equivalent place is, in my experience, >2x the rent. I can lose my job right now and pay off the rest of my lease without breaking a sweat. Heck, if you're really paranoid about it you can insure yourself against it.
On the same income, all other expenses be equal, etc etc, a renter has a lot more free cash flow than a guy paying a mortgage. Not only that, he can pivot much more easily, since his obligations are dramatically much more short-term. It's both easier to build the rainy day fund to pay the rest of his lease off and he's able to cut down his costs much more quickly than, say, trying to sell off your house that you can no longer afford.
This translates into real-life in major ways. People who are mobile, have few obligations have much more firepower at any negotiation table. When you can walk away to a better gig in another city and have your bags packed in 3 days, you can extract much better results.
Which isn't to say renting/avoidance of long-term obligations is always a good idea, but IMHO it's a very good idea while young. Your income curve will be steeper due to your ability to negotiate, and you will have much more freedom to find the life you're looking for.
> "the mortgage payment on an equivalent place is, in my experience, >2x the rent"
People buy rentals in order to generate positive long-term cash flow. In a sane housing market, rent will be only slightly less than mortgage + taxes + insurance in the short term, and rent will rise with inflation while mortgage payments stay fixed. Thus, after a few years, rentals bought in a sane market will generate positive cash flow; otherwise it would be foolish to buy a rental property. (If you compare the historical price-to-rent ratio in most cities [0] with the expectation of price-to-PITI of 14 [1], you'll find that renting is indeed slightly cheaper over the short term, but only by about 20%, not 100%.)
In the situation you described, where mortgage is >2x equivalent rent, that's a sign you're in a bubble market. In such a market, it's a terrible idea to buy. (IIRC you're in Seattle, which is almost twice as bubblicious as the national average. It has been a terrible idea to buy in Seattle [2] for most of the last decade.)
> "all other expenses be equal, etc etc, a renter has a lot more free cash flow than a guy paying a mortgage"
If the guy with the mortgage bought in Seattle between 2003 and 2009, he's going to have poor cash flow, but that's not a criticism of buying in general, it's a criticism of buying at a bad price. In a normal market, the renter should have more free cash flow over the first few years, and the buyer should have more free cash flow starting about 5-10 years in.
> " In a normal market, the renter should have more free cash flow over the first few years, and the buyer should have more free cash flow starting about 5-10 years in."
Agreed, except that AFAIK there hasn't been such a market in the US for years, if not decades, in any major city. Heck, I come from Canada where I know some people also buying their first home - housing up there in any major city is also as bubblicious as it is here, to varying degrees.
In just about any major city I've looked at, renting is massively cheaper than buying, which after the housing crash is very puzzling.
The "normal market" I described existed in most mid-sized and large US cities up until about 2002. There are a couple special cities like New York, where the "normal market" hasn't existed for a long time; one might conclude that the rent-vs-buy calculations are being done on a multigenerational basis.
Renting is still quite a bit cheaper than buying in many regions. This is because the crash isn't done yet. Give it another 3-5 years.
For the vast majority of the population, income is insecure. I think that's part of what the author is getting at: by adding debt insecurity, one disproportionately seeks to make their income more secure.
i.e., Taking less risks, doing less things, and generally trying desperately not to rock the boat, and being less happy as a result.
> "A renter with a long term lease holds just as much obligation as a home owner as far as that goes."
I'm not aware of any rentals with 25-year leases. Most leases I've ever signed have been 12-18 months. Also, the mortgage payment on an equivalent place is, in my experience, >2x the rent. I can lose my job right now and pay off the rest of my lease without breaking a sweat. Heck, if you're really paranoid about it you can insure yourself against it.
On the same income, all other expenses be equal, etc etc, a renter has a lot more free cash flow than a guy paying a mortgage. Not only that, he can pivot much more easily, since his obligations are dramatically much more short-term. It's both easier to build the rainy day fund to pay the rest of his lease off and he's able to cut down his costs much more quickly than, say, trying to sell off your house that you can no longer afford.
This translates into real-life in major ways. People who are mobile, have few obligations have much more firepower at any negotiation table. When you can walk away to a better gig in another city and have your bags packed in 3 days, you can extract much better results.
Which isn't to say renting/avoidance of long-term obligations is always a good idea, but IMHO it's a very good idea while young. Your income curve will be steeper due to your ability to negotiate, and you will have much more freedom to find the life you're looking for.