Owning Vs Renting

Which do you think is best? Renting a Home Vs. Owning a Home

Buying a home is part of the American Dream, though I consider it the American Nightmare, as I will discuss later. But I digress. Buying or renting is a significant decision that affects your financial health and lifestyle. Therefore, your choice depends entirely on your lifestyle and financial literacy.

Most of us have the lifestyle part down pat. We understand it perfectly, and that’s because your lifestyle typically comes with little to no effort. These are our habits, attitudes, tastes, standards, etc. Much of it comes from our parents, friends, and life experiences.

On the other hand, financial literacy is rarely discussed and, therefore, mostly misunderstood among the poor and middle classes. A stigma surrounds it; it’s private, the sort of thing you don’t speak about publicly. However, in its simplest form, there are only two straightforward terms you must become familiar with to be financially literate. These are Assets and Liabilities. Once you understand these terms, the decision to rent or buy will become apparent.

What are Assets? An asset is anything that puts money into your pocket. You want to increase assets.

What are Liabilities? A liability is anything that takes money out of your pocket. You want to minimize liabilities.

Most people do not understand these two terms and how to apply them to real-life scenarios. However, these are essential if you are to grow your wealth. The good news is that once you understand these simple terms and how to apply them to your everyday lives, you will be well on your way to financial freedom.

NOTE: I recommend reading Robert T. Kiyosaki’s bestseller Rich Dad Poor Dad if you have not.

While it’s true that renting and buying both take money out of your pocket. Renting a property doesn’t come with all the financial responsibilities associated with homeownership, and you have more flexibility as you aren’t necessarily tied down to your property. To most people owning a home is an asset, but that’s furthest from the truth because it comes at a never-ending cost until you sell it. It’s genuinely an oxymoron if you understand the most simplistic differences between an asset and a liability.

I will highlight some critical differences between renting and buying in this video.

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