Things have really been settling in. Even as a kid, this is what I saw what economics are like. Make something? Have a service? Sell it. Sure, there’s some rules to not step over for certain labor or environmental reasons, but that’s okay because only the dishonest would forgo those rules.
But no, that philosophy is…alien here. All based on speculation, even the whole “american dream” propaganda of homeownership emphasizes that real estate is “the perfect investment” to “build wealth”…even though that wealth you build is built on the backs of future generations.
Land value is built on the backs of current generations, especially renters. Even single home owners who do not own rental properties gain property value on the backs of renters in their community. Renters pay the same local taxes, taxes pay for local services and infrastructure, local services and infrastructure increases land values. All land owners see a return on their tax liabilities expressed through land value while renters see none.
The whole homeownership as wealth building never made sense to me. I mean I don’t pay rent, sure, there’s less of a leech thing going on so maybe I get get more money. But how is it an investment? It’s not like my singular house rises in price and everyone else’s doesn’t. Great, my house is now, in the twilight years of my life, worth 900% more than what I bought it for. I can now sell it, have 900% profit, then immediatly spend all that 900% profit on buying some other dwelling that also rose 900% in price
If I inherited 1,000,000 dollars cash, let’s say after taxes and assuming I didn’t inherit the money through a trust or some other tax evasion scheme, in 2010, that purchasing power today is worth roughly 70%. A million dollar house would be worth significantly more over time just from rising property values, and in addition, really the major component, is that there are inheritance laws that favor passing on property as a way of creating generational wealth.
It’s sold as wealth building in the same way they sell the idea of investing. “You too can become petty capitalists.” But I think you’re absolutely right. And like in the case of my parents, they were priced out of their house from rising taxes before having the ability to transfer that wealth to their kids
Things have really been settling in. Even as a kid, this is what I saw what economics are like. Make something? Have a service? Sell it. Sure, there’s some rules to not step over for certain labor or environmental reasons, but that’s okay because only the dishonest would forgo those rules.
But no, that philosophy is…alien here. All based on speculation, even the whole “american dream” propaganda of homeownership emphasizes that real estate is “the perfect investment” to “build wealth”…even though that wealth you build is built on the backs of future generations.
Land value is built on the backs of current generations, especially renters. Even single home owners who do not own rental properties gain property value on the backs of renters in their community. Renters pay the same local taxes, taxes pay for local services and infrastructure, local services and infrastructure increases land values. All land owners see a return on their tax liabilities expressed through land value while renters see none.
The whole homeownership as wealth building never made sense to me. I mean I don’t pay rent, sure, there’s less of a leech thing going on so maybe I get get more money. But how is it an investment? It’s not like my singular house rises in price and everyone else’s doesn’t. Great, my house is now, in the twilight years of my life, worth 900% more than what I bought it for. I can now sell it, have 900% profit, then immediatly spend all that 900% profit on buying some other dwelling that also rose 900% in price
Inheritance.
If I inherited 1,000,000 dollars cash, let’s say after taxes and assuming I didn’t inherit the money through a trust or some other tax evasion scheme, in 2010, that purchasing power today is worth roughly 70%. A million dollar house would be worth significantly more over time just from rising property values, and in addition, really the major component, is that there are inheritance laws that favor passing on property as a way of creating generational wealth.
Yeah but home ownership is sold as wealth building to the home owners isn’t it? I can’t spend money while I’m dead
It’s sold as wealth building in the same way they sell the idea of investing. “You too can become petty capitalists.” But I think you’re absolutely right. And like in the case of my parents, they were priced out of their house from rising taxes before having the ability to transfer that wealth to their kids