Not every person who owns a house is it necessarily mean that they can afford that house.
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Ep 113The biggest reason people fall into trouble: buying the house for the next 50 yearsRabbi Eliezer Gewirtzman
▶0:51
The biggest reason people fall into trouble: buying the house for the next 50 years
Ep 11399% of money fights between spouses are just two valid opinionsRabbi Eliezer Gewirtzman
▶1:23
99% of money fights between spouses are just two valid opinions
Ep 113Before you invest, ask one question: why me and not the big boys?Rabbi Eliezer Gewirtzman
▶1:24
Before you invest, ask one question: why me and not the big boys?
Ep 113$500 a month short for three years puts you $20,000 in debtRabbi Eliezer Gewirtzman
▶0:50
$500 a month short for three years puts you $20,000 in debt
Ep 113"You built it so I should see it, so I'm telling you how to do it"Rabbi Eliezer Gewirtzman
▶0:59
"You built it so I should see it, so I'm telling you how to do it"
Ep 113In your 20s everyone's watching, at 40 you stop caring, at 60 you realize they never lookedRabbi Eliezer Gewirtzman
▶1:15
In your 20s everyone's watching, at 40 you stop caring, at 60 you realize they never looked
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Quotes
“If they're in the business of lending money at 24% and they don't want to do it, why would you?”
Rabbi Eliezer Gewirtzman (to a young man asked to put his rich uncle's business spending on his own credit card)
“That tells me that he has a lot of debt, but how do you know that he's rich?”
Rabbi Eliezer Gewirtzman (on judging wealth by houses and cars)
“It's not about the street, it's about yourself.”
Rabbi Eliezer Gewirtzman
“You hit 60 and you realize they were never looking.”
Rabbi Eliezer Gewirtzman
“If you fall $500 a month for three years behind, you're $20,000 in debt. Now, $500 a month is the difference between a taking a tutoring job and not taking a tutoring job.”
Rabbi Eliezer Gewirtzman
“First question you want to ask, why me? Why not the big boys?”
Rabbi Eliezer Gewirtzman
“If you're building a house that's 500 square feet bigger than the next biggest house in the neighborhood, it's only going to last for so long and eventually you're going to be miserable.”
Rabbi Eliezer Gewirtzman
Takeaways
1 Many people who seem to afford big houses are carrying debt. A house and cars show spending, not wealth.
2 Falling $1,500 a month short on a $6,000 mortgage puts a family about $18,000 in debt in a year and $36,000 in two. At that point, he says, they're 'unhelpable.'
3 He treats a home as a limited exception: within reason, a family may need to stretch a little to buy one. Cars, vacations and luxuries must fit the budget 100%.
4 The biggest mistake he sees is buying the house for the next 50 years (room for every married child at Pesach) instead of what the family needs now.
5 Example: a roughly $650,000 house in Jackson with $300,000 down leaves a $350,000 mortgage. A $1.3 million house leaves $900,000, plus much higher taxes.
6 New neighborhoods can pay off, but some don't make it. Moving far for a pool or a bigger house is different from moving because you can't find a place to rent.
7 $20,000 of credit card debt at 24% costs about $5,000 a year in interest. One person found that saving half his $50,000 of discretionary spending over five years would have bought him a house.
8 Deals offered around the community are often ones the big players already passed on, like COVID-test deals pitched with a home equity line after the big investors pulled out.
9 The people who lost money on a deal rarely talk about it. You hear from the one who made money, not the 95 who didn't.
10 Living for what others think makes people miserable. He tries to 'live for myself' and not care what the neighbor does, while still meeting children's real social needs.