Creating a strong financial future amid 'forever renting'; The latest interesting posts I've seen on X; I ran the Brooklyn Half Marathon on Saturday
1) Whether to rent or buy a home is one of toughest financial decisions most Americans have to make.
And if you're renting, that means making extra choices about how to build wealth.
In last week's e-mail about the rent-versus-buy decision, I wrote that:
Owning a home with a government-subsidized, fixed-rate, 30-year mortgage has been one main ways American families have built wealth over time.
So if you're one of the many people (like my sister, who I mentioned last week) who choose – or can only afford – to rent, you need to think about how to build wealth in other ways.
This article in the New York Times over the weekend has some good tips: Renting Forever and Trying to Create a Strong Financial Future. Excerpt:
[Michael] Rogers has found that people tend to focus on home equity over other factors. He thinks that can be a mistake.
"In the current market, particularly in my area [northeastern Tennessee], rent looks like an absolute bargain compared to what houses are selling for now," he said. "That allows me to really bump up my savings rate. People are like, 'Well, you're not building equity.' Yeah, but I've got a 35 percent savings rate. I'm building investment accounts much faster than I would ever build equity in the house"...
"If you choose to rent, there's one key thing that is the most important thing of all, which is you absolutely must run your numbers," he said, "and if it's cheaper to rent than to buy, you must invest the difference."
One way to make sure that you invest the difference is to have your employer automatically deduct money from your paycheck and put it directly into a retirement account that (again, automatically) invests it – my suggestion would be into an S&P 500 Index fund.
The article also addresses the guilt that many people (including my sister) feel. Folks often buy because their parents told them to do so (and their parents in turn heard it from their own parents!). That creates an extra emotional element to the rent-versus-buy decision.
But again, millions of Americans choose (or can only afford) to rent – and many invest the difference.
You shouldn't feel guilty for renting instead of buying... and you certainly aren't alone if you do so.
2) Social media platform X has plenty of insightful and interesting content... But it's also a cesspool of misinformation and manipulation.
So I've struck a happy compromise: I don't use it, but my analyst Kevin DeCamp follows a handful of accounts and sends me things he thinks I might find interesting. He has found a number of items recently that I wanted to share...
This chart posted by Barry Ritholtz of Ritholtz Wealth Management underscores the importance of ignoring short-term market fluctuations and holding for the long run:
And Creative Planning's Charlie Bilello posted this data point and chart – it's great news for American workers:
Meanwhile, CNBC's Carl Quintanilla shared another data point on the remarkably strong economy (keep in mind that consumer spending accounts for roughly 70% of U.S. GDP):
Considering the strength of the economy, I say, "What 'soft landing?' A landing first requires a decline"...
It's good to see the Federal Reserve's balance sheet trending downward – here's another post from Bilello on this:
And from financial-data firm FactSet, here's another data point that underscores what I've long been saying about inflation no longer being an issue:
And Quintanilla has one more data point on benign inflation:
Finally, on another note, I've been bullish on copper for years...
In fact, at my former firm Empire Financial Research, I recommended shares of copper miner Teck Resources (TECK) in our old Empire Stock Investor newsletter in September 2021. Since that monthly issue, it's up 130% versus 17% for the S&P 500 thanks to copper recently hitting an all-time high.
Take a look at this chart of copper prices from this post from Bilello:
3) After running in the 5K race at the Berkshire Hathaway (BRK-B) annual meeting two weeks ago, I ramped it up this past Saturday...
I ran the Brooklyn Half Marathon with more than 28,000 other people.
I finished in 1:46:33 (an 8:08-per-mile pace). That slightly beat my goal of 1:47:00, and it was good enough for top third of all men and the top 20% in my age group (men aged 55 to 59). Here I am at the starting line:
My strategy of running super light – no phone, waist pack, or shirt (just cranking dance music I'd downloaded to my Garmin watch) – paid off.
I felt good almost the entire race, until I really pushed it in the last mile and was really hurting (as you can see from the pictures I posted on Facebook here).
Here's a link to a 14-second video my coach took of me giving him a high-five at mile 6, and here's the Garmin report from my race.
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.