A 47 year old lawyer should be able to afford $3,600 a month without particular difficulty. I’m a software developer so I make less than most lawyers do, but I can pay about $3,400 a month for my one-bedroom in the center of a big city.
(I don’t rent. $3,400 is my mortgage plus my building fees and the building charges an additional fee to people who rent out their unit, so if I rented mine out for $3,600 then I would probably actually lose money every month. Paying my mortgage does mean that my net worth increases, but it doesn’t help me afford things now. Someone with their mortgage paid off would be in a better position to be a landlord, but they would still be getting less than 4% profit per year even if they have the perfect tenant who never costs them anything. Selling the apartment and putting the money in the stock market would be more profitable than renting it out for $3,600.)
The average yearly return of the S&P 500 over the last 30 years is almost 10% a year, so if instead of investing in the stock market, you choose to be a landlord whose yearly profit is 4%, you’re a humanitarian donating 6% of the cost of your apartment to your tenant every year.
I’m exaggerating because the average rise in real estate values is 6% so such a landlord actually gets about the same return as he would get from the stock market, as long as he never has a bad tenant and doesn’t mind his money being locked up in real estate.
Well that was in the past, but over the last 2-3 years I have lost a few thousand $ in the value of my S&P 500 index fund investments. That money would have been better off in a plain old savings account or invested in real estate (but it wasn’t really enough to buy any real estate).
You must have bought at the worst possible time. But there’s risk associated with any investment - the neighborhood you buy in could go to hell, or if you rent out your property then you could get a tenant who trashes it and takes a year to evict. I think real estate does tend to be less risky than the stock market, but it has significantly worse returns too. (Plus, the stock market lets you diversify - if you only own one property and something happens to it, you have lost everything.)
With that said, you can invest in real estate even if you don’t have enough money to buy property yourself - you can buy shares in a real estate investment trust.
A 47 year old lawyer should be able to afford $3,600 a month without particular difficulty. I’m a software developer so I make less than most lawyers do, but I can pay about $3,400 a month for my one-bedroom in the center of a big city.
(I don’t rent. $3,400 is my mortgage plus my building fees and the building charges an additional fee to people who rent out their unit, so if I rented mine out for $3,600 then I would probably actually lose money every month. Paying my mortgage does mean that my net worth increases, but it doesn’t help me afford things now. Someone with their mortgage paid off would be in a better position to be a landlord, but they would still be getting less than 4% profit per year even if they have the perfect tenant who never costs them anything. Selling the apartment and putting the money in the stock market would be more profitable than renting it out for $3,600.)
Being a landlord might net you 4% but then you have to live with being a human parasite.
The average yearly return of the S&P 500 over the last 30 years is almost 10% a year, so if instead of investing in the stock market, you choose to be a landlord whose yearly profit is 4%, you’re a humanitarian donating 6% of the cost of your apartment to your tenant every year.
I’m exaggerating because the average rise in real estate values is 6% so such a landlord actually gets about the same return as he would get from the stock market, as long as he never has a bad tenant and doesn’t mind his money being locked up in real estate.
And maybe trying to wring as much money as possible from everyone is contributing to making our world unlivable (for us).
Well that was in the past, but over the last 2-3 years I have lost a few thousand $ in the value of my S&P 500 index fund investments. That money would have been better off in a plain old savings account or invested in real estate (but it wasn’t really enough to buy any real estate).
You must have bought at the worst possible time. But there’s risk associated with any investment - the neighborhood you buy in could go to hell, or if you rent out your property then you could get a tenant who trashes it and takes a year to evict. I think real estate does tend to be less risky than the stock market, but it has significantly worse returns too. (Plus, the stock market lets you diversify - if you only own one property and something happens to it, you have lost everything.)
With that said, you can invest in real estate even if you don’t have enough money to buy property yourself - you can buy shares in a real estate investment trust.