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0 pointsdirtdobber1y ago0 comments

I have not heard of that poem, thanks for sharing!

With respect to education around money systems, I am referring more to (a) knowing that investing is necessary but insufficient and (b) understanding the main drivers (besides spending) of wealth loss: inflation and taxation.

It's hard (even for successful, intelligent people) to wrap their head around the fact that their $1m house that ballooned up to $2m over the last 25 years has in fact, lost value.

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PopAlongKid1y ago

>It's hard (even for successful, intelligent people) to wrap their head around the fact that their $1m house that ballooned up to $2m over the last 25 years has in fact, lost value.

Anything to back that up? I spent some time searching online and every source strongly disagrees with your assessment of house prices vs. inflation. And the tax argument also fails here, since two people who own a home can exclude half a million realized gain from tax altogether, or leave it entirely tax free to heirs.

dirtdobberOP1y ago

Not saying a home isn't a good investment. But on average, home prices have risen 4% y.o.y. in the US. Inflation target is 2% but is much closer to 4%. If you sell your house for $1m more than you bought it for, you can exclude 500K from capital gains, but you're still paying cap gains on the other 500K.

Bottom line: assume a 1% real profit y.o.y. on your home, then factor in closing costs (8%), and. then cap. gains on the profit. You didn't make as much as you think.

rufus_foreman1y ago

That was an excerpt, full poem is at https://bukowskiforum.com/threads/father-who-art-in-heaven.8....

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