You said that Bach has a lot of common sense. Here’s common sense to you: if a big percentage of Americans bought their first house with no money down that should already be an alarm signal for everyone. Shouldn’t you exit the market when totally broke people with credit card debt start buying and flipping real estate.

There’s no such thing as free lunch. Now. Tomorrow. Ever. Let’s try to remember it the next time, ok?

Greetings,

A man who rents.

Well, now that we’re off to a great start to David Bach Day at Free Money Finance, I wanted to keep up the momentum by posting a three-part interview I had with David. The interview was conducted via email, though

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And it’s been all downhill from there.

He makes some leaps of logic to make his point, which may be true more often than not, but may encourage excessive risk taking in order to obtain real estate. He mixes up causation and correlation. For example, to say that renters will NEVER be wealthy is simply wrong. I have worked with people who have been renting the same place for years, and due to rent control, keep their cost of housing far lower than buying. Also, they are good savers. Homeownership or not, that is the key. Bach seems to agree with that in his first four or five books, but makes a dramatic change in this latest.

Here is an example of David’s misleading logic. While it is true that few wealthy Amerians are not homeowners, it is not true that all homeowners are wealthy. He makes howeownership sound as though it’s the ticket to wealth. Not for everyone.

Also, Bach states in the Yahoo article that “it’s never too late to catch the real estate wave.” His emphasis. I’m glad he wasn’t giving investing advice in early 2000.

I am not so sure that agree that renters cannot become wealthy anymore. I am starting to become convinced that may not be true. I actually put up a new post the other day discussing it: More Rent or Buy

I am now on my second house, so I guess I am obviously not totally convinced about this, but I think that there are way too many factors to say that buying is always better than renting.

-RS