Article on Home Ownership: The American Myth

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Home Ownership: The American Myth

How can you save hundreds of thousands of dollars (after-tax) over a 30-year period?
If you currently rent, and you don't "really" want to own, wouldn't you like a good reason not to purchase?
If you could save a lot of money renting and could continue to fill out the 1040EZ tax form, why own?
If you currently rent, don't you wonder if you should own?
When is the right time to own a home?
Why Own? Especially when you can save money renting!
Home Ownership: The American Myth will help the reader answer these questions for their personal situation!

Introduction

Would you believe that you could save over $50,000 in 3 years by renting and saving instead of purchasing a home? It is true. In Silicon Valley (where housing prices are very high), this opportunity is passed by many unknowing home purchasers every day. In other areas of the country, the savings may not be as high, but it is still possible to save tens of thousands of dollars over a short period of time.

The key to saving this "large amount" of money, is to take the cash that would otherwise be put into a home and save it. Generally, folks feel comfortable spending up to 1/3 of their gross income on home expenses: mortgage payment, additional insurance, additional utilities and home maintenance. This expenditure is justified with the statement that the home purchase is a "safe" investment. Over the long-term, a home purchase has proven to be a safe investment. However, in times of economic turmoil, over the short-term, a home purchase is not necessarily a safe investment. This has been seen in many areas of the country. Housing prices in Texas during the early 80's and in Massachusetts in the late 80's illustrate this point.

Would you believe that you could save over $50,000 in 3 years by renting and saving instead of purchasing a home?

An investment much safer than buying a home and hoping that housing prices rise, is to rent and save the amount of money that would otherwise be spent on a home. If someone is willing to spend up to 1/3 of their gross income on a home, why wouldn't they save the equivalent amount of money in a "safe" bank account (or other investment vehicle)? The simple answer is that it is not part of our culture to save a significant amount of our income. The solution, educate people and help change their cultural attitudes toward home ownership, renting and saving money.

Myth Breakers

Myth Breakers is a company chartered with analyzing the current myths in society and documenting misconceptions, where appropriate. They have analyzed the concepts of home ownership, renting and saving money and have dispelled the common myths in their multimedia package "Home Ownership: The American Myth." The complete package is comprised of a book and a Lotus or Excel spreadsheet. The document read by itself, will enlighten the reader on the concepts mentioned above. The Lotus or Excel spreadsheets, which are both easy to use, can be used by the reader to enter their own numbers to analyze the rent vs own decision.

Results from the spreadsheet are integrated into these examples showing the financial implications of renting vs owning.

Home Ownership: The American Myth

"Home Ownership: The American Myth" also titled "Rent vs Own Analysis" dispels the following myths of home ownership:

one is better off owning a home because they pay less taxes
it "absolutely pays" to own a home because the money you pay is an investment rather than money squandered away
housing prices always appreciate

The book is filled with easy-to-understand examples analyzing various rent vs own situations. Results from the spreadsheet are integrated into these examples showing the financial implications of renting vs owning. Generally, in most areas of the country, one will save money by renting. This savings needs to be weighed against the "expected" appreciation of the home.

In addition to dispelling the three myths illustrated above, Myth Breakers includes a small section on how to plan and save money. In this appendix, they illustrate a 5-point approach aimed at helping the reader save money. "The key to saving," says Mitchell Levy, President and CEO of Myth Breakers, "is to treat the amount of money you feel comfortable saving monthly as a fixed expense, an item which must be paid." "By treating your monthly savings as an expense, you can emulate the forced nature of savings (forced savings account) that's built into home ownership."

Product Availability

The "Home Ownership: The American Myth" document is available for $11.95 from your local book store or by contacting Myth Breakers at the address below (quantity discounts are available). The spreadsheets are available for $32.50. Please add $3.5 for the book and $4.00 for the book and spreadsheet for shipping. California residents need to add their local sales tax.

Myth Breakers and Home Ownership: The American Myth are trademarks of Mitchell A. Levy.
Lotus is a registered trademark of Lotus Development Corporation.
Excel is a registered trademark of Microsoft Corporation.

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Short Article onHome Ownership: The American Myth