Kristy Shen and Bryce Leung Say, "Never Buy a House" - Well I disagree

How to Retire Like a Millionaire By Kristy Shen and Bryce Leung

But first, my Pit Bull

Read this book if you haven't yet

This is a great book documenting a process taken in a relatively new frontier and an in depth look at the rules of investing and how to structure your own escape. It was fun to read and provided very useful information. If Kristy is somehow miraculously turned on to my little blog post, I want her to know I loved reading the book, it’s simple, straight up, and entertaining.

And I have an angle that I think re-works her hate for house buying!

Here’s what got me thinking… Kristy offers a lot of good steps that anyone can follow, and she backs it up with solid math and reasonable expectations. She considers circumstances that are different from hers and what she wants for her future and gives backups and alternatives to everything she talks about, except for not buying a house! No strategy, no constructive math, no favorable circumstances, just that home buyers are a herd of wrong doers. And given the context, I’m still not sure she doesn’t hate people who retired early from their rental portfolio they bought during the 2008 crash.

She also mentioned Kiyosaki (real estate guy), how she disagrees that “savers are losers” because she saved her way to retirement. I must disagree. Like Kiyosaki also said, the rich don’t work for money, they work for assets, Kristy and Bryce didn’t save their way to FI. They invested in assets - index funds, Bonds, and REIT’s, etc. 

If you are putting your money into a bank account, getting .05%,.5% or even 1%, 2%, you are losing. 

They (Kiyosaki and Brysty) seem to both agree that your SFH is not an investment

And I generally agree, unless…

Say you’ve reached or can reach FI in your 30’s, and you live into your 80’s or beyond.

What if you DON’T want to travel the world for the next 50+ years? Or live on a beach in Thailand forever? Or you don’t want to be a renter until you die? Because I will bet that rents are going to rise over the next 50 years, all while in 30 or less, one could have a home paid off and not worry about rent increases or having to geo arbitrage in a bear market as a 70 year old. Some people like where they live and want to stay and own a home, have kids and not world school (world schooling sounds amazing) and have that piece of mind for the longer term. I wish the book considered that, and the strategies I suggest might be its own chapter and jump the track in the context of the book, but at least don’t call us wrong and tell everyone never to buy a house.

Property taxes suck, interest payments suck, especially right now with the TCJA Salt Caps, so do agent commissions and transfer taxes. Aside from just wanting a house, fixed monthly payments, dogs, a front and back yard, here’s ways to achieve that as part of your FI goals

Buy a SFH 3 or 4 bed house at 25, or 28, or 31, and rent the unused bedrooms out. Your house will pay for itself, even while you travel. Property tax, interest, principle, and you’ll receive tax benefits on the rented portions. You don’t get tax benefits as a renter. Your landlord does, while you pay off his or her house.

Buy a home and list it as a short-term vacation rental (AirBnB) while you travel the world. When you come back, you’ll likely not only have cashflow from the rental but a home that’s been partially paid off. Repeat this as often as you feel like traveling until it IS paid off.

Other ways to capitalize on a SFH

Buy a home in an appreciating area

Timing – I know people in LA who bought during the crash, and now their home is worth 100% what they paid. I’ve also seen rents for a 2 bed apartment surpass said mortgages. I know, LA is its own world and the crash was an anomaly given the last 50+ years. My point is, anything can happen and anything an still happen.

Buy a fixer

Don’t sell it! Then you don’t have agent fees and all that other stuff. By the way, tech and new companies are changing agent commissions. I think we have a long way to go before the traditional agent is done for, but people still have the option to sell at a low flat fee or to Zillow.

Last, Kristy self-satisfied-ly says she doesn’t have to deal with property tax or insurance or any of that – read the insurance chapter. I must point out that if you are renting, you most certainly ARE paying for all of that. And if you’re renting a SFH, you’re paying for 100% of it all, tax, principle, interest, insurance, and very likely are paying even more on top of that! Which is what we RE people call “cash flow”. And if you're renting a condo or townhome, you're likely paying the HOA also. 

So what I’m saying is that she isn’t wrong, but she only provided her opinion and her understanding of home buying, and that’s fine. It’s her book, and it's how most people buy a home. I want to point out there are better ways to do it, other than just go buy a house on the MLS, which can be part of your FI strategy and your life, long term.

Chapter 22 go your own way

Growing up poor taught me to be, creative, adaptable, resilient, and to persevere – My EXACT experience. 

我也吃了苦, 我也吃了酸 – For you Chinese readers, I speak WAY better than I write

Which means that in my belief, there is always a way, do what makes sense to you, and never stop learning, never say never!