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Disturbing Facts About Your Bank, Many Millennials Will Rent Forever
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Storing your money at a bank entails more risk than you think. Your deposit is a bank's liability. Banks must take risks with your money because they don't charge you fees.
Banks used to have a 10:1 reserve ratio. As of March 2020, all reserve requirements are now eliminated.
Rather than storing lots of money at the bank, borrow lots of money from the bank.
US households own $41T of owner-occupied property—$29T in equity, $12T in debt. The national LTV ratio is 30%, historically low. That's 70% equity.
Of the five ways real estate pays: one profit source is the market, two are from the tenant's job, and two come from the government.
Many Millennials plan to rent forever. 63% have nothing saved for a down payment.
The interest-rate lock in effect keeps constraining the available supply of homes.
This forces more homebuilders to build.
Last week, NBC Nightly News covered the rise of build-to-rent communities.
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Show Notes:
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Complete episode transcript:
Welcome to GRE! I'm your host, Keith Weinhold. Do you have any idea what banks do with your money? How home equity is like a bank, hot Millennial rental trends, and the proliferation of Build To Rent real estate, today on Get Rich Education!
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Welcome to GRE! From Glens Falls, NY to Klamath Falls, OR and across 188 nations worldwide, the voice of real estate investing since 2014. You're listening to Get Rich Education. I'm your host, Keith Weinhold.
You did not wake up to be mediocre today. So we don't focus on long-term budgeting here.
Correlating financial betterment chiefly with reducing your expenses is just a race to the bottom. You and your peers would just be racing to the bottom.
We know that, instead, yes, arbitrage is created when you borrow low and invest high. But the ultimate arbitrage - which is the gap or that spread, is when your quality of life vastly exceeds your cost of living.
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