ownership does not lead to happiness

True, the gloss and novelty wear off after a while.

The low housing expense (because out of dumb luck I bought in a slump) and the quick commute are still good, when I think about them, but the apartment's become just the apartment, better than some and worse than others.

If I had a higher stress threshold and less stuff, moving on a whim would be fun.

Two key points to buying RE (no surprises here): 1. You should love where the property is located; 2. The purchase should fit within your immediate and long term budget such that the cost of owning will not cause you to unduly sacrifice experiences you would otherwise want to have and could afford.

The article also speaks of moving every so often to keep the feelings fresh because we become inured to things over time...even good things. That point is more up for debate i think and dependent upon an individual's preference for consistency/stability vs. newness.

"A 2011 study of about 600 women in Ohio found that homeowners weren’t any happier than renters."

600 women in OHIO?

Seriously?

Oh well I guess that settles it! Owning in Manhattan is insane!

Ohio, like Pennsylvania, is not Manhattan.

>Two key points to buying RE (no surprises here): 1. You should love where the property is located; 2. The purchase should fit within your immediate and long term budget such that the cost of owning will not cause you to unduly sacrifice experiences you would otherwise want to have and could afford.

Apparently 300_Mercer missed lesson #2.

I love this one comment to the article:

"will all the commentators who sneer at home ownership be able to afford acceptable housing in their retirement? Or are they expecting to be subsidized in some way? While I'm all for sharing with the less fortunate, if you're spending your money on dinners and vacations while I'm paying off my condo, why should my taxes help pay for your retirement housing?"

I believe he just described all of Europe!

agree. & now you are being ignored by TheTourist.

> Ohio, like Pennsylvania, is not Manhattan.

Shocked you didn't say Ohio, like columbiacounty, is not Manhattan

Nycmatt raises an important issue. I am increasingly shocked that amongst our friends (all of whom are for the most part hard working professionals with graduate degrees) there is virtually no discussion of thoughtful retirement planning or the involvement of independent financial planners in their lives. It is almost as if many are so flummoxed as to how to successfully structure retirement savings plans that they have willfully buried their heads in the sand and all but given up. As our retirement horizons come into view, I don't know how they sleep at night. One couple has financed 2 children's college tuition ($500,000) and in the process decimated their retirement savings. The concept of asking if they could afford these elite colleges for their children seems foreign. They have given their children amazing experiences and educations but at devastating future personal cost. These are smart people but i fear they are representative of many middle class people who appear to believing well but whose financial futures rest on wishful thinking and "tomorrow is another day" mentality.

The true impact of decisions one makes in one's 30s and 40s often does not begin to come into focus until one is around 50 or so. I fear that many people's know are in for decades of financial stress such as they have not thought through or anticipated.

Another friend was stressing for years about her inability to make ends meet AND sock money away into educational funds for her kids. When she finally sat down with a good financial planner, he told her to forget about e college funds and focus on Retirement saving because she simply didnt have enough money to do both. She was dumbfounded when shown the simple math on a spreadsheet.

Too many people figure out what they can afford today with also asking what can I afford today when taking my long term finances into account as well.

What a waste.

Ugh. I am not good at iPad typing. Among my many typos, the last sentence should read "... withOUT also asking..."

People not saving properly for retirement, that's an old story. Seen it with my parents' generation. Some people hit the lottery in one form or other. Others just live on less, in a lower-cost area, etc. I don't imagine it'd be fun to regress to the spending habits of your 20s in old age, but not the end of the world.

Always fun to see people convolve ownership with retirement saving. Speaks to a certain lack of personal discipline.

Home ownership is key to retirement saving. Housing is the single biggest household expenditure, and it's ludicrous to think one would be able to maintain their housing costs into retirement on 1/3 to 1/4 of what they were making during their peak earning years without significantly cutting their housing costs.

And the only way to significantly cut housing costs is to either A) move someplace with ultra-cheap rent (that will remain ultra-cheap for the remainder of your life), or B) OWN your home.

And Kyle makes an excellent point about paying for children's education.

Too many middle and upper-middle class parents make the foolish decision to pay dearly for their kids' education at the expense of their own retirements.

Any financial planner will tell you that you can always borrow for education. You cannot borrow for retirement.

Unless, of course, your children have no problem supporting you in your old age after you've sunk half a million dollars over the years into their educations. I'm thinking with today's entitled younger generation, not only is that highly unlikely to happen -- but they'll also be expecting an inheritance out of you, as well.

> One couple has financed 2 children's college tuition ($500,000) and in the process decimated their retirement savings. The concept of asking if they could afford these elite colleges for their children seems foreign.

Once the kids are out, and the mortgage is paid off, it is very easy to amass wealth.
They will easily replace that $500k within a couple of years.

The right move is to pay off your entire mortgage by age 30-35,
and live the rest of your life just paying common charges.
When you do this, you can earn less, work less, or simply save more.

...in 2007 he bought a two-bedroom two-and-half-bath apartment for $2.35 million. In March, he listed his two-bedroom place for $2.7 million with Ryan Serhant.

No, but he now has $200,000 in cold hard cash that a renter will never see in a lifetime.
This this is more like the worst case scenario. 2007 to 2013.
In any other 5-6 year period, he'd have made a cool 1/2 mil of cold hard cash.

How on earth will they "easily" amass half a million dollars in a couple of years? Am I reading this wrong? Are you being facetious? I might be reading the tone wrong...

It should also be acknowledged that kids finishing college is no guarantee that they're off the dole. It seems more and more common for parents to subsidize children well into their twenties.

The cost of education is appalling. I was fortunate enough to have my tuition paid by my parents, but I worked the entire time I was in school and paid my own rent, basic expenses. I didn't know anyone, when I was getting my degree, that didn't have to contribute something (either in the way of loans or part time jobs) toward their education. Even the kids with wealthier parents were nudged toward contributing as a means to transition them into adulthood and adult responsibilities.

I know a woman who spent the majority of her divorce settlement on her kids private universities. She now has no real retirement and recently reentered the work force in her fifties. She just didn't have the heart to tell her children that they couldn't afford the same things the other's in their community could afford. And it's just heartbreaking that she--and many other parents--feel obliged to fund things they can not afford because they can't bear to be honest with their offspring about their finances. Plenty of my adolescent requests were met with the simple words, "We can't afford that." I survived the disappointment just fine.

That's for sure, unsure.

I also agree with kylewest. "Newness' is nice if you can afford it. If you're comfortable where you are living then you can pass on the newness. Enjoy where you live and move when you actually want to and can afford it. If you looked for the right apartment to buy for years (as kyle did) and finally found it -- why sell and move?

Co-op vs. condo? Co-op or condo vs. rental?
I agree with inonada: Ownership does not lead to happiness. Being able to enjoy where you live leads to happiness.

>> Home ownership is key to retirement saving. Housing is the single biggest household expenditure, and it's ludicrous to think one would be able to maintain their housing costs into retirement on 1/3 to 1/4 of what they were making during their peak earning years without significantly cutting their housing costs.

This speaks more about you rather than any universal truth. My understanding is that when you rented, it was a place whose rent/price/value was 2x what you eventually bought. Some people lack the discipline to rent the 1x place and save/invest the rest in lieu of paying down equity. Others have the discipline.

Worthless article, and given that it appeared in the Real Estate section certainly not genuine news. Whether owning real estate makes one happier is very subjective and depends on the emotional state prior to purchase of the buyer, preference for stability, whether the property is above or below water, etc. One could come up with similar problems if one were to change the word ownership to rentership (unexpected rent increases at the end of a lease, problem land-lord, etc )

Actually I found this article better than 95% of the ones in this section. It had decent citations, and not just two or three anecdotal references. The whole psychology of happiness thing may seem bogus, but multiple studies involving different ages and cultures all confirm that experiential spending makes one far happier than buying possessions, including a home.

How many people buy below their means? How many do so significantly below?

Dealboy, parents who have children later in life and are 5 years from retirement or less when ThHe last kid graduates from college cannot replenish their at all. There is no time. Also, the example guy doesn't have $200k profit. Transaction costs likely left him slightly in he hole actually. Condo transfer fees are a fortune to purchase new construction. En there is the 6% commission upon selling.

The millionaire next door.

Dealboy:

The guy paid $2.4M (see ACRIS). After various closing costs on the buy side, $2.5M total. On the sell side, grossed $2.65M (assuming NYT didn't BS that one too) but paid $200K in sell-side closing costs. So out $50K there.

Then there is the $150K in maintenance paid, $50K in improvements, and the small matter of $610K paid in interest (5 years at 6.375% with a balance going from $1.8M down to $1.68M, then refi at 3.75% with $1400K loan for a year).

So all-in, $860K spent over 6 years. That's $12K a month.

But wait, there's more. The $700K cash sunk in 2007: that'd have been good for $230K profit in SPY. The $120K sunk between 2007 & 2012: another $60K. The $225K sunk in 2012 & since: another $60K in profit. That's $350K total. Don't like stocks, prefer bonds? TLT would have done $430K.

So all-in, it cost this guy $1.2M to $1.3M for that apt for 6 years. That's $17K a month for an apt that'd have averaged $8K a month at best (see apt 10D). Or if you want to pretend the alternative for the $1.1M cash sunk was a mattress, it cost $12K a month.

Reality is that this guy paid $1.25M for that which could have cost $575K. At $17K, he could have been renting some $6M place no problem. Instead he's been overlooking a garbage site. But who cares, he's now happy to be moving. And you're still the village idiot for translating a $675K loss into a $200K gain.

The most interesting quote of the article for me:

>> But Dr. Dunn isn’t convinced ownership is all it’s cracked up to be. “A very robust finding in psychology is people are highly motivated to justify their own choices,” she said. “It’s very hard to get people to admit they spent hundreds of thousands of dollars in a way not optimal for their happiness.”

The guy above is on his 4th move in 12 years of ownership, so from the outside it looks like he likes change. If you bother to run the numbers, he wasted several hundred thousand on this last purchase. I wonder if he gets it, or if he sticks his head in the sand on both issues.

dumbboy...he's at it again!

I'll go with happily head in sand. Maybe in cement.

w67thstreet
about 5 hours ago
Posts: 8694
Member since: Dec 2008
ignore this person
report abuse
I'll go with happily head in sand. Maybe in cement.

Are you threatening dealboy?

Fking greendork.

W67 walking around with skittles and some watermelon iced tea. Ya wanna Zimmerman this shit you fking POS.

Back on topic. Hey dealboy. We see have a difference of $875k this example. Someone can't do financial math. No worries, you've got plenty of company with UD, w81 and Ali. Go! REBNY! We do retarded math!

You either RENT or BUY.

I'm sure the % of unhappy people renting is FAR higher.

Such logic. And science. Even a smattering of psychology and philosophy. Total conjecture but we applaud your effort.

I considered buying in Citylights 15 years ago, instead I rented in manhattan for 13 years.
I am certain I was happier renting in manhattan than I would have been owning in LIC.

>> I'm sure the % of unhappy people renting is FAR higher.

This does not surprise me, you do like to live a delusional existence.

Despite:

- all the research done on the subject
- compiled into a book by two reputable researchers on happiness
- summarized into a NYT article
- linked by yours truly

You are "sure" about a "FAR" difference.

Authority on subject making measured statement>> “People still view housing as a central component of happiness and a critical aspect of the American dream,” Dr. Dunn said. “But there is little research to support that.”

Long Island denizen making an absolute proclamation in the opposite direction>> I'm sure the % of unhappy people renting is FAR higher.

this unhappy renter is traveling to Amsterdam for a month of northern europe sightseeing. sucks to have money.

Keep feeding that perpetual net worth eating machine... 3% a pop. $30K/yr. Hey my euro trip is costing me $30K.

Coincidence? Design?

Going to see the windmills w67?

Authority on subject making measured statement>> “People still view housing as a central component of happiness and a critical aspect of the American dream,” Dr. Dunn said. “But there is little research to support that.”

What kind of research is supposed to provide evidence of happiness? His first sentence actually has meaning, people believe they are happy by doing something, therefore they are happy by doing that something. Does research really need to support feelings and self validation of objectives?

> I considered buying in Citylights 15 years ago, instead I rented in manhattan for 13 years.
I am certain I was happier renting in manhattan than I would have been owning in LIC.

there are many LIC fans out there

> I know a woman who spent the majority of her divorce settlement on her kids private universities. She now has no real retirement and recently reentered the work force in her fifties.

what is she working on? real estate agent?

Well, hb,yes. I think the pursuit of happiness, or the perception of the same, is integral to our id and ego fed selves. As such I think it's worthy of study. And the evidence overwhelmingly supports that people are happier when they spend their money on experiential pursuits rather than possessions. That's been known for years, and the research has been consistent. It's very easy objectively to measure mood, particularly comparatively.

>>"One couple has financed 2 children's college tuition ($500,000) and in the process decimated their retirement savings. The concept of asking if they could afford these elite colleges for their children seems foreign. They have given their children amazing experiences and educations but at devastating future personal cost."

Some parents consider investing in their children's education as an investment in the whole family's future (kids + parents). The kids are expected to help supplement their parents' retirement fund when the day come. I know plenty of people who pay their parents' rent or mortgage now or plan to do so in the future. If this couple with 2 kids who graduated from "elite colleges" costing $500K total have to worry about their retirement, then they failed as parents.

Also, people misreport. They will say that something makes them happy although they are seeking anti-anxiety drugs for the first time. Does your home make you happy? Oh yes, ecstatic. Your mortgage? No, awful. This type of study controls for these types of variances.

> And the evidence overwhelmingly supports that people are happier when they spend their money on experiential pursuits rather than possessions.

The experiential pursuits, is that in comparison to owning or to renting? Can it be compared to something else totally irrelevant to home ownership too, such as eating pizza? How Does renting compare to eating pizza?

> although they are seeking anti-anxiety drugs for the first time.

Huh? This is not a drug forum.

greenstein, why?

C0C0, would you be so kind as to volunteer this weekend for the next PSA for C0lumbia C0unty for "This is Your Brain on Drugs, Any Questions?"

how happy does this all make you?

Happier than the two guys in the Geico commercial.

Hb is simple, easily amused. And a troll. With a troll-like desire to obfuscate and misdirect attention, sometimes even bringing up numerous old threads uselessly. And he's fond, very, of lying or distorting the truth if it suits his agenda. Very much like riversider, who never met a truth that couldn't be manipulated to confirm his pov.

Back to the topic, I like moving as well.. it's more fun and less stressful if its not a large financial burden to do so. I'm probably staying put for at least another four years, but my ownership happiness is greatly improved by my very low monthly payments.

I am sick unto death of the upstate house, where the upkeep, costs are no longer even close to adequate given my low level of enjoyment. Time to sell.

You like moving? You have trouble getting groceries delivered.

AR, do you need the anti-anxiety medicine when moving? Do you keep the old Rx bottles when you move to a new apartment?

Troll.

"If this couple with 2 kids who graduated from "elite colleges" costing $500K total have to worry about their retirement, then they failed as parents."

That's not fair.

No one can control their adult children turning into greedy and entitled assholes.

And aside from those 600 women in Ohio -- on whom this ridiculous "study" is based -- but I don't see what's so "happy" about being forced to live like a gypsy your entire life, hopping from apartment to apartment to apartment every year or two.

What's "happiness"? How about knowing that your apartment is YOURS as long as you like, with a monthly fixed mortgage payment that will never change (and in fact, one day will GO AWAY altogether once it's paid off), and a maintenance payment that by nature remains as low as possible, reflecting only the true cost of taxes and your share of building upkeep, rather than a rent payment that will NEVER go away, and is padded with profit for the landlord.

That, in my opinion, is "happiness".

Aboutready, do you need the anti-anxiety medicine when moving? Do you keep the old Rx bottles when you move to a new apartment?

A fool who only looks at his expenses...... By that measure eat less, dress less, and travel less.

Live less. Confined to your home which constricts your life tremendously. or just go further into debt to have both the apartment and a life.

Sell your country home because of the maintenance headache. Hole up in a low cost condo in an outer boro. Refuse a drivers license. Get groceries delivered; return the ones you don't like.

Troll.

Sell your country home because of the maintenance headache. Hole up in a low cost condo in an outer boro. Refuse a drivers license. Get groceries delivered; return the ones you don't like. Send husband out to earn the money.