Hello!

I've been around here since 2017, it took me 6 years to learn and understand how crypto works and how big of an opportunity it is.

During this journey I did a lot of mistakes, but I learned from them and I adapted my strategy really fast. I'm really proud that I've been able to materialize some gains that let me invest in my first real estate property! I can't explain in words how happy I am.

Finally I can fulfill a dream, I am an OWNER.

Renting vs Buying

I've been renting for almost 8 years now, and every time I have to pay for rent it pisses me off. I don't want to calculate exactly how much money I spent on rent.

I know that in my scenario and my life goals, buying is the smartest thing to do, however I asked ChatGPT what was the best option.
I used some assumptions to help ChatGPT give me an accurate answer. Here the details & the answer:

Assumptions:

• Initial apartment price: $300,000
• 10% annual inflation in home prices
• 10% annual wage increase
• Monthly rent: $1200
• Annual rent increase with inflation: 10%
• Mortgage interest rate: 3% fixed

Calculations:

• Renting:

Rent at the beginning of the 8-year period: $1200/month
Rent after 8 years: $1200 * (1 + 0.10)^8 ≈ $3,105
Total rent paid over 8 years: $3,105 * 12 months * 8 years ≈ $298,080

• Buying:

Mortgage amount: $300,000 - (0.20 * $300,000) = $240,000
Monthly mortgage payment (30-year loan): Using a mortgage calculator, the monthly payment would be approximately $1,009.
Total mortgage payments over 8 years: $1,009 * 12 months * 8 years ≈ $96,864
Property value after 8 years: $300,000 * (1 + 0.10)^8 ≈ $771,368
Equity built (property value - remaining mortgage): $771,368 - $187,296 ≈ $584,072

Summary:

• After 8 years of renting, you would have paid approximately $298,080 in rent.
• After 8 years of buying, you would have built approximately $584,072 in equity.
  
  
  
  

Conclusion:

In this scenario, similar to the previous analyses, buying the apartment seems to be the more financially beneficial option. After 8 years, you would have significantly more equity built compared to the total amount spent on rent.

And then some "not financial advise" bullshit.

It looks like a good summary to me, I align with the conclusion too. I am confident that the real inflation is close to 10% and I think I can barely keep up with inflation with my salary progression. The only option left for me to build wealth is to invest, and that is exactly what I am doing.

I'm still far away from where I would be in the future, but I dream big and I'll push for a future where I can manage some rental properties plus keep investing in cryptocurrencies.

Wish me luck! 😀