The fed cut rates and markets are in a tizzy. But I didn’t realize they were _this happy._ ![Blog post image](/images/blog/Screenshot-2024-09-19-at-5.31.15 PM-1024x527.png)view [Meb Faber’s tweet]() (and see footnote below) Yes, if you bought at the lows of the credit crisis, you’ve 10x’d your investment. These are the kind of multiples you’d expect on VC funds, not something you can buy commission-free on your phone. As a renter (in HCOL areas) for roughly the same time period, I breathed a sigh of relief. Maybe it was smart to stay out of real estate in favor of indices? ## New to RadReads? Hi, I’m Khe Hy. Nearly a decade ago [I quit my 7-figure job on Wall Street]() to become a writer. I explore topics like [money](), [happiness](), [ambition](), [relationships](), [productivity]() and [more](). I also host [The Examined Life Podcast]() where I explore life’s thorniest questions with a different guest each week. My newsletter is the best way to experience my work. Sign up here: ## The truth about buying vs. renting OK, so I’m definitely cherry-picking my data here. But here’s what the Case-Schiller home price index looks like for the same period. ![Blog post image](/images/blog/Screenshot-2024-09-19-at-5.39.00 PM-1024x478.png) Home prices are up 2.2x times over that time period. So stocks win? ## It’s the leverage baby The beauty of owning a home (and something I yearn for as a long-time renter) is that you have leverage. A very simple example can illustrate this. Assume you buy a house for $1,000,000. The next day you change your mind. And you immediately sell it for the same price, minus the 6% commission. How much have you lost relative to your equity? 6%, right? Nope, you’ve lost 30% because of leverage. ![Blog post image](/images/blog/image-1-1024x573.png) Now this cuts both ways. For simplicity’s sake let’s assume the house goes up by 10% (with the same 6% commission). What’s your return? ![Blog post image](/images/blog/image-2-1024x574.png) Leverage works on the way up too, amplifying your gains by a meaningful amount. ## So who comes out on top? This is a crude analysis that obviously doesn’t take into consideration a multitude of factors. These include (but are not limited to) interest rates, equivalent rent, property taxes, insurance, maintenance reserves and inflation. I’ve always loved [the buy versus rent debate]() because as the point above illustrates – it’s an extremely nuanced conversation. In this video, I look at these nuances including: * Consumption vs. Investment * Simplicity vs. Complexity * Price Transparency vs. Obfuscation * Liquidity vs. Permanence * Customization vs. Acceptance * Price Transparency vs. Obfuscation I hope you enjoy the video. _(The S &P Example requires a few key disclaimers: Transaction costs, ETF fees and dividend taxes. Also, shifting the timing from the all-time low dramatically changes the return.)_ ## Are you a high-earner going through a career transition? Find purpose, navigate money scarcity and reimagine ambition with our Group Coaching program. [Apply today]()