Interest paid is also money down the drain. Usually more money down the drain than rent. The cost of speculation, perhaps.
No, the interest is deductible on your tax return. Rent isn't. And the interest paid certainly isn't more per month than rent. I assume you know that part of your monthly mortgage payment goes towards the interest and the rest is reducing the principal. Over time you're paying off more and more of the principal and less and less is going towards the interest. And if one goes the 15 year term it's even better, assuming one can afford the higher payments.
In Sydney rent is lower than interest. And interest isn't deductible. That's interest only. No principal included. I want to short your employer's stock.
Well, in the US, interest is deductible and that's what is relevant to me. I'm a trader so your drivel about shorting my company's stock is funny. I left a corporate job 21 years ago to trade. Can you take a tax free $500,000 gain in Sydney? We can in the US when we sell a house. So I rest my case on rent vs. own.
You (and many others) get it! Live below your means. And it's not rocket science ... merely choices. And when we look back on making some sacrifices we realize how much they paid off in the longer term and how it's afforded us many life choices now.
Obviously tax issues will play a role on one's perspective over renting and owning, difficult to get a view good for all - and i'm curious to read some of the studies Zzzz1 mentioned, but he is keener on boasting about overwhelming studies than to link to them. Go figure...Btw it seems he's from Germany where from memory only half the population owns their primary residence, one of the lowest rates in the developed world, and germans don't seem less money savvy than their neighbours. There is definetely not a good for all solution when it comes to owning vs renting. Anyway a life long renter myself, and when I used to live in a high tax country it allowed me to have an apartment where the rent alone was higher than my taxable income, and to get it accepted through a tax audit. Which brings me to JJ and Market's Surfer's posts above, in expensive parts of western cities, the average taxable income gives hardly a good glimpse at the real income people living there enjoy, ime actually living in such parts the average taxable income, though higher than in other parts of the country, is hardly enough to live half decently there with a family, yet locals certainly appear to live well - a mix of wealthy foreigners living in the country part time, entrepreneurs, professionals, high executives and quite a few average or slightly above average earners as well, who appear for a large part to have inherited - quite a bunch of civil servants as well, who on paper at least are not supposed to be able to afford life there - the last 2 groups are very reassuring if you have some money and young kids, because it hints that even if they don't end up particulary succesful, they can still enjoy an easy life later on.
Why would I get a corporate job? I trade independently and have since 1996 and keep all the money I make. I no longer have to worry about money and I'm grateful for that. I volunteer in schools and help kids with math. My wife and I can live anywhere we want and we're fortunate to live in a warm climate in the winter and on the ocean in the northeast in the summer. I took a one year leave from posting on ET due to people like you who seem to have anger issues or other unresolved problems. This topic is about a guy who can't get by on $160K per year and addressed other sub-topics like rent vs. own. You snarky comments above are irrelevant and suggest you have personal issues. But I guess there's always the IGNORE button for posters like you.
Noticed your post, good analysis. Just one small correction, take the 18k in 401(k) money and (roughly) subtract it from 160k first (142k). Then take 35% of 142k (49k). Subtract living expenses etc. You'll get something like 44k after tax, 401(k), and expenses. Tack on the fact that 18k was already put away. Great example of leveraging pre-tax money shelters.