I see your point, over a long period of time, if all other things are managed properly, yes you can make out nominally. But when you factor in purchasing power, it gets blurry.
Good points...but increase in prop taxes depends where you live. If live California then your taxes locked at the purchase price. Some peple live in $1M home which bot 30 years ago for 100K and only pay $1K/year in taxes (might go up a little if county has direct assessments such as new fire station built at the time,...) But now if you live elsewhere...say Nebraska as far I know county sets the tax amount based on their assessment, if home prices go through roof..so do your taxes...when down...like now...so your taxes go down.
When inflation is at 10%...COLA is usually less...maybe 4 or 5%. You end up losing money every year until inflation comes down. If inflation was so good, then hyperinflation should be really good. Go ask any of the countries that have or had hyperinflation if they got a 5000% COLA when inflation was 5000%
Its an illusion. It sounds like a good deal because when you hear 30k you are thinking 30k in todays money, but that 30k is really 1960s money. Whatever he could sell the house for today would buy no more than it would in the 1960s. For instance...lets look at gold. $30k would buy you 857 ounces of gold in the 60s. Today that house better be worth $960k to get you the same amount of gold. Heck...throw in 2 ounces of gold for rent income per month for the last 40 years and the house better be worth $422k and that is assuming he didnt spend a penny for maintainence. The fact is...the real wealth came from paying off the mortgage. If their was zero inflation he would be just as well off with $250 per month in rental income and 30k of equity in his house in 1960 dollars as he would be with today with 2500$ rental income and 400k equity in a house today in 2009 dollars. The only way people get rich off their houses is when these crazy booms happen and thats not inflation...thats speculation.
I like the direction my thread took. To clarify a few things; hell yes I am cocksure I will be able to outearn the average person, forever. By definition, half the people will underearn the average and half the people will overearn. I'm smarter, harder working, a faster learner, and a more dedicated employee than half the people in this world. 10% was a random number pulled out of my butt. Could have said 9%, could have said 25%. I have received no raise for the last two years at my job. I have other things going on in my life and don't really want to add a job search to the mix, but I would expect an increase in pay on par w/ 2 years of inflation if I were to job hop. The point is, I realize that I won't get COLA adjustments that perfectly track inflation. But it will average out over several years.