Should You Rent & Lease Or Should You Own?
The age old question. Should you own your car or should you lease your car? Should you own a home? Should you rent? There are many opinions on these two topics and the reality is, almost nobody agrees on them. Today I want to use cars and homes as examples of when you should own things vs. when you should lease them or rent them.
First, let’s discuss what ownership means. It means that the thing is YOURS. Awesome! But that doesn’t mean ownership is a good thing outright as concept right? Are there certain things you wouldn’t want to own? I would believe so. Owning something just so you can say you own it isn’t a good enough reason to own it. Owning it means you are responsible for it. You have to fix it, you have to maintain it, you have deal with the outcomes yourself. Let’s take a business for example. Statistics show that for most people, owning a business is not a good idea.
Let’s talk about when you should own things. First, you should own it if you plan on severely damaging it and it belongs to someone else. Why? Because it’s unethical to ruin someone else’s stuff. It’s unethical to ruin your own stuff too, but at least it’s yours and you can do what you want with it. Another reason to own something is because it produces an income. The final reason to own something is because it provides a tax benefit. Aside from that, there are no other logical reasons to own something. There are emotional reasons and justifications, but those are not logical.
Let’s talk about owning your car. Are you going to damage it severely? For most people, no. Does it cash flow? No. So then you shouldn’t own it. If you purchase a car for $20,000 and own it for 5 years, that car will be worth probably only $12,000 by the time you sell it. Why would you invest your money somewhere that is guaranteed to lose? Lease. When you lease, you are financing the depreciation of the vehicle. “But Jerry the interest rates are outrageous”. You don’t pay your bills in interest, you pay them in money. When I lease my vehicle, my payment is lower than yours and I can write it off on my taxes. At the end of the my lease I will have more money than you will.
What about a home? A home is a bigger myth than a car because homes have been around longer. First, when you buy a home, you don’t own it. The bank does. Unless you paid all cash, which is a terrible idea. You buy a home and now you have to maintain it, fix it, mow the lawn, shovel the sidewalks, take your trash out, pay for insurance, and spend your time that you can never get back on these tasks that add no value to you. What about appreciation? Homes don’t appreciate. Dollars go down in value due to the federal reserve’s screwy monetary policies and because those dollars are worth less, it requires more of them to purchase your home. That’s why the price went up. It’s not because it is worth more. Factually it is worth less. It is a building made of sticks and those sticks are not as good or reliable as they were 30 years ago. They are worth less. Take into account all of your other costs of ownership and you are throwing your money out the window. Plus there is no tax benefit. Rent. Why? Because when you rent you are not obligated to do anything, but pay your bill. You don’t have to maintain it, you spend no extra time or money on it, and if you play your cards right you can deduct your rent from your taxes.
The idea that we must own things is pushed on us by banks and the Federal Government. Who benefits from when you own cars and homes who benefits? Banks do and the government does. You pay interest and you pay taxes and you do all of the work.
I teach people how to become financially literate so that you can attain your purpose, wealth ,and freedom. Financial literacy means removing false information about money and replacing it with correct information. If you would like to learn more about money and use that knowledge to create wealth, I want you contact my office so that we can give you a free coaching call and Wealth Potential Analysis. Click here.
Own Your Potential,
Grant Cardone Certified Coach
Jerry Fetta helps his clients build wealth so that they can eradicate poverty in their own lives and own their potential.
He believes scarcity and abundance cannot co-exist and that the way to end poverty is to help you build wealth.
You were not created to spend 40+ hours per week serving the 40-year-to-life sentence trading your precious time for money just to live in mediocrity.
However, the truth is that time and money must be exchanged. It just doesn’t need to be you making the exchange.
Jerry helps his clients create wealth that exchanges time and money on their behalf. The only way to do this is to make more money, keep it, and then multiply it.
He has helped clients double their income, save $100,000 tax-free, and secure 8–12% fixed annual returns on their assets.
To get started, go to www.WealthDynamX.com/contact