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Rent Trap Myths Myth #1 - Escaping the trap will get easier later.
Escaping the rent trap becomes harder over time because the price of real estate goes up while income stays the same. The price of real estate always increases over income. Real estate always goes up over time because population is always increasing while available land remains constant. Another problem is that most renters develop bad spending habits that are nearly impossible to overcome as years go by. The longer someone rents, the harder it is for them to sacrifice. I have discovered that people who have rented for less than 2 years are ten times more likely to escape the rent trap than someone who has rented for 10 years. People also believe that if they make more money next year, it will be easier to buy. Wrong. People in the rent trap just keep buying more crap.
Myth #2 - Escaping the rent trap requires excellent credit.
Credit is only part of the puzzle. Other parts include money saved for a deposit and how much money is earned. If you paid cash for a house, you wouldn't need a loan and no one would care about your credit. Did you know that you can purchase a condo for less than $40k? Do you think someone would give you a loan if you had $2k in your pocket and made $80k a year? Of course they would. If you have $2k in your pocket to put down on a $40k condo and make $80k a year, I will personally give you a loan. Sadly, there are thousands of people driving $40k cars around in Las Vegas and don't own a home. Amazing isn't it?
Myth #3 - Only the rich, the lucky or the employed can escape the rent trap.
Owning a home has nothing to do with how much money you make. It has everything to do with how much money you can save. I have been unemployed almost my entire life, I'm not rich and the harder I work, the luckier I get. Just in case you need another example, let me demonstrate extremes. These are people who actually exist.
Myth #4 - Escaping the rent trap is easy.
If escaping the rent trap were easy, no one would be renting. Escaping the rent trap requires work, discipline and a plan. Everyone that I meet who is renting either doesn't work, has no discipline or no plan. What's interesting is that I meet people every day of the week that have 2 of the 3 ingredients. Owning a home is a mystery to them because they are lacking the one key that unlocks the door.
Myth #5 - Working hard is enough to escape the rent trap.
All you have to see is the 40 guys standing at the Home Depot entrance to know this myth is ridiculous. The hardest working people I know don't own a home. There is no correlation between work and wealth. Most people who work to death spend every penny they make. Very few people have the discipline to save money. Those that posses the discipline to save own real estate.
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