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Comment by s1artibartfast | Hacker News Reader

How are you planning to buy a house without cashing out stock investments?

Comments like these help remind me a large fraction of this website lives in an alternative reality.

Why? Where else would the money for the down payment come from? People don't keep tens of thousands in their checking accounts.

Yes, there are savings and money market accounts for that sort of thing.

Usually people save money in a savings account.

Future homeowners don't. I suspect there is a pretty strong correlation between people who invest their money and those who buy houses.

It is hard to imagine anyone affording a a mortgage if their savings are rotting away at 5% less than inflation.

Depends on how soon you are planning to buy. The usual rule of thumb for a big purchase (house, car, etc) is that if you’re planning on it occurring in 3-5 years, put money in a savings account. Otherwise, yeah you should probably invest it.

I agree there is a time and place for it. 5 years is a bit long IMO. The S&P500 is up 250% in the last 5 years, while savings would have netted maybe 10% growth in that time. I imagine some sort of hedge would be appropriate, but have definitely been burnt by taking money out of the market too soon.

Im just shocked that some people think stock is some SV alternate reality. I grew up in a rural community before the internet, and even then, nobody I knew was long term saving for houses or retirement with a savings account.

Yeah agree, I think it's really about personal risk tolerance.

I do agree 5 years is a while, but it's also easy to say that right now based on the last 5 years. It's not terribly difficult to find 5 year periods where returns aren't very good or flat out bad (e.g. starting investing in 2000).

Your assertion that future home owners don't is false.

Anecdotal Source: Every single person I know who has bought a house, myself included.

If you wish to counter this source please provide data supporting your claim that all home owners have stock options to liquidate.

Where are you making this stuff up from? I never used the word options.

You don't know anyone that has sold stock to pay for a down payment?

Silicon Valley brain is real, folks

I thought about saying something snarky, but suffice to say I don't think that socks are a silicon valley invention, and I think you are at a major disadvantage to more flexible/savvy investors.

https://www.wealthfront.com/blog/invest-when-rates-rise/

You understand that most Americans (>60%) own stock, right?

You're just patronizing everyone who isn't in Silicon Valley with a statement like this.

">60% of Americans own stock" does not tell the whole story.

First, how many Americans only own stock as part of their 401(k) or IRA and can't liquidate it without affecting their retirement?

Second, how many Americans own stock portfolios with sufficient value that they could liquidate them and purchase a house for cash, as the initial response implied? I guarantee you it's less than 60%.

How did I imply that?

I'm talking about down payments, paid for by stock sale, 401k, or IRA loans.

Maybe I'm crazy and you're right, but I think most people use these vehicles to save for and fund their house purchase, not a regular savings account.

No, retirement accounts are not for saving to buy a house.

Your loss. They are a good pre-tax investment vehicle. Last I checked you could take $10K out of ira and $50k out of a 401(k) for home down payment or new builds.

You have to pay back with interest, but the interest goes to you.

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