Ep 8 | Renting IS NOT Throwing Money Away, Really
Think renting is just throwing money away? Think again.
In this episode, Priya Malani flips the script on everything you've been told about homeownership. She breaks down why buying a home isn’t always the smartest financial move—and why renting might actually be the better wealth-building strategy. Using real numbers, she lays out the hidden costs of homeownership and why the so-called "American Dream" might be more of a financial nightmare. If you've ever felt pressured to buy because "it's the responsible thing to do," this episode will make you rethink everything. The best financial decision? It’s the one that works for your life—not your parents', your friends', or the real estate agent trying to close a deal.
Tune into this episode to hear:
Why renting isn’t financial irresponsibility—it might actually be the ultimate money move.
The real return on homeownership (hint: it’s not as good as you’ve been led to believe).
The true cost of buying a home, from interest to maintenance, and why it’s not always the wealth-builder people claim.
How renting can keep your money flexible and working harder for you—without the stress of unexpected expenses.
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Transcription
Renting is not lighting your money on fire, tossing it out a window, or throwing it away, or any other version of that sentiment. It's simply another way to pay to live. And if it works for you, that's really all that matters.
Hey guys, everyone says renting is throwing money away. But what if I told you that buying a home could actually cost you more? I grew up just like you, believing that being a real adult meant buying a home. I had a list of non-negotiables for my childhood dream home, and it had everything: from a sunken living room, glass shower doors (I hate a shower curtain, even when I'm traveling in a hotel—always a glass shower door), and a pool with an infinity edge, because obviously.
But when I got older, things just didn’t line up for me to be on track for a home. I was in my early 20s, laser-focused on my career. I wanted to climb the corporate ladder, maybe go abroad, or maybe my job would take me abroad. But the last thing I wanted was a mortgage that would lock me down. So, I rented and paid a ton. I was living in less than 300 square feet, downtown Manhattan, and shelling out about $1,800 a month. I felt successful, working in New York City in my early 20s, enjoying the great nightlife, all the shows, direct flights to basically anywhere in the world. But I still had this nagging feeling that I should be saving up for a down payment because that's what I thought I would eventually want to do.
No matter how much sense I tried to make for myself, there was always that little voice in the back of my head saying that buying a home was the path a real grown-up takes. And if you've ever had your parents side-eye your rent payment, you know exactly what I'm talking about.
A friend of mine, who is in her 40s (she’ll kill me for saying that), is a high earner, financially savvy, married mother. But she still hears it from her dad. She’s renting in Williamsburg, Brooklyn, for $7,000 a month. She has a beautiful two-bed, two-bath with an amazing private rooftop balcony. The location is ideal with beautiful sunset views, and all the maintenance is handled by her landlord—zero stress. But her dad is absolutely horrified. He says, “You just don’t do that.” To him, homeownership equals success, and renting is pretty much a financial failure.
I should mention that there are some people for whom owning is a good decision, but there are also some big red flags to be aware of in the home-buying process. I’ll tackle those in the next episode.
Back to my friend—she doesn’t want a house. She doesn’t want to spend weekends at Home Depot fixing leaks, mowing a lawn, or dealing with surprise costs that magically appear right when you think everything is coasting along. But let’s be clear, owning a home isn’t just a financial decision. It’s a lifestyle choice. If you’re okay with HOA drama, surprise roof repairs, and spending thousands—just to “maintain your investment”—go for it. But I want to cut through the noise and get to the bottom of it: is buying a home actually a smart investment?
Contrary to popular belief, this is one of the biggest money myths we’ve all been sold. Let’s look at the math and see whether it actually checks out.
A couple of years ago, I came across an article in the New York Times about a young couple debating the renting versus buying decision. They wanted to, quote, “stop throwing money away on rent.” They had just welcomed a son, started growing their family, and wanted to know if buying would be a better investment. The article quoted a stat that blew my mind. Over the last 100 years, home prices—outside of bubble markets like New York or L.A.—have only appreciated by about 0.37% per year, after inflation. Let me say that again: home prices outside of bubble markets have only appreciated 0.37% per year after inflation. Your home isn’t the goldmine you think it is. And that’s before we factor in maintenance, property taxes, closing costs, and interest.
Let’s break it down. What’s the real cost of buying a home? Let’s say you buy a $500,000 home with a 20% down payment. You put $100,000 down and take out a 30-year mortgage at 7% interest. Over the next 30 years, you’ll pay around $700,000 in interest alone. That means your $500,000 home—yes, the one you negotiated to get into for half a million—actually costs you $1.2 million. I’m going to pause for a second. Imagine buying a $50,000 car and realizing you actually paid $120,000 for it. That’s essentially what happens with a mortgage—but on a much bigger scale.
So, I know what you’re thinking: “My home will appreciate.” Okay. Let’s say your home appreciates at 4% per year, which is generous historically. In 30 years, your home might be worth $1.6 million. Sounds like a win, right? Except you’ve paid $700,000 in mortgage interest. You’ve spent hundreds of thousands on property taxes, maintenance, and repairs. And when you sell, you’ll fork over tens of thousands in closing costs. Let’s not forget that $1.6 million in 30 years is not going to be worth what $1.6 million is today. Inflation will eat at that appreciation.
So, what’s the takeaway here? Don’t listen to the noise. If you hear people say that renting is throwing money away, remind them that a big chunk of their mortgage payment is also thrown away because it doesn’t go toward actually owning anything. Interest: gone. Property taxes: gone. Maintenance: gone. By the time you sell, you’re not actually making a massive profit. You’re simply getting back the money you spent over decades, while your renter friend was investing, traveling, and not stressing about burst pipes.
So then you might say, “But my home is my retirement fund.” I hear this one all the time. When I retire, I’ll just sell my home, cash out, and have all that money. Except to cash out, you have to sell your home. And when that time comes, you may not want to. In fact, most people don’t want to, and it comes as a shocker to them that in order to access their cash, that’s their only choice. By this time, maybe you’re settled, your kids love coming back to their childhood home, and you don’t want to move just to access your money. So then what do you do? Take out a home equity loan? That’s just taking on new debt in retirement. Or worse, you may be forced to sell when the market isn’t on your side. For most people, your home shouldn’t be your retirement plan. It’s just a place to live.
So is there a smarter alternative if you're thinking about it as an investment? Let’s look at what would happen if you rented instead. Let’s run the numbers and actually look at them.
Instead of buying, you invest that $100,000 down payment. Historically, the stock market returns around 7% per year. In 30 years, that $100,000 grows to over $761,000. And if you invested just half of what you would put toward mortgage interest, you're now looking at millions of dollars in growth. Not dollar for dollar, but actual growth. And unlike home equity, your investments stay liquid, meaning you can access them whenever you want. No selling your home required.
So at the end of the day, whether you rent or own, you're always paying for housing. The question isn’t, “Am I wasting money?” It’s, “What am I getting in exchange for my housing costs?” Renters get flexibility, predictable costs, and zero unexpected expenses. Homeowners get equity, but at a much higher premium than most people realize. It’s not bad; I’m just saying it’s a much higher premium than people realize.
So when you actually break down the numbers, renting versus buying isn’t nearly as different as you’ve been led to believe. My point is, if you love renting, if you love flexibility, own that decision. You're not making a mistake. You’re making a choice. And that’s what smart money moves are all about. The smartest move is the one that aligns with your lifestyle. If you love renting, keep renting. If you love the idea of homeownership, go for it. But just don’t buy a home because you think it’s the only way to build wealth, or because you think it’s a smart investment. Stop letting people guilt-trip you into thinking you’re doing something wrong. The math simply doesn’t support that statement. Renting is not lighting your money on fire, tossing it out a window, or throwing it away—or any other version of that sentiment you’ve heard and will likely continue to hear.
So if you love renting, keep renting. If you love homeownership, continue to hear. It’s simply another way to pay to live. And if it works for you, that’s really all that matters.
If this episode has helped take some of the pressure off for you renters out there, please share it with a friend who needs to hear the same. All right, guys, see you next time. Bye-bye.
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