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One of my most popular concepts is Invisible Scripts, or the guiding beliefs we have that are so deeply embedded, theyre often invisible.

For example:

• Everyone should get a college degree
• I dont have any money, so I cant go to college
• Marry someone you love
• If you rent, youre throwing money away
• Online courses are SCAMS

Heres an overview of the Invisible Scripts concept. which many of my readers told me changed their lives more than anything else Ive written.

One of our Invisible Scripts is almost overwhelmingly powerful, causing people to make life-altering decisions for reasons they often cannot even grasp.

It is: Buying a house is the next step!

You see, you go to college get a good job buy a car meet a nice guy/girl then buy a house!

Right?

Interestingly, at least 30% of the I have a horrible financial problem emails I get are directly related to peoples mortgages.

And if youve read my book. you know that in Chapter 9, Im critical of people buying real estate because its a good investment or because theyre throwing money away on rent both of which are rarely true. I also cover some of the numbers on the Buying a House section of my site.

It turns out that Americans HATE to hear this.

In a recent article by James Altucher, one of the best writers anywhere, he writes about why entrepreneurs should not buy a house. What I really liked was how he dug into the psychology of owning a house. Predictably, the commenters hate him.

How often do we do something or want something without considering WHY we really want it? For example, if I were to say, Why do you want to buy a house? and you replied, Im tired of throwing money away on rent, I would reply: How exactly are you doing that? Can you show me the numbers? If you cannot do that, you are not ready to make the biggest purchase of your life, jackasses.

If you say Leverage, and I point out that leverage works both ways, you need to have an answer for that before you drop several hundred thousand dollars.

Finally, if you say For the tax benefits, then I would like to invite you to join to a community college class on financial math so that you can understand how the tax benefit really works.

Guys, I dont think Im asking too much. If youre about to make the biggest purchase of your lives, you need to understand the basic concepts of real estate. In fact, I hold you to a higher standard: You need to be at least intermediate, if not expert, for this expenditure that costs hundreds of thousands of dollars.

So while others (especially parents) might urge you to buy a house rates are so low right now! I hold you to a higher standard. I insist you do more than take catch phrases (I hate paying my landlords rent every month) and truly understand how real estate works.

For example if you pay $2,000/month for a mortgage, how much TCO (total cost of ownership) will you actually pay? Would it surprise you to learn that youll pay 50% more than your monthly mortgage in additional costs?

Most people would be shocked. But they take their shock out in the form of denial, not further digging. And 3 years from now, theyre saddled with a purchase that they feel cheated aboutbecause they never took the time to learn how it works.

Im not saying real estate is a bad purchase for everyone. But the vast majority of buyers do not understand how the math workson the biggest purchase of their lives.

Which brings me to todays Ask Ramit question from Naomi in New Zealand.

Ask Ramit: Should I invest in real estate or not?

“I would like to know about property. Im nearly thirty, and feel like I SHOULD own some property an apartment, or something. I have $38K saved up, so I could buy something, and possibly rent it out to cover the mortgage. Stocks dont feel so real to me, while property does. (Probably comes along with being an architect.) Im curious about how you would decide to buy property or not. 

Heres my response to Naomi:

Real estate might be right for you. It might not. But do not make the largest decision of your life because it’s something you “should” do.

Question: Out of curiosity, who here has gotten pressure to buy a house? What’s the subtle ways you’ve felt pressured? Was it a throwaway phrase, or a subtle intonation, or did someone outright blurt out, “You’re wasting money renting”? Leave a comment below I’m curious.

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