‘People think renting is for losers,’ but it’s not your fault you can’t afford a house, says self-made millionaire

Ramit Sethi, self-made millionaire and Netflix star “how to get richexplains that young Americans have been “placed in an untenable position” when it comes to buying a home. The prices are too high for many, and yet it’s still the epitome of the American dream.

Home ownership is also the key to getting rich, say financial experts. So when they can’t afford to buy, they feel like failures, which can have repercussions throughout their financial lives.

“Deep down, people believe that renting is for losers. They were told that to succeed in America, you had to buy a house,” says Sethi. Fortune. “Every day they wake up and they feel really bad. I don’t want you to feel bad.

It’s become one of the personal finance expert’s hottest and most controversial claims: “Leasing can be a phenomenal financial choice.” Home ownership can be a good decision for some, he says, but it shouldn’t be seen as just an investment when it’s more of a lifestyle choice for most.

From a purely financial standpoint, it’s possible to make more investments while renting, Sethi says. People often compare the mortgage to their monthly rent to justify their ownership, but that doesn’t take into account all the other costs of ownership, including closing costs, utilities, maintenance, insurance, taxes, etc. In his view, this means that home ownership can quickly become a “bad” investment, depending on your financial situation.

Much of Sethi’s work as a personal finance expert — in addition to writing books and hosting the Netflix show, Sethi produces a weekly financial podcast to help couples manage their money — helps people overcome the money myths they’ve been taught to get what they really want out of life.

For example, Sethi suggests those who want to buy a house as soon as possible write down those feelings and question them. Why is it necessary to buy a house now? Where does the message come from?

“Americans are really good at making decisions that they think will make them happy but will make them deeply unhappy. ‘Let me destroy my social network and move to the suburbs and take on insurmountable debt to become a homeowner,’ he says. “You know we don’t have to do that?

He also suggests reframing the rental in your mind. Is it really “throwing money” or does it fulfill a need you have, which is to have a place to live.

And of course, run the numbers. Sethi says that because of the emotional baggage that comes with buying a home, so many people don’t consider what they can actually afford when it comes to their biggest purchase ever.

“People spend more time comparing the price of soup at the grocery store than understanding an amortization schedule,” he says, referring to the tool that shows you how much you’ll pay in principal and interest over time.

“I refuse to accept you making a seven-figure purchase just because your mom, dad, or uncle told you real estate just keeps going up,” he continues. “That’s not true and you have to understand the numbers.”

Sethi encourages people to define their own “A Rich Life” or how they would ideally live, rather than just ticking someone else’s boxes. Want to retire in your thirties? Try all the new restaurants in town? Create a heritage to pass on to your children? Do you travel half the year?

Be clear on the details and ask yourself if home ownership fits into this. And it very well could – Sethi says owning a home doesn’t always create wealth, but it does have profound lifestyle implications. Perhaps you want to design a space to share with your spouse and children, provide accommodation for your parents, or simply the stability that comes with owning a home. It works too, as long as you know what you’re getting into and it aligns with your values.

“What do you want? Most of us have never thought about it,” he says. “Be thoughtful and intentional about it.”