“I think the time to buy a house is when you need one.” —Charlie Munger

📘 Why It Matters: Make your investment decisions based on opportunity costs, not conventional wisdom. That’s a common theme in the careers of Charlie Munger, Warren Buffett, and other legendary investors.

🌍 Real-World Example: In 1952, Warren Buffett was a newlywed with $10,000 to his name. He faced a choice: buy a house or invest the capital.

He believed buying a house early would limit his ability to invest, and make him “like a carpenter who’s had his tools taken away.”
Buffett and his wife rented for four years until a home down payment was only 10% of his net worth.
Preserving capital allowed Buffett to earn much higher returns through investing than home appreciation.

🧠 Mental Model — Opportunity Cost from Microeconomics: The real cost of something is what you give up to get it. Every dollar you commit to one use cannot be deployed elsewhere. The true cost of any investment is measured against your next best alternative.

📅 Before committing capital, ask: (1) What will this asset earn or cost over 5 years? (2) What could the same capital earn in my best available alternative? (3) Is the difference worth the tradeoff?

📝 Franco’s Notes:

The point isn’t to avoid homeownership. It’s to make that choice consciously when it serves your financial goals, not because it’s what you’re “supposed” to do.
In 1952, post-war America heavily promoted homeownership as a marker of success. FHA loans and suburban growth incentivized buying rather than renting. Buffett’s decision went against the grain.

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