Real estate: 3 reasons why owners are richer

“Whoever has money often owns real estate. But it also applies: If you own real estate, you often have money. In fact, real estate seems to be the source of wealth. There are three reasons behind this.

Real estate buyers have to bring a lot of money with them. Without sufficient reserves, the dream of owning a home cannot be realized. Right now, in view of the sharp rise in interest rates on loans, houses or apartments have become unaffordable for many, as we described in a large analysis. What is much more exciting, however, is that the connection between real estate and money is also true the other way round: whoever owns real estate often also has money.

But is there really a causal connection behind it, so is real estate the cause of wealth – and not just a side effect?

The leverage effect of real estate investments

Of course, it also plays a role that the prices of residential real estate have risen massively in the past ten boom years - up to the first half of 2022.

Real estate owners achieved high increases in value. Because real estate is traditionally bought to a large extent on credit, this brings owners a particularly strong increase in assets. Because they achieve the entire increase in value, but only raised a smaller part of the purchase price from their own capital. 

If you only spend 100,000 euros in savings for a 500,000 euro property, you can achieve 100 percent profit on your own investment if the price of the property increases by 20 percent. 

It's just stupid that this lever also works in the other direction: If you lose 20 percent in value, your own investment would be practically ruined.

But in the positive scenario, a high return remains even after deducting the interest on the loan. Some coaches and gurus, who want to help others to get rich quick, therefore see real estate investments as a particularly attractive investment strategy.

However, this increase in wealth, which is directly linked to real estate, alone cannot explain the differences between real estate owners and people who do not own real estate. There is another, even more profound factor, as shown by a study by the Empirica research institute commissioned by the LBS Federal Office in Berlin on “Homeownership in Germany”. According to this, the acquisition of owner-occupied residential property is “tantamount to setting the course”. It leads “to structurally different life plans and wealth paths”.

Owners and self-users of the property save more than twice as much

That sounds comprehensive, but also abstract. The study reads that what is meant is that home ownership is associated with a voluntary or at least implicitly desired obligation to save. In order to illustrate this effect, the savings behavior within the same income brackets was evaluated – separately for owners of owner-occupied living space (“owners”) and for tenants. 

This shows that "the savings rates of owners in all phases of life are always twice as high as for tenants of the same age and in the same income bracket," writes study author Reiner Braun from Empirica.

Households with a monthly net income of between 2,000 and 3,000 euros were examined in detail. Broken down into age groups, it was then shown that households from under 40 year olds made the highest savings, both for owners and for tenants. The monthly savings for tenants in this age group was a good 200 euros. For self-users, on the other hand, it was around 500 euros, i.e. 300 euros more. Expenditure on property maintenance and repayment of home loans - both of which contribute to wealth creation - seem to simply add to other savings efforts, without homeowners saving less elsewhere.

  This effect continues in older households, except that expenditure on maintenance and loan repayments gradually decreases. Only in pensioner households from the age of 64 does the saving behavior differ significantly from the other age groups (both among tenants and among owner-occupiers), which fits well with a normal life plan with a savings and dissaving phase.

According to the study, the purchase of residential property "as a result curbs one's own impatience or even unreasonableness and moodiness". That sounds a bit old-fashioned and suits the study client, a building society.

It tastes best at home

However, the study also determines how owner-occupied households accomplish this savings feat. The spending behavior of the youngest age group of 30 to 44-year-olds with a household net of between 2,000 and 3,000 euros is evaluated in detail on the basis of official statistics (the income and consumption sample from the Federal Statistical Office, with data from 2018).

This shows which items owner-occupiers spend more money on than tenants - and where less. Structural differences between the two groups that have nothing to do with the type of household - such as the number of children - were eliminated. 

Self-users achieve the greatest savings with food and drinks away from home. They spend 32 percent less on it than tenants and achieve 14 percent of their total "underspending" with this item alone. With 48 percent less spending than tenants, owner-occupiers are even more limited when it comes to “external transport services”, such as monthly tickets for local public transport. These ultimately account for eleven percent of their reduced expenditure. The expenses are also lower for package tours (-39 percent compared to renters), which results in nine percent of the reduced expenses.

Is it financially disadvantageous to rent?

However, owner-occupiers are also more willing to spend on a few items, such as insurance (66 percent more, which accounts for 13 percent of the additional expenses) and furniture and furnishings (43 percent more than renters, 12 percent share of the additional expenses). The bottom line is that their consumer spending at a comparable income level is significantly lower, as described.

There also seems to be some changes over time. In the past, for example, owner-occupiers would have restricted themselves when it came to car expenses. However, this seems to be less the case now, says Reiner Braun from Empirica. Perhaps this is due to the trend towards living in the surrounding area, which often still requires a car as a means of transport, says Braun.

In addition to the increase in assets due to rising real estate prices and the greater efforts to save by owner-occupiers, there is a third advantage that brings asset growth. 

While renters' housing costs increase over the course of their lives, owner-occupiers can continuously reduce their housing costs. 

In the income class with a household net of 2,000 to 3,000 euros, the monthly burden for owner-occupiers, including interest and repayments, is still an average of 97 euros more than for tenants under the age of 40. This is not surprising: unlike the tenants, the owner-occupiers form real estate assets - so the expenses cannot be compared one-to-one.

From the age of 40, however, the ratio is reversed: self-users now pay less. And with each older class of household, the advantage increases. In the age group from 64 years your advantage is on average 203 euros per month. In large cities with more than 500,000 inhabitants, it is even an average of 234 euros that owner-occupiers “save” monthly on housing costs compared to renters.

Owner-occupiers also pay lower ancillary housing costs per square meter. They live more often in detached and semi-detached houses, where there are typically no expenses for a caretaker or an elevator - unlike in a typical apartment building. However, because owner-occupiers typically live in larger areas (according to the study, the difference is around 40 square meters on average), they still pay a bit more in ancillary costs, both “cold” ancillary costs and heating costs. Although the value per square meter is smaller, the number of square meters is correspondingly larger - and the latter effect predominates. However, because the owner-occupiers can save on the rent and reduce their loan expenses over the course of their lives, the bottom line is that there is an advantage in terms of housing costs.

When renting is a financial disadvantage

So is it financially disadvantageous to rent? The study does not allow this conclusion. To answer this question, ownership and renting must be compared comprehensively. After all, owners also tie up a lot of capital in their property, while tenants do not. The tenants can therefore theoretically invest more capital away from the real estate market and ideally achieve high returns, for example with shares. 

We have described here how buying and renting can be meaningfully compared.

However, the study indicates that in reality tenants do not use their greater financial leeway. 

With a comparable income, they spend more on consumption instead of investing the money that is not needed for interest and repayment of a loan. And when it comes to saving, tenants invest more conservatively, at least in the income bracket considered by the study with a household income of EUR 2,000 to 3,000: the share of savings accounts among tenants is higher in practically all age groups than among owner-occupiers. When it comes to the share quota, the owners are almost always in front.

It is possible that the decision to buy a property is actually a stepping stone: it goes hand in hand with a willingness to make systematic, long-term investments at an early stage. And that shows not only in your own four walls, but in all areas of life.”

Nenaudokite dirbtinį intelektą (A.I.) tam, kad sukčiauti mokykloje. Tai geriau naudotina, kad studijuoti

„Generatyvaus A.I. įrankiai gali komentuoti ilgus dokumentus, kurti korteles ir rengti praktines viktorinas.

Praėjusią savaitę aptariau, kaip jūsų pokalbių robotą paversti gyvenimo treneriu. Dabar pereikime prie srities, kurioje daugelis eksperimentavo su A.I. nuo praėjusių metų: švietimas.

„Generative A.I.“ specialybė yra kalba – atspėti, kuris žodis bus sekantis – ir studentai greitai suprato, kad, rašydami esė, gali naudoti „ChatGPT“ ir kitus pokalbių robotus. Dėl to daugelyje klasių susidarė nepatogi situacija. 

Pasirodo, nesunku pagauti, apgaudinėjant su generatyviuoju A.I. nes jis yra linkęs išgalvoti daiktus, reiškinius, žinomus, kaip „haliucinacijos“.

Tačiau generatyvus A.I. taip pat gali būti naudojamas, kaip studijų asistentas. Kai kurios priemonės išryškina reikalingus ilgų tyrimų rezultatus ir netgi atsako į klausimus apie medžiagą. Kiti gali surinkti mokymosi priemones, pvz., viktorinas ir korteles.

Reikėtų nepamiršti vieno įspėjimo: studijuojant itin svarbu, kad informacija būtų teisinga, o norėdami gauti tiksliausius rezultatus, turėtumėte nukreipti A.I. įrankius, skirti sutelkti dėmesį į informaciją iš patikimų šaltinių, o ne gauti duomenis iš viso žiniatinklio. Toliau aprašysiu, kaip tai padaryti.

Tyrimas

Pirmiausia panagrinėkime vieną iš bauginančių studijų užduočių: ilgų straipsnių skaitymą ir komentavimą. Kai kurie A.I. įrankiai, tokie, kaip Humata.AI, Wordtune Read ir įvairūs „ChatGPT“ papildiniai, veikia kaip tyrimų pagalbininkai, kurie apibendrins dokumentus.

Man labiau patinka Humata.AI, nes jis atsako į jūsų klausimus ir rodo svarbiausius elementus tiesiai šaltinio medžiagoje, todėl galite dar kartą patikrinti tikslumą.

Svetainėje Humata.AI įkėliau mokslinio tyrimo straipsnio apie išmaniųjų laikrodžių tikslumą, stebint kardio treniruotes PDF failą. Tada paspaudžiau mygtuką „Klausti“ ir paklausiau, kaip „Garmin“ laikrodžiai pasirodė tyrime. Jis slinko žemyn iki atitinkamos dokumento dalies, kurioje paminėta „Garmin“, akcentavo ir atsakė į mano klausimą.

Man įdomiausia buvo, kai paklausiau roboto, ar teisingai supratau straipsnį – kad vidutiniškai nešiojami įrenginiai, tokie, kaip Garmins ir Fitbits, gana tiksliai stebėjo kardio treniruotę, tačiau kai kuriems asmenims buvo labai klaidingi. „Taip, tu teisus“, - atsakė botas. Po to buvo pateikta tyrimo santrauka ir išvardyti puslapių numeriai, kuriuose buvo paminėta ši išvada.

Studijuojant

Generatyvus A.I. taip pat gali padėti įsiminti. Nors bet kuris pokalbių robotas generuos korteles arba testus, jei įklijuosite studijuojamą informaciją, aš nusprendžiau naudoti „ChatGPT“, nes jame yra papildinių, generuojančių pagalbines studijų priemones, paimamas iš konkrečių žiniatinklio straipsnių ar dokumentų.

(Naudoti papildinius gali tik tie prenumeratoriai, kurie moka 20 dolerių per mėnesį už „ChatGPT Plus“. Kaip juos naudoti, paaiškinome ankstesniame naujienlaiškyje.)

Norėjau, kad „ChatGPT“ sukurtų korteles, kad galėčiau išmokti kinų kalbos žodžių. Norėdamas tai padaryti, įdiegiau du papildinius: nuorodų skaitytuvą, kuris leidžia man nurodyti robotui naudoti duomenis iš konkrečios svetainės, ir MetaMentor, papildinį, kuris automatiškai generuoja korteles.

„ChatGPT“ prietaisų skydelyje pasirinkau abu papildinius. Tada parašiau šį raginimą:

Veikti kaip dėstytojas. Esu asmuo, kurio gimtoji yra anglų kalba, mokausi kinų kalbą. Paimkite žodyno žodžius ir frazes iš šios nuorodos ir sukurkite kiekvienos kortelės rinkinį: https://preply.com/en/blog/basic-chinese-words/

Maždaug po penkių minučių robotas atsakė pateikdamas nuorodą, kur galėjau atsisiųsti korteles. Jie buvo būtent tai, ko prašiau.

Tada norėjau, kad mano mokytojas mane apklaustų. Pasakiau ChatGPT, kad studijuoju egzaminui raštu, kad gaučiau motociklo vairuotojo pažymėjimą Kalifornijoje. Vėlgi, naudodamas nuorodų skaitytuvo papildinį, įklijavau nuorodą į naujausią Kalifornijos D.M.V. motociklų vadovą (svarbus žingsnis, nes kelių eismo įstatymai įvairiose valstijose skiriasi, o taisyklės retkarčiais atnaujinamos) ir paprašiau atlikti testą su keliais atsakymų variantais.

Botas apdorojo vadove esančią informaciją ir parengė viktoriną, vienu metu užduodamas man penkis klausimus.

Galiausiai, norėdamas patikrinti savo supratimą apie temą, „ChatGPT“ nukreipiau užduoti man klausimus, nepateikiant atsakymų su keliais atsakymų variantais. Botas atitinkamai prisitaikė, ir aš įveikiau viktoriną.

Jei būčiau mokykloje, norėčiau turėti šiuos įrankius. Ir, tikriausiai, jie būtų pelnę geresnius pažymius su jais, kaip studijų palydovais.

Kas toliau?

Kitą savaitę, paskutinėje šio informacinio biuletenio dalyje, paimsime viską, ką išmokome, ir pritaikysime tai praturtindami laiką, kurį praleidžiame su savo šeima."

Rasti reikiamo teksto yra teigiamas dalykas. Kurti korteles jums – nelabai.

Kai ką nors studijuoji, turi įsitraukti į medžiagą, kuo daugiau – tuo geriau.

Taigi, labai patartina patiems pasidaryti asmenines korteles. Įvairių šaltinių lyginimas, perrašymas savais žodžiais, stengimasis, kad tekstas būtų kuo glaustesnis, bandymas net versti iš vienos kalbos į kitą, spręsti realias gyvenimo problemas, atsakyti į viktoriną – viskas, kas verčia giliau įsitraukti į tai, ką studijuojate, turi didelę vertę.

Don’t Use A.I. to Cheat in School. It’s Better for Studying.

“Generative A.I. tools can annotate long documents, make flashcards, and produce practice quizzes.

Last week, I went over how to turn your chatbot into a life coach. Let’s now shift into an area where many have been experimenting with A.I. since last year: education.

Generative A.I.’s specialty is language — guessing which word comes next — and students quickly realized that they could use ChatGPT and other chatbots to write essays. That created an awkward situation in many classrooms. It turns out, it’s easy to get caught cheating with generative A.I. because it is prone to making stuff up, a phenomena known as “hallucinating.”

But generative A.I. can also be used as a study assistant. Some tools make highlights in long research papers and even answer questions about the material. Others can assemble study aids, like quizzes and flashcards.

One warning to keep in mind: When studying, it’s paramount that the information is correct, and to get the most accurate results, you should direct A.I. tools to focus on information from trusted sources rather than pull data from across the web. I’ll go over how to do that below.

Research

First, let’s explore one of the most daunting studying tasks: reading and annotating long papers. Some A.I. tools, such as Humata.AI, Wordtune Read and various plug-ins inside ChatGPT, act as research assistants that will summarize documents for you.

I prefer Humata.AI because it answers your questions and shows highlights directly inside the source material, which allows you to double check for accuracy.

On the Humata.AI website, I uploaded a PDF of a scientific research paper on the accuracy of smartwatches in tracking cardio fitness. Then I clicked the “Ask” button and asked it how Garmin watches performed in the study. It scrolled down to the relevant part of the document mentioning Garmin, made highlights and answered my question.

Most interesting to me was when I asked the bot whether my understanding of the paper was correct — that on average, wearable devices like Garmins and Fitbits tracked cardio fitness fairly accurately, but there were some individuals whose results were very wrong. “Yes, you are correct,” the bot responded. It followed up with a summary of the study and listed the page numbers where this conclusion was mentioned.

Studying

Generative A.I. can also help with rote memorization. While any chatbot will generate flashcards or quizzes if you paste in the information that you’re studying, I decided to use ChatGPT because it includes plug-ins that generate study aids that pull from specific web articles or documents.

(Only subscribers who pay $20 a month for ChatGPT Plus can use plug-ins. We explained how to use them in a previous newsletter.)

I wanted ChatGPT to create flashcards for me to learn Chinese vocabulary words. To do this, I installed two plug-ins: Link Reader, which let me tell the bot to use data from a specific website, and MetaMentor, a plug-in that automatically generates flashcards.

In the ChatGPT dashboard, I selected both plug-ins. Then, I wrote this prompt:

Act as a tutor. I am a native English speaker learning Chinese. Take the vocabulary words and phrases from this link and create a set of flashcards for each: https://preply.com/en/blog/basic-chinese-words/

About five minutes later, the bot responded with a link where I could download the flashcards. They were exactly what I asked for.

Next, I wanted my tutor to quiz me. I told ChatGPT that I was studying for the written exam to get my motorcycle license in California. Again, using the Link Reader plug-in, I pasted a link to the California D.M.V.’s latest motorcycle handbook (an important step because traffic laws vary between states and rules are occasionally updated) and asked for a multiple-choice quiz.

The bot processed the information inside the handbook and produced a quiz, asking me five questions at a time.

Finally, to test my grasp of the subject, I directed ChatGPT to ask me questions without presenting multiple-choice answers. The bot adapted accordingly, and I aced the quiz.

I would have loved having these tools when I was in school. And probably would have earned better grades with them as study companions.

What’s next?

Next week, in the final installment of this how-to newsletter, we’ll take everything we’ve learned and apply it to enriching the time we spend with our families."

Finding text that you need is a positive thing. Making flashcards for you – not so much.

When you are studying something, you have to engage the material, the more – the better.

So making personalized flashcards by yourself is highly advisable. Comparing different sources, rewriting in your own words, trying to make it most concise, even translating from one language to another, solving real life problems, answering the quiz – everything that forces you to engage, what you are studying, has high value.

EU Leans on Businesses to Trim Booming Food Profits

"The next phase in the war against inflation is taking shape in Europe, where governments are actively cajoling businesses to cut prices on everything from pasta to chicken. Their argument: Profits are too high.

The European Union's statistics agency Friday said consumer prices in the 20 countries that share the euro were 5.5% higher than a year earlier, a decline from the 6.1% inflation rate recorded in May, and the slowest increase since the start of 2022.

However, that slowdown in inflation largely has been because of falling energy prices. The core rate of inflation -- which excludes volatile items such as energy and food -- rose to 5.4% in June from 5.3% in May. More concerning for households, food prices continued to rise rapidly, albeit more slowly than in recent months.

After last year's steep energy-price rises normalized, sharp increases in food bills this year have alarmed European governments. Now they are pushing back by putting pressure on grocery stores and food producers to limit or reverse price rises.

Those moves fall short of the price controls that governments introduced in the early 1970s, but edge Europe toward a more interventionist approach on inflation than the U.S., where the pace of price rises has slowed more sharply during recent months.

In France, where food prices have increased by more than 14% in the past year, the government is trying to persuade the country's largest industrial companies to lower their prices.

"We will not allow big industrial companies to make undue margins," French Finance Minister Bruno Le Maire said, adding that he was ready to name and shame companies unwilling to pass on lower costs to consumers.

In the U.K., leading retailers were asked Tuesday to account for their profits before a panel of lawmakers. Wednesday saw the government's treasury chief meet with competition and other regulators to find ways to tackle what is known as the cost-of-living crisis.

The Competition and Markets Authority will publish the results of its investigation into food prices in July. The Bank of England will meet with food producers ahead of its September decision on interest rates.

"We are working hard to halve inflation this year," said Jeremy Hunt, the treasury chief. "Businesses must play their part, too, and I will keep a watchful eye on the progress they make."

So far, only Croatia and Hungary have implemented price caps. In September 2022, Croatia's government imposed a 30% cut in the prices of oil, flour, sugar, pork, chicken and milk. Last week, Hungary's government announced the extension until August of caps on the prices of a similar range of food staples." [1]

 

And Lithuania? what you We are ancient Indo-Europeans, almost like from India. We worship sacred cows. They are called the margins of Maxima, SEBo and other such institutions.

 

1. World News: EU Leans on Businesses to Trim Booming Food Profits. Hannon, Paul;
Bisserbe, Noemie. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 01 July 2023: A.7.

ES spaudžia įmones, siekdama sumažinti klestintį maisto pelną

 

„Europoje formuojasi kitas karo su infliacija etapas, kur vyriausybės aktyviai vilioja verslus, kad jie sumažintų kainas viskam – nuo makaronų iki vištienos. Jų argumentas: pelnas per didelis.

 

     Europos Sąjungos statistikos agentūra penktadienį pranešė, kad vartotojų kainos 20-yje šalių, kurios dalijasi euru, buvo 5,5% didesnės nei prieš metus, tai yra nuosmukis nuo gegužę užfiksuoto 6,1% infliacijos lygio ir lėčiausias augimas nuo 2022 metų pradžios.

 

     Tačiau infliacijos sulėtėjimą daugiausia lėmė mažėjančios energijos kainos. Pagrindinis infliacijos lygis, neįskaitant kintančių dalykų, tokių, kaip energija ir maistas, birželio mėnesį pakilo iki 5,4% nuo 5,3% gegužę. Namų ūkiams labiau rūpėjo tai, kad maisto kainos toliau sparčiai kilo, nors ir lėčiau, nei pastaraisiais mėnesiais.

 

     Normalizavus praėjusių metų staigų energijos kainų kilimą, staigus maisto produktų kainų padidėjimas šiais metais suneramino Europos vyriausybes. Dabar jos stumia atgal, darydamos spaudimą bakalėjos parduotuvėms ir maisto gamintojams apriboti arba pakeisti kainų kilimą.

 

     Šie žingsniai neatitinka kainų kontrolės, kurią vyriausybės įvedė aštuntojo dešimtmečio pradžioje, tačiau Europą skatina labiau intervencinis požiūris į infliaciją, nei JAV, kur kainų kilimo tempas pastaraisiais mėnesiais sulėtėjo dar labiau.

 

     Prancūzijoje, kur maisto kainos per pastaruosius metus išaugo daugiau nei 14 proc., vyriausybė bando įtikinti didžiausias šalies pramonės įmones sumažinti kainas.

 

     „Mes neleisime didelėms pramonės įmonėms daryti pernelyg didelių maržų“, – sakė Prancūzijos finansų ministras Bruno Le Maire'as ir pridūrė, kad yra pasirengęs įvardyti ir sugėdinti bendroves, nenorinčias perkelti mažesnių sąnaudų vartotojams.

 

     Jungtinėje Karalystėje pirmaujančių mažmenininkų antradienį buvo paprašyta atsiskaityti už savo pelną įstatymų leidėjų kolegijai. Trečiadienį vyriausybės iždo vadovas susitiko su konkurencijos ir kitomis reguliavimo institucijomis, siekdamas rasti būdų, kaip įveikti vadinamąją pragyvenimo išlaidų krizę.

 

     Konkurencijos ir rinkų tarnyba atlikto maisto kainų tyrimo rezultatus paskelbs liepos mėnesį. Prieš rugsėjį priimdamas sprendimą dėl palūkanų normų Anglijos bankas susitiks su maisto gamintojais.

 

     „Sunkiai dirbame, kad šiais metais infliacija būtų sumažinta perpus“, – sakė iždo vadovas Jeremy Huntas. „Verslas taip pat turi atlikti savo vaidmenį, todėl aš atidžiai stebėsiu jų daromą pažangą."

 

     Kol kas tik Kroatija ir Vengrija taikė viršutines kainų ribas. 2022 m. rugsėjį Kroatijos vyriausybė 30% sumažino aliejaus, miltų, cukraus, kiaulienos, vištienos ir pieno kainas. Praėjusią savaitę Vengrijos vyriausybė paskelbė iki rugpjūčio pratęsianti panašaus asortimento pagrindinių maisto produktų kainų viršutines ribas." [1]

 

O Lietuva? Ką jūs. Mes senoviški indoeuropiečiai, beveik kaip iš Indijos. Garbiname šventas karves. Jos vadinasi Maximos,  SEBo ir kitų tokių įstaigų maržos.

1. World News: EU Leans on Businesses to Trim Booming Food Profits. Hannon, Paul;
Bisserbe, Noemie. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 01 July 2023: A.7.