Is Homeownership Still Worth It? + Why Work-Life Balance Is a Myth

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1:31Welcome to Office Hours with Prop G. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. In case you missed it, Office Hours is now airing on Mondays and Wednesdays in the Prop G pod feed. You'll get double the dog, double the insight. Anyways, if you'd like to submit a question for next time, you can send a voice recording to officehoursofproftgymedia.com. Again, that's officehoursofproftgymedia.com or post your question on the Scott Galloway subreddit and we just might feature it in our next episode. Our first question comes from Reddit, user snapcracklepirate and asks, Hi, Scott.

2:07I live in one of the most expensive areas in California. Both my husband and I were born here with two sets of grandparents and a young child. leaving isn't really an option. It's a bit surreal to be renting at 35, but here we are. The twist in our situation, we'll likely inherit two homes in this area down the line. So my question is, how should we think about renting versus buying in the context of a future inheritance? Is it more rational to buy anyway, to start building equity despite the higher monthly cost, or keep renting, invest the down payment in the market, and effectively wait for eventual homeownership through inheritance?

2:41put differently, is chasing home ownership in a high-cost market still a smart financial move or just a legacy belief our generation hasn't let go of yet? Huh. I just wouldn't plan your life around an expected inheritance. I would assume you're not going to inherit something and try and shape your decisions and ambitions around that because unfortunately, death is persnickety and you don't know when you're going to inherit stuff. So first off, when they've done studies on homeownership as an asset class, it has not outperformed and sometimes on many measures has underperformed other asset classes.

3:17But why is it generally speaking a good idea to buy a home in general? It's generally speaking a good idea. Why? Because it's forced savings. People will cancel their Netflix or they'll sell a stock if they get in trouble or need the money. People will very rarely miss their mortgage payment and get evicted from their home. So it's forced savings forces you to be a bit more responsible. And also the earnings or the appreciation, the capital appreciation of home grows tax deferred until you sell it, at which point I would suggest, depending if it's not your prime residence, you take advantage of$500 ,000 tax deduction for two people.

3:57If it's just real estate, put it in an LLC and then you can do a 1031 exchange. Anyways, I think about taxes a lot. So is it the reality is buying versus renting is situational. Generally speaking, in the Bay Area and in New York, it is much better to rent. The statewide income needed to qualify for a mid-tier mortgage has grown much faster than median household income. Only about 23 percent of California households likely qualify for a mid-tier home mortgage today, down from 31 percent in 2019. So, look, I've done really well on homes, but it seems like home prices in the Bay area at three and a half times monthly rent for a comparable two-pedroom home are pretty elevated.

4:37So your situation of mortgage payment two times rent is actually conservative by California's most expensive standards. And California's statewide price-to-rent ratio is approximately 33.2, well above a threshold of 20. That signals renting is financially superior choice on a monthly cost basis. See above, it's probably better to rent in the Bay Area. A ratio below 15 favors buying, a ratio above 20 favors renting. There's an interesting study on buying versus renting. A 2026 10-year rent versus buy wealth study modeled 250 U.S. cities using Zillow home values and a 10.35 % S &P benchmark return.

5:13Home ownership came out ahead in 250 cities when assuming a renter only invested the down payment, but when assuming the renter invested both the down payment and the monthly savings from cheaper rent, buying one in fewer cities. And this has been after, and I think this data is a little fucked up because I think this is probably after an unprecedented run up in housing prices due to regulation from incumbents making harder to build in COVID. Case Schiller, or I forget his name. Is it Schiller? Anyways, basically, it's done a lot of research here saying that as an asset class, it's the same or less in most instances.

5:49Anyways, important advice for your situation, check the inheritance tax math. California's Prop 13 caps property taxes at around 1 % of the original purchase price. So a home bought for 200 ,000 decades ago might only carry 2 ,000 a year tax bill, even if it's not worth 2 million. But under Prop 19, passed in 2021, heirs only get to keep that low rate if they move into the inherited home as their primary residence within a year. Otherwise, the county resets the tax to current market value, potentially five to 10 times increased oversight. So in other words, if and when you inherit this home, think hard about moving in within 12 months to maintain that advantageous tax status.

6:30So what you look at is yields. And basically, if a home costs a million dollars and you can generate$50 ,000 in rental income, that's a 5 % yield. The yields in places like San Francisco and New York are very low, meaning it's a better deal to rent than to buy. If you were in Nashville or Lubbock, Texas, I would err on the side of saying no, buy. So don't feel as if you need to buy to be an adult. Sometimes renting is the way to go. Chasing homeownership for some sort of psychological benefit when it doesn't make any sense is not a great idea. I would argue that I don't know what home prices are like in the barrier, but I imagine there's someone inflated given the AI boom.

7:11So I don't know. Look, unless you're going to get a ton of psychic reward from buying right now, I would probably say hold off and also don't feel ashamed to rent versus own. But I would plan your life assuming those people don't ever pass away. And it was, again, another good problem. Thanks for the question. Question number two. Hi, Scott. This is Adam from Queensland, Australia. I wanted to ask about your idea of men adding surplus value, especially as fathers trying to be better dads than their own. For context, I'm traditionally a high school phys ed and science teacher. But a few years ago, we started breeding edible insects and running education programs in schools to teach kids about sustainability, food systems, and STEM in a more engaging way than we felt we could in our traditional roles.

8:02So we didn't have to take on debt for that startup. We've been selling repurposed wine barrels as bar tables, ice baths, and hot tubs. and this has become its own great business and I'm super proud of the work that we do. My dilemma is this, I think we get paid really well as teachers, in my state anyway, although that doesn't make me popular with other teachers. But right now, I'm earning less, I'm working way harder and I'm not around my family as much as I would be if I was just in the classroom. But I've never been so motivated and driven in my work and when I am home, I feel I'm more present and engaged as a dad and feel like I'm chasing something bigger for my family.

8:46My dad certainly wasn't absent, but he did work a lot and he also provided really well for us financially. And I'm kind of stuck in between. I'm more present, but the financial side is still a bit of a gamble. As someone who's been open about how hard they worked, how would you look at my situation and think about adding surplus value to your family when there's a trade-off between between being present and engagement and finances. Lots of love to you and the team, mate. You guys were my top pod of 2025, and I wish I was as cool as Ed Elson. Cheers. Thanks, Adam, from Queensland. If Australia wasn't so far, we'd all live there.

9:25I try and go there every couple of years, and every time I go down there, I think these are my people. I think you're struggling with what a lot of men struggle with, and that is balancing being a good dad, a good partner, a good neighbor in trying to be a good provider and the sacrifice that takes in an increasingly competitive society. And not only that, the self-esteem or the lack of self-esteem that comes along with being more economically viable or less, which men are disproportionately evaluated on, but at the same time trying to be a good dad. So the common or the conventional narrative out there right now is sacrifice economic upside to spend more time with your kids.

10:06And I don't buy it. I was a bit of a workaholic. I could have sacrificed some time. I get all of my identity, unfortunately, at least until recently from my professional success or lack thereof. And also not growing up with money, which is so important to me, that I was willing to just work all the time. And at one point, I probably went five or 10 years too long working that hard. And it came at a cost. I always say, it cost me my hair, it cost me my first marriage, and it was worth it. Now, what do I mean by that? I think in a capitalist society, and is what sounds like maybe you're the primary breadwinner, I think you have an obligation to your family and to yourself to develop some economic security.

10:54And the trajectory you set for yourself professionally in your 30s and 40s, really your 20s, 30s, and 40s is just so important. I think of it similar to a launch, and that is a projectile or a rocket or Artemis or Saturn or the Falcon Heavy rocket expectorates 97 % of its fuel just getting out of the soupy low orbit. But then that speed can take it tens of thousands, if not hundreds of thousands of miles based on its trajectory and its speed when it gets into space on almost no fuel. So you want to burn a lot of fuel, my brother, in your 30s and 40s and really establish a nice professional and financial trajectory that will give you momentum into your 40s, 50s and 60s.

11:38And unless you're smart enough to be born to rich parents, there's no balance. There's just trade-offs. And the trade-off I took was to have less time with my family early such that I would have more time as they got older. I have a crazy amount of balance right now. I'm going to kick off in a couple hours and go to Selfridges and have dim sum with my kid. My oldest told me he likes Empire of the Sun. I'm going to try and get us tickets when they're here in London. You know, I can take a car out to his boarding school on Wednesday night and hang out with him. I can do a college tour with him and I'm already planning.

12:15He's going to UVA. I'm already plan to go to the UVA Berkeley game and bring a bunch of friends with me. I just have so much wonderful balance and time with loved ones right now, but it came at a price. I remember coming home when I'd been on the road for two or three weeks, meeting with clients all over the world. I mean, literally all over the world. My biggest clients were Audi and Samsung, do the math in terms of geography there. And just being really bummed out because the first thing I would do, I would go into the room at night and just look in on them sleeping. And I would notice they had physically grown.

12:48And then since the last time I saw them several weeks earlier, they were bigger. It would really bum me out. And I thought, am I, do I not get it? And I look back on it. And the reality is I'm glad I made the sacrifice because, and this isn't the way the world should be, but the way the world is, their healthcare, their ability, your ability to get them great education, your ability to help them out if they don't get a, you know, come out of the gates right out of school, your ability to do nice things given how long you're probably gonna live. I don't know. I've just, my advice is always establish economic trajectory.

13:28Do what you can to be with your kids and your partner. Obviously prioritize certain moments, certain events that you gotta be at. I'm flying back. I go to every yard of account lines. I'm flying back a few days early to go to my kids, what's it called? Speech day, which is awful. I've been before and I'm not even sure that means that much to them, but it just feels like I should be there for that. Anyway, I'm doing some virtue signaling right now. I think every TikTok and all your friends are gonna be generous with your money and decide you should spend more time with your family and your kids.

14:03And what I have found is that the sacrifices early on in the trajectory it established for me has given me a great deal of balance later in life. and the balance later in life is really important because, one, I didn't have the mojo. I don't have the mojo and the energy you have to really go at it. And so if I found myself now in a position where I was a bit financially anxious, it would put huge strain on my relationship with my partner and my kids. So in sum, it sounds to me like you have great judgment and you're doing the right thing. It's a very personal decision. You have to get alignment with your partner.

14:39Some people decide they don't want to do what I do. I'm not saying my way is the right way. It's just my way. And they want to move to a lower cost area, coach Little League, and prioritize family and church and not money. God love them. And they're very happy. That was not how I wanted to be. I wanted to have the money to live in New York and then London and have kids. And that is just a shit ton of money, which means a lot of sacrifice early on. A very personal decision. I think the world who doesn't need to pay your mortgage will advise you or have a bias telling you to spend more time with your family and sacrifice professional relationships.

15:16I don't think that's necessarily the default. Get alignment with your partner and also the sacrifice and the trajectory you establish now are really important for later in life. But again, these are very personal decisions. I don't think there's a right way. I think there's just your way. Very much appreciate the question. We'll be right back after a quick break.

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19:06Welcome back. Question number three comes from a listener who emailed us. Hey, Scott, I spent 27 years building and running a manufacturing company, burned out years before the sale, but kept going. I'm pure stubbornness. Now it's three years post close. I'm financially fine. Still a part owner, just enough involvement to be able to feel connected, but not enough to feel the heat. And I have absolutely no idea what to do with myself. To be clear, I'm not depressed. I don't miss the status or the importance. I generally love not grinding every day. The problem is I can't seem to get motivated by anything that's supposed to come next.

19:37Not my other business, not my other businesses, not the volunteer work. I plan for years, nothing. I have major ADD and I'm a serial entrepreneur, which means sitting still isn't in my genes. So what's the actual recovery arc look like for founders post-exit? Is there one? For context, full retirement is not an option. I know myself. If I go beach bum, I love to surf. I will go all the way beach bum. And I need an on-ramp back to purpose, not an extra ramp into oblivion. Any thoughts would be appreciated. This is a tough one. Look, I don't. The problem is you probably have exactly the wrong amount of money.

20:16And that is you don't have enough money to probably start a great nonprofit and have a foundation. and, you know, save the whales or, you know, cure malaria in Africa. But you don't have, but you have enough money such that you don't have to do anything. You don't have to take a job. I have a lot of friends who retired with, you know, a decent amount of money, but not enough money to really go large and give away money and do really crazy cool things. But enough money such that any offer that came their way wasn't quite good enough. and I'll give you my, you and I have sort of a similar arc. In 1999, I was, you know, 30, 34, and my company, Red Envelope, had filed to go public.

21:06I was about to sell my brand strategy firm profit for about 33 million, so I thought, oh, I'm done. I think my stake in Red Envelope, supposedly, at the IPO was going to be worth, I don't know, 30 or 60 million plus the, anyways, I thought I'm done. Back then having 20 or 30 million was more than enough. At least I thought, you know, I'm someone who like didn't want to tell my mom I'd lost a jacket because it cost 30 bucks growing up. But anyway, I thought I was done. So I left New York, joined the faculty at NYU, thought that's my passion. That's what I want to do. And then shit got real in 2000 with internet companies.

21:40and all of a sudden I was broke. And I sort of wandered the earth from 2000 to 2008 trying to find something to do. I did some activist investing with hedge funds. I taught, but I didn't go all in on teaching. And then I found, you know, I was just sort of roaming. I was just sort of lost, sort of just, I don't know, floundering for lack of a better term. But I tried new stuff, tried to do different things, tried to be very social, meet people, try and get deals going. and ended up, I thought, okay, I like teaching. I think I can make a decent living at it. And I went all in on teaching, which was different than investment banking or startups and built and ended up doing a research project on luxury brands and digital IQ.

22:24So I had the digital IQ index and it turned into a business. In other words, just get really engaged in something and try some things. Find something that's not, don't let perfect be the enemy of good. Find something you think you're good at and that you don't hate and go all in it. Go all in on it for two or three years and see if it works. And if it doesn't, you know, pull back and do something else. But the key is just getting on with something. Like the time to start is now, because if you're not careful, you can wake up. Time goes fast. You wake up, a lot of my friends have woken up and they're like 16.

22:57They're like, I got to get really serious about the next thing. And they like sold their company or cashed out or got fired from wherever it is, Goldman Sachs at 45. And they really haven't done a hell of a lot in 15 years. So find friends, meet with a lot of people, find out what deals they're working on, what they're doing. Find co-founders or co-partners to do stuff within. Tell people you're available, looking at projects. Don't be afraid to volunteer your time to help other people get shit going and see if there's a role there for you. In sum, be really social and lower your bar. Something doesn't have to be an eight or nine for you to get involved.

23:32make it six or seven or seven or eight and see if it turns into, you know, an eight or a nine. That's all for this episode. If you'd like to submit a question, please email a voice recording to officehours at PropGmedia.com. Again, that's officehours at PropGmedia.com. Or if you prefer to ask on Reddit, just post your question on the Scott Galloway subreddit, and we just might feature it in an upcoming episode. This episode was produced by Jennifer Sanchez and Laura Janair. Kami Rik is our social producer Brad Williams is our editor, and Drew Burrows is our technical director. Thank you for listening to the PropG Pod from PropG Media.