yes that is correct. Bond funds will decline in a rising interest rate environment. And yes, individual bonds (and CDs) will not decline if held to maturity.
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Thanks ucscuuw and others for explaining about the comparison between rent/own figures.
Iām trying to follow the Dave Ramsey approach of buying house in cash (or one with little, easily-paid-off mortgage) to provide security in later years. I can understand now the idea about keeping that $$ in a higher performing investment fund (a position enhanced by the low interest rates for mortgages).
But, when you are looking long term at security - wanting to have that roof over your head when older no matter what (only needing to keep $ for taxes, utilities, upkeep) - the ābuy a house in cashā approach seems to really meet that goal (no matter the nuance of the current investment climate). I think another benefit might be if one spouse has to go to a residential care facility - the house is a protected asset - wouldnāt be taken to pay for care.
I might be missing something but thatās the big picture, rather simple goal that Iām shooting forā¦
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Funny, you mention Dave Ramsey. The first time we met with our FA, after about 30 minutes she said, āOh, OK. Youāre a Dave Ramsey type.ā I knew enough about Dave Ramsey to know that she didnāt exactly mean that as a compliment. 
I totally get where you are coming from. But I also understand the question of why would you pay cash when you can borrow the money for 3% and likely make more than that in the market. A few weeks ago, I posted upthread about a friend who is using her house as an ATM and planned to refinance AGAIN to take equity out to pay for things for which she doesnāt have savings (HVAC, etc). I wouldnāt feel comfortable doing that, personally (and she told me this week that they decided against it). But, I think itās important that we each make decisions that allow us to sleep at night. If paying cash is what helps you sleep at night, thereās nothing wrong with that.
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How much does the decrease in the bond fund price impact you if you arenāt selling the bond fund?
Hi! I live in Seattle and know several good real estate agents. The best ones tend to work in limited geographic areas. Feel free to PM me if this is helpful.
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Maybe, maybe not (and note that 30 year rates have risen 1% in the last month and are now close to 4%). Do you buy stocks on margin? Thatās effectively the same thing.
Having to hang onto a poor investment for many years just to get your initial investment back doesnāt sound like the best idea. Nor does investing a bunch of money in bond funds at the beginning of an inflationary period sound wise. But intermediate bond funds seem reasonable.
Iād listened to Dave Ramsey for many years, though I donāt know where you can even listen to him in Seattle, and am so glad I never took his advice on real estate. If weād have waited years to pay cash on the rentals and homes we bought, weād never have been able to get them, since theyāve appreciated so much.
The rental we are remodeling now will likely sell for six times what we bought it for. Our home is worth more than double of what we bought it for. Much wiser to buy a house you can afford when interest rates are low, and make a concerted effort to pay off the mortgage. Dave is giving incredibly bad advice on that subject.
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I have invested in bond funds for about 40 years (as part of broader portfolio). Your statement about having to hang onto them for many years to get initial investment back hasnāt been my experience when interest rates have increased. YMMV. Invest is what makes you comfortable.
In terms of Ramsey and real estate, keep in mind that many people donāt live in areas where prices increase 6x or 2x. Iāve been in my house more than 20 years and its worth about 20% more than I paid for it. So without question, RE advice will depend on markets.
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Most certainly, real estate depends upon markets. And oneās personal situation, how long they are going to live there, etc. Sometimes it makes far more sense to rent, for example my kiddos could likely purchase a condo in NYC or SF (expensive as heck), but I think it would be a ridiculous purchase, since it would tie them to that specific location, HOA and property fees could be high, they are definitely not into home maintenance, and they can rent apartments for very reasonable prices.
Then again, Daveās consistent one size fits all advice (to save until you can pay for the property in cash) in a time of low interest rates, works for almost nobody. Maybe if you can live for free with Mom and Dad while youāre saving, and property prices are stable or declining, otherwise I donāt see it.
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I havenāt read much of Ramsey. Maybe someone who has can chime in. But I donāt understand him to have a one size fits all approach in terms of buying a house. Seems like paying cash is his preferred option but not the only one.
He has a mortgage calculator:
And doās and donāt with mortgages:
Not sure there is any investment approach that works for everyone. But if you look at the number of people who canāt cover a $500 emergency expense, live paycheck-to-paycheck, have nothing saved for retirement, etc., I think there are a lot of people who would be in better positions financially if they took the Ramsey approach (or even picked and chose a few of them). Doesnāt mean though it will be best for everyone.
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I listen to a lot of Ramsey. Dave is ok with a primary mortgage, however, he is one size fits all for cash only on any second home or investment property.
Dave is very helpful for those in debt and who have no control of their finances. He (in my opinion) is way off base on investing. I get that he needs to be a bit one size fits all to avoid confusion about his message but life is just not as black and white as he likes to make it.
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He has certainly become more amenable to mortgages since he started hawking Churchill Mortgage.
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So you knew he isnāt one size fits all on mortgages but now object to a conflict of interest? LOL
Its interesting to see a discussion about life not being black and white on a site like this. I agree with you btw, it isnāt. But much of the daily conversation on this site would lead you to believe otherwise. You would think a discussion board dedicated to higher education would understand that different people live differently. But often times here people assume that everyone lives just like they do. Fascinating me to see that. More than a little irony too.
If you are in significant debt with no control over your finances, getting to the point you can make less than ideal investment decisions is a win. Millions of people are in that camp who wonāt get there. Keeping things simple often has big benefits. Eventually you would like to get beyond the simple but its a first step.
And without question, many on this site are well beyond the simple. Doesnāt mean everyone is though.
I would like to clarify my thoughts on Dave Ramsey. I absolutely think that he is the answer for some people. There is a lot of good advice for people who have gotten themselves in credit trouble, have champagne tastes on a beer budget, etc. Many people could stand to employ some of his tactics. But he deals in a lot of absolutes with a heaping helping of judgment.
And, yes, agree with above poster that people live differently though cc feels a bit monolithic at times. In all the places I frequent IRL and online, cc is the place where I most feel like an outlier. But I love yāall anyway. 
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I agree with your take, @Youdon_tsay. I listened to Dave for years, and he has changed up some of his advice over time. Iād enjoy listening to him now, but I have no access locally, and Iām not a fan of podcasts. His advice is spot on for people drowning in debt, but sometimes I think his advice is too cookie cutter and can be very judgmental. Of course, sometimes people need to hear that.
Not sure why the previous poster is so condescending about others on this forum. Most people have experienced poverty and difficult conditions at some point in their life, or at least someone close to them has. That doesnāt mean itās unseemly to talk about oneās retirement plans and concerns.
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Who suggested its unseemly to talk about oneās retirement plans and concerns?
That was my take on your post. That people on this forum donāt understand that others have to live differently, and donāt have the same opportunities and means that they do, hence my inference that itās unseemly to talk about it. Perhaps I was incorrect about what you meant. But Iām pretty sure most people here are aware of how fortunate they are to even retire.
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I donāt think its unseemly to talk about oneās retirement plans and concerns. Particularly not in a thread on that very subject. If you want support for that, I wouldnāt have participated in this thread for years if I thought it was.
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We already own our primary residence (no mortgage any more). But I hear people keep saying ābuy while interest rates are so lowā. But, in our area at least, prices have gone way, way up.
What happens if my new neighbors want to, or need to, sell in 3 or 5 or 7 years - will they be able to get what they paid for it?
It took our other neighbors, who bought high in 2007, to the pandemic RE highs to basically get what they paid for it (probably $50K more than they paid).
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