Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

by Kristy Shen

This is where the Rule of 150 comes from. Since the extra ownership costs are approximately equal to the interest of a typical mortgage over nine years, and the interest is approximately 50 percent of your mortgage payment during that time, you have to multiply your monthly mortgage payment by 150 percent. This is how much your house will actually cost per month, once all expenses are factored in. If that Rule of 150 monthly cost is higher than your rent, then it makes sense to rent. If it’s lower, then it makes sense to buy. The moral of the story isn’t to never buy a house, it’s to “math shit up” before you do. At the time that we were looking for a home, my Rule of 150 number was way higher than what I was paying in rent ($850 a month for a one-bedroom apartment). So after “mathing shit up,” I said no thank you to the housing market and kept my money.