Reddit mentions of The First Tycoon: The Epic Life of Cornelius Vanderbilt

It's history, to some extent: Philly always had this hippie-dippie vibe from the start (Penn's Quaker mission & vision of a "greene countrie towne"), but NYC was commercial from the outset, settled by the Dutch, built on Hudson/Atlantic trade.

If yer innarested, this is a great book that gives a window into NYC's commercial history: a biography of Cornelius Vanderbilt, the "first tycoon," who started life as a Staten Island Dutchman making money ferrying people in a sailboat and beating up the competition with his fists, and then got rich in steamboats, the stock market, and railroads. Tells the story of NYC's transition from a big trading post to a financial capital. And CV is a classic winner-take-all NY type: single-minded, egotistical, shamelessly ambitious; creative; innovative - magnanimous at times in victory but ruthless in competition.

> As the article points out, there are lots of reasons to own a home, e.g. as a place to live. But owning as home as an investment doesn't add up to much ... Corrected for inflation, real estate prices have only grown at <1%/yr.

Right.

>One of the messages I got from his book was, that it doesn't make sense to massively leverage yourself on a single asset (e.g. your home), rather than keeping a more diversified investment portfolio. For instance, I wouldn't buy a single pharmaceutical stock, and put 90% of my investment balance in it, because that's fucking stupid. I'd be even less inclined to buy it on leverage, because the risk would simply be insane. And yet many, many people do this when they get a mortgage.

>There are obvious limits to this analogy...

Right again, there are limits - for starters, you are back to talking about houses as investments. But there's a better way to look at them. Remember the difference between value and price.

Commodore Vanderbilt, the USA's first self-made billionaire from operating businesses (who was pretty much Warren Buffett with a bullwhip and a shotgun back in the days of red- in-tooth-and-claw early capitalism) gave one piece of investment advice in his old age: "Buy what you want to own. That way if it goes up in price you'll get rich, and if it goes down you'll still be happy because you want to own it." He was talking about the difference between value and price.

This applies particularly well to a home. If one is particularly attractive / convenient/ good for you and your family, it's value to you may be well above the market price you have to pay for it. But you aren't buying it for price-gain, you are buying it for its value to you. You can't lose because you are buying it at a price less than its value to you, which is definitionally a bargain. If it's price goes up, so much the better.

Now I am assuming your are going to live in it long-term, say 10+ years. If so, then financing with a mortgage certainly is a good move because it prorates the purchase cost over the period of use (or maybe much longer, even better) on financial terms that are locked in and which you know are good for you. This is not in any way a case comparable to investing in financial securities using 9 to 1 leverage, which is truly dangerous gambling.

In fact, mortgage financing so financially favorable that most astute financial advisers will tell you that prepaying a mortgage to knock down the borrowed amount early is the dumb-butt move to avoid ... but that's another story.

If you like that shit read Titan and Carnegie as well. Throw in The First Tycoon and you got a comprehensive lesson in people who have more money than you will ever have.