The two biggest spending mistakes people make are on homes and cars, Ramit Sethi, a personal finance expert, said. Sethi, host of Netflix's "How to Get Rich," said Americans have a "religion" around ownership . This leads people to overlook costs that might make renting a better financial option for some.
Ramit Sethi is a New York Times bestselling author, host of his own Netflix series, and the proud owner of a 2005 Honda Accord. And while the personal finance expert reportedly has a net worth of some $25 million, he says you won't find homes or condos factoring into his fortune. Those deliberate choices reflect two of the biggest mistakes Sethi says he sees Americans making with their spending.
"It's always the same two things, housing and cars. Always," he said in a recent interview with Scott Galloway's podcast . "Americans love housing and cars, and they make the biggest financial mistakes with those two categories.
" Sethi said that American society has a "religion" around ownership of these assets that causes most people to overlook the "phantom costs" associated with buying and maintaining them, like interest expenses, repair bills, transaction costs, and even opportunity costs arising from alternative uses of that money. "Americans are extremely bad at calculating phantom costs. They just take the big number and subtract the small number," he said, referring to the simplistic way home buyers commonly think about their purchase.
By way of example, Sethi said he rented .