Buying A House Is Dumb…

Most people think “I have to do what my colleague/neighbor/family member is doing,” rather than “I have to do what’s best for me.”

I’m passionate about personal finance. Over the last couple years, though, I’ve felt as if I were running in place. Working hard. Not getting ahead. Caught in this “rat race.”

I began to feel burnt out.

I have done a lot of thinking on what “wealth” is, and means to me. Reading and studying what wealthy people are doing different than the middle and lower class.

I then started to think about and look at different ways I could get ahead. To make the work I was putting in, really pay off…in multiples.

I had started dabbled in some day trading, and sought advice from family and friends and two things I heard the most:

1. Stocks are risky, and you could lose everything.
2. You should invest in a house.

Now, number one. I’ll get to that another day. But, in this post, I wanted to address my thoughts on number two because it usually ends in a heated discussion of people telling me what I need to do.

To make it simple:

An Investment or asset, by definition is something that is putting money in your pocket.

So while most people think of owning a home as an investment — I see it a bit differently.

When you own real estate, and rent it out to generate monthly income — It is an investment

When you buy real estate, develop it, then sell it for a profit — it is an investment

When you buy real estate to live in and have a mortgage, spend money on upgrades and whatever else. By definition — it is not an investment, rather it is a personal expense.

This is where the discussion usually takes a turn.

Now, don’t get me wrong, I do believe in home ownership. This post is not to debate whether you should rent or buy, rather, more of an insight to my thinking and process. My game plan, if you will.

A home, paid for is a necessity if I ever want to retire. I want. I need a place to live payment free.

For me though, now is not the time to take on that liability.

2017 is here and like most people, I have some resolutions. I have started late in life, but my main goal this year is to begin building long term wealth. To really understand my steps, and goals, I think you need some context of what I consider wealth.

Wealth to me, is simply measured in how much time you can live without bringing in income by something like say…a job. It’s money I’ve saved, it’s things like stocks and dividends that pay monthly, offsetting bills. It’s things done to make my money work for me, not the other way around.

So, to get where I want to go, this is kind of been my road map:

(these are stolen from Dave Ramsey)

1. Clear myself of all debt. I have pretty much done this from the middle to the end of last year. Anna and I paid off almost $9,000 of debt in just over three months. This showed me that it is possible to make moves and get ahead, even provided a glimpse that it could be a reality to pay for a house in cash. Just need to apply some hard work, hustle and discipline.
2. Build up my “emergency savings.” I want to get to a point in life, that I am no longer living with “Murphy.” You know — Murphy’s law. Anything that can go wrong will. This is what has lead to my feeling of running in place and I battle with daily. So, now I’ve started to do some hardcore budgeting. I have these envelopes where I put in specific amounts of cash for certain activities or things such as food and fuel. Once it’s out, it’s out.
3. Up my contribution to 401k and investing more into long term stocks. I’ve started this, have learned a lot. So far the biggest thing being patience.
4. Begin to look for a home. But only if we have a hefty percentage to put down, if not all of it.

If my wife and I aren’t able to save any type of down payment — a house is not for us until we can.

To me, this is more of a principal, showing that we can make sacrifices in order to reap rewards. If we can’t save, it means that when something does go wrong with the house, cars, or anything in life, we will always be stuck in an unfortunate situation. We don’t need to go tacking on more debt to our lives.

Because this is something I’m passionate about, I want to log and share everything I do, just like this. It helps to keep me honest and holds me accountable. I hope it gives everyone a chance to learn, and reflect on any success or failures…at my expense, providing takeaways.

If you made it this far, thanks for reading. If you want to ride along with me on on my journey, please like and follow for more.

I’d also love to hear all feedback and thoughts — so leave them below.

We’ve all got one life. Make yours count.