Lessons as a Kid - Home Buying
So it's February, surely Spring's going to get here soon enough. But you know it's a time of the year were more and more people begin to think about buying their home first. Or moving out of their current home, and upgrading into a larger home. I wanted to share with you my own bias around home buying. As a kid money and you learn a lot from your parents and the people around you as kid. We are social creatures, we take cues from other people and from others' experiences. And as a kid, I think it is fair to say, and fortunately my parents are still alive. So hopefully they don't get mad at me about this, but we were, at one point in my childhood, we were house poor. My parents bought a home that was much larger than what could be afforded, and there were other elements in the financial Iife such as starting a business where made it even harder to afford that home. And we had to eventually move out of that home. We had to move into a rental. What I learned from that experience is that's buying a home can be something that can be great, and can also be a source of a lot of stress. And what I've learned in my later years, renting can offer value that buying a home can't offer. And for me personally, the key one is optionality. My wife and I want to buy a home eventually. But we both know currently, where we are in our financial life, and where we are in our careers, it makes most sense to continue to rent. That's really important to us.
And, so I encourage those folks who are currently thinking about buying home to really step back and not become so focused on the process of buying a home, and getting prequalified and getting the best rate on your mortgage, and find the right neighborhood, and price for square inch and making sure mathematically it makes correct sense between all the costs associated with the home vs. the cost of renting, really step back and begin to think about what does your life look like on the other side of buying the home that you are looking at. Sit down and think about what are your goals and what are your values and what make you tick. And put the puzzle together and say, OK if we buy this home, which can be a very important goal valuable to you but is it going to come at the cost expense of other values and goals you have in your life. Really begin to think about where does this fit into our sabbatical plan, or starting a family, or starting a business, or planning for your advanced years of retirement.
I've got a 27 point checklist that you can download, the link is in the comments below, and you can use that checklist to began to help hone your thoughts and form your thoughts around looking at the inherent trade-offs of putting a lot of capital into a fairly illiquid asset that is going to probably be your largest purchase ever. You really owe yourself the time think through, "What does this mean?"
In that 27 point checklist it is also going to discuss closing costs, and evaluating your mortgage, and insurance, and estate planning issues. But there is also a section on there that also is looking at the cash flow and what is it inside of your greater pursuit that you want to live.
Have something on your mind? Schedule a free call with Nate.
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