Get a job that pays well.
Save.
Invest.
Use your savings to pay for the down-payment on a new house and take a mortgage out for the rest.
Save.
Pay off your home loan.
Put down a bigger down-payment, take out a bigger loan, upgrade your house.
Repeat for 40 yrs.
Then retire and use savings to cram as much fun into your retirement as time (and health) will allow.
This is the long-taught, responsible method of being an adult. If you have done this, or are on track to do this, good for you. But don’t think this is the only way.
Saving and investing is good. Great even. Make money and then make your money work for you.
But is buying a house really investing?
Look at this below graphic from Bloomberg Businessweek showing what we perceive to be the return on buying a house (not adjusted for inflation) and the actual return (inflation adjusted):
Click Picture for Larger Image
Maybe buying a house isn’t the great investment we have always been taught…
So what to do with that money you have been saving? Stock market, right? Sure. Very responsible. You should be investing in the stock market besides just saving cash for a down-payment anyways.
But check out this research showing that while buying things won’t make you happy, buying experiences will.
Invest in experiences that you have always wanted to do. Invest in experiences that will give you memories for years to come. Invest in yourself.
Your family. Your friends. Your boss. They might all view your decision to not buy a house as risky, but you know the truth. The money won’t be wasted, but invested in your own happiness (and with the weak inflation-adjusted growth of housing prices, where is the real waste anyways?).
Following a path that some might call untraditional can be scary, but if you have some doubts… just watch as we invest our own house down-payment towards our around-the-world adventure and hopefully, land standing!
How are you going to invest your down-payment?
I loved the message in the “Science Daily’s” article, “Buying Experiences, Not Possessions, Leads To Greater Happiness.” This is very often forgotten in our crazy lives. Great link.
So true, Barb. It is something that we all think about but often forget too quickly.
Great article about approaching life differently than the masses. You clearly pointed out that buying a house is NOT the safe bet it once appeared to be. I love the part about investing in yourself, family, etc. Memories last forever, houses do not. Keep it up.
Thanks JR! Life is all about experiences and not about things… sometimes we all get that confused.
I totally agree about that treadmill existence. I do though, have 2 investment properties where the rent I get more than covers the mortgages and expenses. Long term they will work for me , while for now, I plan my year or more off
Investment properties are super intriguing as a way to free yourself from the treadmill existence… I think they are totally different from just buying a house to live in.
We have actually discussed buying a 2 or 3 unit property and living in the smallest unit. The other units would then hopefully pay for the whole property.
Glad to hear you have found a strategy that works for you!
I have been looking real estate
lately for a house. Now i am starting to look for reasons not to buy a house. i have bought and sold houses in the past. My ptr and I took 12 months off in 2008 and travelled Australia. It was very freeing and liberating. We could work if we wanted to or not. We both loved the lifestyle. We are looking for strategies now where we can continue to travel. Dont mind working on the road or better are looking for ways to be self employed while we travel.
Love it, Rose!
We are in the same boat as you. We have finished our year of RTW travel and are now working on strategies to keep traveling. Buying a house is still a possibility for us, but perhaps more as a base of operations. Buy a 2 or 3 unit house and rent out the larger units so that we can live in the smaller unit when we are home. Ideally, the rent collected would cover the mortgage… in a perfect world!
We love to talk about finding ways to be self employed, so feel free to shoot us note whenever you have something new!
What a information of un-ambiguity and preserveness of precious experience concerning unpredicted
feelings.
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