Your Most Important Investment
Living in a world where you have the chance to see many different financial records of home buyers, you sometimes wonder why some people just don’t get it. Get what? The best use of money. Good and bad habits show through on all financial portfolios of the rich or poor.
I have seen people with six figure incomes and very little debt yet with very little in savings. I have seen people with incomes below the median area income and yet have more cars and toys then the value of the average home in the area and still renting a small apartment. No matter the portfolio, most people spend too much money eating out. Actually the average home buyers I worked with spend more money eating out than on groceries each month.
Other than your health and the health of your family, your home should be your most important investment. I want you to think outside the box and first take a look at your annual social security statement. This statement tells you what age you will be able to start collecting social security income. Your overall plan should be based on that age or the age at which you will have the ability to chose when you want to retire whichever comes first.
Your goal should be to have your home at an equity position greater than 50% of your home’s value by your retirement age. The sooner you purchase your primary home the easier it will be to achieve this. This has to do with the time value or money, amortization, and capital appreciation.
At this point in your life you will then have the opportunity to do one of two things. Either do a reverse mortgage on your home or refinance your home into a lower monthly payment basing it on your retirement income. It’s important to never refinance your primary residence in order to consolidate debts. This could lead to financial disaster. Your priority is to always protect your home before protecting any other asset. Remember if we have another financial crash its easier to try and pay a lower mortgage than it is to live inside a fancy sports car.
Renting a home should only be a temporary thing for any family. Rents increase every year and in most cases, leads to a diminish living conditions and depression. Cracking down on foolish spending like eating out 7 days a week or buying a used car versus a new one can help you put yourself in a better position for attaining home ownership.
If you would like me to help you put together a good plan to maximize your potential for home ownership call me. Ask questions, get all your facts and we will see you at a happy closing table.