LaVera's Profile

DON'T ANYONE BE PRESSURED INTO BUYING!!!!! Puff, puff, whew....got that one off of my chest. I am the owner of three houses, one I live in, one my sister lives in and one I bought in an attempt to pay the bills. And no, this is not sour grapes from someone who is upside down on a mortgage or got caught in the real estate crash. My houses are worth twice the value of my outstanding loans. I am not against home ownership. I am against blundering into it without thinking or worse, buying the hype like I did, that it in some way will increase your worth or make you more secure. Reality check time. If you have a mortgage, you do not own that house except on paper. The bank owns it and you are allowed to live there until you pay it off. Your name on the deed is largely a legal courtesy. The moment you sign a mortgage, you will have to look up to see bottom. You are in a hole that you can not easily get out of and you have shut off many of your life choices. Want to relocate? Tough. Unless you can dredge up a buyer, you're on the hook and staying right where you are. Fantastic job offer in another state? Family circumstances changed and you need to move closer to relatives for their sake or your own? Same as above. Want to start your own business? Whooo....hold on, not with that huge monthly payment due. It's not likely that you can afford to take that risk. Feel good to stop working for a bit to get yourself together? Fat chance. Quitting your job to go back to school? Probably not possible. Cutting back your hours to go to school part time? Better hope that there's a program within commuting distance, because you're not going anywhere. Want to take that dreamed of year off? Have a yen to really travel beyond a quickie two week vacation? You get the picture. I'm a 57 year old woman. I've lost one job and have patched together a living out of free lance teaching. I work like a dog to keep my head above water. Most of my salary goes to servicing my loans. And if I didn't have these loans? I'd be making enough to be really comfortable with enough of a surplus to put a good deal away for retirement. I'd have enough to indulge my passion for travel, take time off to enroll in overseas language or cooking courses. With even my modest salary worlds of possibilities would be open to me. But as it is, I'm looking up from this hole trying to see bottom. So consider the possibilities you are giving up before you sign on that dotted line. If you do buy, my advice is to not be swayed by trendy neighborhoods and to buy much less than you can afford so that you have some wriggle room in your budget. Buy small, as small as you can comfortably live with. If your friends are only impressed by fashionable addresses, spanking new houses or McMansions, then you need a new class of friends. The biggest lie of home ownership is that the value of your home will increase and you'll be financially better off with more money if you decide to sell. This is based on faulty math. Sure, Grandpa bought his house for $45,000 in 1950 and just sold it for $350,000. He made a ton of money, right? Wrong! A shocking number of people are duped by not factoring in inflation. As a really (really) rough estimate, the dollar loses about half of it's value every 20 years or so. That's why a loaf of bread that used to cost $0.25 can now costs $2.00. So factoring in inflation, Grandpa actually fell about $10,000 short of breaking even. So no, it is not your path to riches or even security. It can be a wise move if you look at all of the opportunities that you are closing off and decide that they don't matter and looking at the risks you're taking (job loss has come out of the shadows of shame to be exposed as the frequent reality that it's been for years) and have a game plan for getting around them (hoping for the best is not a game plan) then it can be a good move. Just don't go into it looking for financial security or worse, some kind of elitist respectability. So, have my houses made me more secure? Perhaps. Maybe or maybe not. What I am sure about is that if this is security, I've paid much too high a price for it. At 57, the prospect of hanging on and fighting day to day just so that I can have these houses later in life as some sort of security blanket is a horrible deal. I'll never get these years as a wage slave back again. I'd rather have my freedom.

As a P.S. to the previous comment
We all realize that the chain smoking father who, with all the love and good will in the world, tells his 10 year old not to smoke as he puffs away on a cigarette has very little chance of success. Even if he tells him this weekly. By the same token, telling our kids to be kind, having teaching moments and marching them our to volunteer when we are too busy to reach out to our fellow man ourselves is not a lesson that is likely to take. Without going into details, I have seen a 40% cut in salary in the last two years and have been so consumed with getting those ends to meet that I haven't really forced myself to make the time to help others or to reach out. New year, new start. Let's make kindness a priority for both our kids and for ourselves.