Some of life’s most important lessons are not taught in schools. And, this affects many people adversely later in their lives. When most look back, they are filled with regrets about what they should have done and what they did wrong. Most of us opted for expensive, brand name cars when we could have bought a small house!
The Right Time
One area most people wish they had had lessons is in the area of finances and real estate. Without a doubt, virtually all of us use money and live in houses. But, are we good at managing our money? Do we know about the intricacies of mortgages?
When, for example, would you say, is the right time to buy a home? In truth, the answer depends on each individual. We have different plans in life. Some people would rather spend their money globetrotting and be having myriad pleasures than adding a huge commitment like a mortgage for a luxury condo like the Martin Modern in Singapore to their lives.
Many live in rented accommodation. Naturally, they pay rent every month like clockwork. But, think about this, even if someone has lived in a place and have paid their rents faithfully for a decade. They still don’t have the house!
Is it not possible, that they could be better off later in life if they had bought a house? It’s true they’d still have to pay their mortgages, but at least, the house belongs to them when it has been fully paid for.
Are there some benefits to renting a house, relative to buying? Yes, there are. But, from a proactive and long-term perspective, what you own is better than what you are only allowed to use for a while. But, one of the misconceptions about buying a home when you are young is that it would tie you down! That’s not true, you can always rent it out if you must move.
Why spend money in a particular way, when you can spend it in another manner that could make you richer? Is it wise to wait until you are old, with so many responsibilities and myriad bills before you consider buying a home, or should you buy when you are young?
Different strokes for different folks
It’s all relative, really. At the end of the day, one should compare the pros and cons of buying or renting, and take a long-term position, because one of life’s truths, is that what seems great in the short term, may be a terrible idea in the long run.
Having a personal financial plan might help in deciding the ideal time. If you have clarity about the kind of incomes and investments you’d like to have over time, this will help you greatly, to decide to buy when you are below thirty or much later.
But, it’s good to know that one’s of life’s terrifying prospects is to be broke when you are old! So, unless you are counting on winning the lottery, it is wise to start thinking of investments, such as buying a home, when you are young, when you have started making money, you should be also be planning how to make the best of them. I will suggest the earlier the better.