I think my economics class was about 40 years long, and frankly it's still not over yet. One thing I have noticed, is with a tough economy, what was old, is new again! I'm not talking about making the most out of garage sale prices, I'm talking about living a life that includes a paid off mortgage.
To me, paying off a mortgage before I retire is the best way to save for retirement; how you might ask? Most financial planners rightfully talk about how much money you'll need, on an annual basis, to live in retirement, and then they try to help you plan for that time.
How simple it is to consider that if you pay off a home, either by using cash to start with, or by paying off your mortgage, you won't have that mortgage expense when you get older.
I know lots of young people understand this, they didn't hit the real estate market at it's rapid incline, so they understand, quite clearly that when you purchase a home, you are not guaranteed instant tax free cash from rapid appreciation in 5 years.
Most can look at history and reflect that homes will appreciate over time. So, even with a hiccup in home prices, if you stay put, you should do better than just putting money into a rental you won't ever pay off (except the owner of the rental usually does pretty good).
It just makes sense that if you're going to pay a certain amount for housing each and every month, to pay off a home with that payment gets you further ahead than if you don't. Of course, many families, young and old are too mobile to wait out the supply and demand cycles, but if you can, you should.
So, in my humble opinion, save for a home, pay it off, and then retire with less pressure on your other investments to perform. Oh yea, should you add some rental property to your "holdings" or just hope the wall street gurus are thinking of you first and not their own take home pay? I like my investments, but I like not having a mortgage in the future as well.
When is a good time to buy a home? Should you buy when everyone else is in a hurry to buy or should you buy when everyone else is staying away? The people who make good decisions in any market, always do better. Would it be better to buy a home when the interest rate is 4% or 8%? Smart people understand this easy math well.
Of course if you're not moving and moving and moving every few years, I can't sell as many houses. But then, should it really be about me? Or should you do things that get you and your family on a secure path to the most comfortable lifestyle, now and in the future, that you can afford.
Rookie home buyers wanted!
The Quilting Realtor
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Many Dream Of Living In Montana I'm One of the Lucky One's That Already Do! Wanda Thomas Call or Text 406-698-8640 for help with all things Montana. |
