My current hobby is home ownership… well the potential to be a homeowner… ok so it is really just me looking at a ton of houses.
I am calling my next house my forever home. The house I don’t plan to move from ever.
I don’t know if that will be the case, judging from my past I really don’t think it will be. Hopefully, I will stick with this one though.
It is a crazy concept that my next house could possibly be the last house I purchase or the last place that I ever live. But moving is a painful process.
The funny thing about home ownership is what it really provides to someone. I am sure the readers of The Guide to Health and Wealth are all expecting a blog about how your home is your greatest asset, but that isn’t true.
YOUR MIND IS YOUR GREATEST ASSET
Your home is 2 things:
1. A place to live
Your house is where you live, if it is yours then it can be permanent. If it isn’t then it is at best temporary.
2. Something that consumes your money.
You will spend more money on the place you live than any other expense ever.
The True Cost of Home Ownership
I will admit you have to pay for a place to live, and I have no issues with that. I do however have an issue with people thinking that their house makes them money.
If you are still living in your house then you have made no money.
Said a better way… If there is a debt on your home then you are spending a great deal of your money on your home.
Let’s break it down, if you bought a house in 1990 and was average, you got a house that cost you $101,000.
That house today (2016) is worth $181,000.
That is a huge return on investment right?? Almost double?
Nope… not even close. You would have paid around $266,797 to date for that house. Doesn’t seem fair, does it?
However, if you did refinance your house (in this case recommended) when the interest rate dropped you would have only paid $195,188.
So now you can sell your house and take the $14,000 loss and be homeless.
Is this the case every time? No… I did just play with averages, but that scenario did play out in many cases.
The issue getting advice from salespeople is they are trying to make money.
Of course, a lender showed you how your home could profit you.
Your real estate agent probably told you something that made perfect sense to you, that lead you to make your purchase too.
Facts aren’t always facts.
Here are some facts though that you can live by:
Your house is a place to live.
Your car is used to get somewhere.
I am still not eating avocados…
Thanks for reading