Don’t buy a house, spend big money to change cars
Below is the sharing of Jules Rogers – 29-year-old female journalist about why owning a home is not in her plan:
“By investing cash in low-cost index funds instead – after spending all my money in a personal retirement account, I set myself up for financial independence and early retirement, started the FIRE trend.
I am 29 years old and have never thought of buying a house. Owning and investing in real estate that wasn’t part of my plan has kept me out of debt.
Since the age of 21, I have moved to 5 different cities for work. The biggest expense outside of commuting is for using a car.” – Jules Rogers said.
Having a car helped a lot for Jules Rogers’ first job at a newspaper about 400km from home.
At the age of 21, Jules Rogers started using her fiancé’s 1992 Jeep Cherokee. However, there were quite a few problems with this old car, so the two changed to two other used Audis: a 2007 Audi A3 and a 2012 Q5 – now fully paid off.
“When you buy a used car, you are letting someone else bear the majority of the depreciation expense, while the car is still comfortable to serve your needs if you do your research carefully and be sure about the standard car. In general, a new car can depreciate by up to 20% as soon as you own it.Over time, this car can depreciate 15% more in value each year.
When we bought the 2007 A3 in 2015, we paid about 45.5% less than the manufacturer’s retail price. Similarly, for the 2012 Q5 we bought it in 2018 for 50% less than MSRP (manufacturer’s recommended retail price) its.
We have moved ourselves to all the cities across the country to work. Thanks to that, we respectively paid off the debt of the first car in less than 5 years and the second car with a term of 3 years.
And we plan to continue to maintain these vehicles for many years to come.” – Jules Roger shared.
Rogers’ mansion-style apartment complex in Texas. (Photo: Jules Rogers)
In all the cities they’ve lived in, the Jules Rogers have never stayed more than two or three years. Meanwhile, if buying a new home, Jules Roger said that typically homeowners will need 5-7 or even 10 years to be able to make a profit from the house.
“Rental gives me the freedom to invest on my own and not be tied to where I live”Jules Roger emphasized.
As Robert Kiyosaki points out in the book “Rich Dad, Poor Dad”Your home doesn’t have to be your property, even if it’s a long-term investment. Besides, buying a house to live in can be a bad idea if you want to get rich, because the cost of owning a home is very high and not to mention, it also holds a large part of your wealth for a period of time. long.
According to a September 2021 study by Redfin, the national average monthly mortgage payment grew 67% faster than rent. And people with mortgages can have to pay nearly 1.8 billion VND in interest after 15 years for a house costing about 5.7 billion VND.
The average price for a home in the US in August 2021 is more than 8.7 billion (up 8.6% compared to 2020). So most homeowners will likely end up paying more, depending on the interest rate at the time of purchase.
Based on the real estate situation and the possible interest rate after buying a house, Jules Roge decided not to choose to own a house because it could cause cash flow to “die” in one place in the long run. .
“For reference, where I live now in Portland, the August property market saw an 18.5% increase in median sales compared to August 2021, according to RMLS.
Because of the above reasons, I am still gradually completing my goals to live a free, debt-free life and thereby develop financially.
At the very least, I would still choose cash for investment and no fixed costs for housing.” – Jules Roger added.
According to businessinsider
at Blogtuan.info – Source: autopro.com.vn – Read the original article here
