Millionaire To Millennials: Don’t Get Stuck Renting A Charlotte Home… Buy One!
Rent vs. Buy – the question that is at the top of the minds of not just millennials but, anyone who is currently renting. This is an age-old question that is typically answered by most financial advisors, “Buying is the only option.” However, there are a few exceptions to this rule in my opinion –
- If you’re going to be in a location for a year or less, it doesn’t always make sense to buy. The process on both ends would consume a good amount of that year for the buyers, turned sellers.
- Moving to an area and you are absolutely not sure what area is the right one for you, renting for 6-months to a year can be a smart option. I would challenge you that if your agent hasn’t been able to demonstrate to you that he/she has fully assessed your lifestyle situation and all other factors that come into play for the area of the city you need to be in, you may want to change agents!
- Renting temporarily (3-9-months) while your home is being built. We consistently have several clients who are doing just that. If you need to reside in the area/city where your new job has brought you, renting is your only option in this circumstance, in my opinion.
- You’re just out of college and need to build your credit and save for a downpayment on a home. It’s going to take two years of ‘seasoning’ your employment before you will be able to qualify for a mortgage loan. Use these 2-years wisely – save your money any way you can and you may even want to consider continuing your current status of ‘rooming’ with someone else to share expenses. Your savings will accumulate a lot quicker when you’re sharing expenses, including rent.
However, building wealth begins with homeownership. We can’t all rely on inheritance or a spouse who makes 6-figures right out of college! It takes careful planning and saving but, more importantly, it takes determination, drive and goal-setting to ultimately achieve financial freedom.
What does David Back have to say to millennials regarding tenancy?
In a CNBC article, self-made millionaire David Bach explained that: “The biggest mistake millennials are making is not buying their first home.” He goes on to say that, “If you want to build real financial security, real wealth for your lifetime, then you need to buy a home.”
Bach went on to explain:
“Homeowners are worth 40 times more than renters. Now, that first home doesn’t need to be a dream home, it can be a very small home. You might literally have to buy a small studio apartment, but that’s how you get started.”
Then he explains the secret to buying that home!
“Don’t do a 30-year mortgage. You want to take that 30-year mortgage and instead pay it off early, do a 15-year mortgage. What happens if you do a 15-year mortgage? Well, one, you pay the mortgage off 15-years sooner, that means you’ll be able to retire in your fifties. Number two, you’ll save a fortune (on potentially hundreds of thousands of dollars in interest payments).”
What will it cost to pay your mortgage in fifteen years? Bach simplifies it by saying that all you need to do to achieve this is brown-bagging your lunch for the entire term of your mortgage (15 years). That said, it’s the ‘Dave Ramsey’ way of life that we should all aspire to achieve – no debt. Brown-bagging your lunch is SO much easier than you think and the reward of early retirement and a financially secure life is far greater than any negative you may find in brown-bagging!“
Bottom Line
When a well-respected millionaire gives investment advice, people listen – if they don’t, they should! The simple advice of David Bach – if you don’t yet live in your own home, go buy one.
Who is David Bach?
Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.
He has been a contributor to NBC’s Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. He has also been profiled in many major publications, including the New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, Washington Post, the Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.
*Content base & photo provided by Keeping Current Matters
Debe Maxwell | The Maxwell House Group | RE/MAX Executive | CharlotteBroker@icloud.com |Millionaire To Millennials: Don’t Get Stuck Renting A Charlotte Home… Buy One!
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