The case for not buying property

This goes totally against every insight and grain of being in my body, but sometimes we become better when we understand other people’s way of thinking.

Most on this forum will have a mindset that can plan days, weeks, even years ahead and see the slow growth of their investment and the exciting, but frustrating travel that is the journey to property ownership, financial freedom and maybe reaching multiple properties. We actually enjoy this process and the value it adds to our life, the security it will bring to our future and the signs that we have succeeded in our plans.

Indications are that a minority have no feeling for this. This could be from an illness such as ADD where you cannot plan beyond the day, depression or abject poverty which sees you with no financial future or your background has never taught you to save over enjoying the benefits of spending what you have. There is no right or wrong. There is no better or worse.

11 years ago I was teaching someone to race his $235,000 M5 BMW around Oran Park, he was one of my contractors and couldn’t understand why I raced a $60,000 Mitsubishi Evo. I said value for performance. Last week he cleared a dead tree from my house and he noticed the house next door sold. The conversation concluded that this 54 year old has 2 new very valuable cars, a 12 year old M5 BMW and a large turnover business but can’t afford to buy a house. He loves cars (who doesn’t) rents a magnificent mansion, eats at the best restaurants and has a quality of life that we could all envy. He wants to know how he can retire at 60 but his business is worth about $100k and he has saved $400k. I feel he should keep doing what he’s doing and hope he dies within a year of retirement. (Sarcasm)

I know of a number of minor entertainers who seem to enjoy living the millionaire lifestyle. The $2,000 suits, $1,000 shoes, $5,000 watches, expensive restaurants. I met one at a bar and said what are you drinking I’ll have one too. So I ordered two double Pyrat Rums, one for each of us, that came to over $100. For someone whom I know doesn’t own his own home to be drinking by himself $50 drinks is unbelievable. Yet when they have money, saving isn’t important and they are having the time of their lives. I also know that many come from wealthy families and can wait for the inheritance to provide them a home.

So again a challenging world, but then again where else would we find long term tenants.

 

I can't for the life of me, understand how someone like in your examples, could be happy with the 'millionaire' lifestyle, but not purchase a home for themselves. It is just so totally foreign to me. On the other hand, I do understand the 'normal' person on a normal wage that is reluctant to purchase.

Case in point....we had a close friend that we'd known since we started our journey. Never a high earner, but not really lowly paid either. He knew that we invested, and once asked how much we owed. We told him, and he went white. His response was that he couldn't sleep at night doing what we were, and that he hated debt. So, I asked him a few questions.

Turns out that his rent was marginally less than the repayments on a unit, so I explained this to him, and told him that the best thing is that at the end of it, you'll own it, and instead of paying your LL rent each week, that money would go towards your future.

A few years later he bit the bullet & bought a little villa, with a small yard. I never did find out if it was me that demystified it for him or not, but he now owns it outright.

 

To be honest in a world full of inflation if you own Bitcoin everything is deflationary.

The kids of tomorrow dream of owning one bitcoin. They don't dream of home ownership. Kids dream of being the best eSports player, not being an astronaut. The times have changed. If you don't change with it you'll be left behind.

 

I dont own a home (or seriously desire to) BUT its not because I live a champagne lifestyle that prevents me doing so which I gather is the jist of the post.

I cannot understand the logic of people in your example - the ones who want a property, can theoretically afford it, yet still fail. I know quite a few like that too.

I can only assume for some people its not the priority they claim it is, thier priority is living in the now. Although I cant relate to that mindset, good on them if it brings them happiness.

Equally I can't understand young people who skimp and save every cent while sacraficing any kind of lifestyle just to get on the property ladder. Once again however, if thats what brings them hapiness then good on them.

 

Some themes mentioned are close to my heart (and imho have significant importance to how we experience life) and I could go on for hours and hours. I won't, I'll just say my bit and shut up.


The idea that 'There is no right or wrong. There is no better or worse', imo is a very destructive notion. And one that I think most people don't actually believe. Otherwise we'd let our young kids watch endless television and eat as much junk food as they like (unfortunately some negligent parents do).

I believe there is no singular framework of 'right and wrong' to be applied to all people, but there absolutely is a spectrum of 'right and wrong,' which will vary and differ greatly from individual to individual.

Eg, a couple really want to buy a property, have the income and just need better saving habits to achieve their goal. They just don't have the Insight to see where they are going wrong. In a general sense, the ' wrong ' would be their spending habits which is preventing them from achieving their goal and the 'right' would be to make some changes.

At the end of the day I believe the sooner individuals can work out the 'right and wrongs' unique to their own lives, the sooner they will have the insight to fine tune their compass to achieve more of what they desire - if they so choose.

 

Yahwul......read zee millionaire next door......yo thinkin da same.

 

I know a bitcoin investors They all have sold a small portion of their bitcoin for a big mansion.
They do want the big house dream too.

Just putting things in perspective.

 

@Sackie nothing is permanent though, you may think you're on the "right" path to achieving the goals you've set for yourself but you may realise that the goal wasn't worth it to begin with. I don't think the couple who want to buy a home but can't save would be miserable 24/7 because they don't own a home. At some point they'll change their goals and still manage to be happy.

 

Yeah, I should have changed too. Kids nowadays think about eating off parents' savings and my generation "almost" obliged to support my parents in their old age. Unfortunately mine gone to heaven a bit too early. I would have followed today's practice...

 

Your talking about 'settling' which most people do, to different degrees. It's a way we cope psychologically, when we think we can't achieve something.

All I'm simply suggesting is it's worth trying to identify our limiting beliefs. Because then we have the opportunity to address them.

Many humans for some reason take issue with the concept of right and wrong. But it's more about self limiting beliefs people place on themselves which may or may not be the case.

I know...I'm on an uphill battle...this isn't something most folks spend time thinking about so whatever 'easy on the mind' answer they read, they'll gravitate to.

 

You are right that we are living in changing times. In investing terms, some rant on about how you can't do today, what the older generations did yesterday. But they are both right, and wrong at the same time. You may not be able to get the same results following the same path, but those results can still be had following a different path. You need to adjust to the times.

However, I don't think you are right in saying that younger people don't dream of home ownership. I think plenty do, they just can't see how it can be achieved, and considering most of them want all the bells & whistles as a first home, close to work, it can be a huge struggle. Then they cry how it's unfair, the BB have stolen their dream, while if you look at what the BB started with it was a far cry from modern and in ideal areas.

 

Just over 10 years ago I saw a program (can't remember what it was on) where they were talking to a group of 19 year olds about their spending, lifestyle etc.
One of them was Nathan Birch. ALL of the other 19 year olds laughed at him and said he was crazy working his butt off to buy a house. He bought his first house on his 18th birthday.
He made his first million at 21. He could have retired before 30. All those others will probably be working another 40+ years.
What's not to understand?

 

Well if you're a digital nomad then renting is the way.
Rent for a few months around the country or in various places of the world and Bob's your uncle.

Rentvest is still a thing and looking around for a nice beach place I spotted a couple rented at $650-750 wk on the market for 1.4-1.6m.
Why would I buy unless I'm planning on living there for many years. Rent nowhere near covers expenses.

That was ABC/JJJ hack half hour hack or close.
For all the things I don't like about ole Nath's methods, that was one situation where I thought he did great.

 

Yes, I have heard someone AirBnB-ing for a year and ended up saving money and enjoying the world. Forgot where the link is.

 

That there are more ways to achieve ones financial goals than sacrificing all of life and youth.

I've often said the most difficult part of an investment journey is determining what the goal actually is, and just how much is enough.

Now this Birch character may of course want as many properties as possible at any cost, and if thats what brings him 'his happiness' then good for him.
Doesn't mean everyone wants or needs to do that to get where they want to be.

 

Agree! Nathan is a bit different from the average person, however I disagree with the rest. Try getting to retirement age, living on the pension as a single person & renting. I think anyone should at least strive to own something, even if you have it tenanted until you are older.

 

Problem is…. Can you get to any sort of independent retirement, above pension levels, without significant sacrifices? Unless you have rich parents? Sure you can point to people who started businesses or made good investments, but you cant point to ronaldo and ignore all the talented kids who didnt make pro.

otoh, plan for it early, do the right things to get to a good paying job, save early, buy early etc and it really doesnt feel like that much of a sacrifice. And the odds are good.

How many people, in their 30s or 40s struggling to buy a ppor, say at least I had a good time in my 20s? But its very hard to compare different realities.

Next generation? Your kids have the benefit of rich parents.

 

Different world out there these days.i have a longterm mate just retired after working for the BCC from 1974 then later Urban Utilities up till a few weeks ago..
Talked to him many times about investing in a house over the years but he has rented his entire life as its sad in a way as he was on above 2 -5 k a week and on his third marriage and no kids..
Myself the real value and wealth in life is your family everything else takes a back seat..

 

He’s married - so he does have a (2-person) family.

There are lots of ways to be happy…and they can be surprisingly different.

Does he regret not buying a house?

 

No I don't think so,he's just paid the deposit for a new V8 Toyota and a offroad 4x4 caravan and when that's delivered then sell down all cars bikes boat pack the van and join the travelling nomads..
So people just don't like risk while others thrive on risk ..