Does putting all your eggs into one basket, one very expensive home, make sense anymore?
Many people would be better off living in a modest home and then buying a rental property and/or investing in the stock market. Even people with good incomes, making $100,000 or $200,000 a year, won’t get ahead financially unless they invest, and simply buying an ever larger home is not a great investment.
Your home doesn’t pay you, it doesn’t provide cashflow. Dividend producing shares and rental property do provide you with cashflow, and that’s what gives you more financial freedom when you want to work less. It’s reliable income. You can’t finance your lifestyle without it.
Aside from the financial aspects of a ‘quarter acre dream home’ there are also the practicalities to consider as well. These larger homes on sections are often out in the suburbs and require long commutes to work, school and sports/play. They often don’t have many facilities in the area; no cafes, gyms, libraries, galleries, parks etc – just lots of houses on sections. If you are young, or old and can’t drive then you are trapped in suburbia with nothing to do, and they wonder why so may people suffer from loneliness.
Perhaps a house that suits your unique situation; in an area that’s close to the things you do, the size you need, the price you can afford to pay, and then a plan to save and invest, would make more sense.
John Kenel
Assured Property
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