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It took me 3 years starting after the 1982 recession, going from homeless and $9000 in debt to being debt free and having the down payment for 5 acres and a house. For those 3 years I lived in a $500 travel trailer.
There was no luck involved, but it took a lot of self discipline.
Even if it took 10 years they would be on track to having a much better life
See, this is what I really don't get. If you really thought that having to delay gratification this long is no big deal, then why not just live with roommates until you're 40 and buy your house in cash?
See, this is what I really don't get. If you really thought that having to delay gratification this long is no big deal, then why not just live with roommates until you're 40 and buy your house in cash?
We lived in a camper........then bought a place with cash and remodeled an old farm house.
It took about eight years because I spent most of our money on equipment to make money with.
See, this is what I really don't get. If you really thought that having to delay gratification this long is no big deal, then why not just live with roommates until you're 40 and buy your house in cash?
I think the reward/sacrifice ratio would be different for each scenario.
It took about eight years because I spent most of our money on equipment to make money with.
Smart.
This sort of thing used to be easy for people before TVs were invented. Now so many are locked into an addictive cycle of sourcing "happiness" by constantly buy junk, maxing out the cards. Delayed gratification is just as impossible for them as it is any other junky.
First step is to ditch the TV, and hang out with people who aren't addicts. Learn to find happiness in something else.
See, this is what I really don't get. If you really thought that having to delay gratification this long is no big deal, then why not just live with roommates until you're 40 and buy your house in cash?
This isn't really a "delayed gratification" though, it's a point of perspective. Do you tell parents they are all "delaying gratification" because they have to "raise" a child for 2 decades? They'd tell you they get joy out of it.
Sure, there isn't much joy living "cheaply" but there isn't "gratification" because you "made" it. You can live fairly frugally without giving up all of the joys in life if you prioritize them against your extra "wants". You might really like one hobby but have to give up 2 in return. Look at the ski bums, they give up a lot to be near the ski slopes. Or the people who travel the world with just a backpack. Sure, living with roommates suck, knowing each day you do that can help you own a house, sure why not? Buy up the house you want, and rent rooms out, do part of the remodel/build work and you get a house at the end of it. Just make sure you aren't the roommate that's doing the paying down of mortgage and you'd be fine.
See, this is what I really don't get. If you really thought that having to delay gratification this long is no big deal, then why not just live with roommates until you're 40 and buy your house in cash?
What does taking 10 years to get back on track have to do with delaying gratification? I was commenting on someone that was down and out and getting off the street with the help of a non profit group or church. The poster I commented on said that someone could probably get back on track in a couple years I think. I mentioned that even if it took 10 years they would be so much better off. I doubt that many people living in a rescue mission or with the Salvation Army would be in a postion to buy a home or as most of us do, go into debt for a home. I would bet that many could live in that situation and in a few years be in a position to make the rent. They would be in a position to pay their own way in life. If they had the worse credit in the world they could be in a position to buy a home within 10 years. By then their credit could be clean.
As for me, I did live with roomates untill I was 45 before I bought a home. I still live with them, my wife and 5 of our 6 kids. No we did not pay cash and with todays low interest rates (Our interest rate is less than 4% and that is a 30 year fixed rate.) I don't see the need to pay cash for a home.
As far as renting, we had to live somewhere. To save money we moved into a 2 bedroom apartment and lived there for over 4 years. I built a tripple bunkbed and a double bunk bed for the boys. That was fine and we figured we could live like that for a while. Only problem was we had a daughter and my wife and I figured saving money is nice but we needed a bigger place. We were looking to rent a 3 or 4 bedroom home somewhere. In early 2010 a friend forwarded an email to me. I checked it out and called up this lendor that specialized in first time home buyers. The more we looked the more we liked what we saw. Realize that the market was approaching its lowest point, in our area anyway. Over a period of 3 or 4 months we went to classes, prepaired ourselves and decided that we could buy a home. We needed to come up with 3% of the sale price and I had that money in my retirement account.
We ended up buying a bank owned home. Our mortgage payments were lower than rent for a similar home. Since we had to move anyway I saw this as a big plus. Another plus that we saw was rents have increased. The place where we used to rent that 2 bedroom apartment now charges people what we pay for our mortgage, insurance, and property taxes. We paid $310,000 for our home at or near the bottom of the market. Home prices in our area shot up and late last year a few homes in my neighborhood, similar homes to the one we have, built the same year by the same builder, all on the same size lot, sold for $415,000, another for $430,000, one sold for $480,000 although it did have a second story addition over the garage. The market is still far from its $700,000 range that it hit back in 2007 before the bubble burst. Still I am thinking we made the right decision on buying a home. We could have waited as you suggest. The point is that we needed more room for our family, home prices had become affordable, interest rates were low. It was a perfect situation for us to buy a home. We have never regretted that decision.
On a side note buying a home to live in is not a bad thing to do. Instead of renting you end up building equity. You have an asset that you can sell later on. You own something. Eventually you could be in a postion to have that home paid off. With an apartment you pay it off for someone else. It would be better if you can pay cash for a home but that is not always the case. I wouldn't advocate putting off the buying decision for someone that is in a position to buy, especially if prices are going up. With us we just figured up or down, we needed a bigger place and when we found we could buy one instead of renting then we had to jump on it.
What does taking 10 years to get back on track have to do with delaying gratification? I was commenting on someone that was down and out and getting off the street with the help of a non profit group or church. The poster I commented on said that someone could probably get back on track in a couple years I think. I mentioned that even if it took 10 years they would be so much better off. I doubt that many people living in a rescue mission or with the Salvation Army would be in a postion to buy a home or as most of us do, go into debt for a home. I would bet that many could live in that situation and in a few years be in a position to make the rent. They would be in a position to pay their own way in life. If they had the worse credit in the world they could be in a position to buy a home within 10 years. By then their credit could be clean.
As for me, I did live with roomates untill I was 45 before I bought a home. I still live with them, my wife and 5 of our 6 kids. No we did not pay cash and with todays low interest rates (Our interest rate is less than 4% and that is a 30 year fixed rate.) I don't see the need to pay cash for a home.
As far as renting, we had to live somewhere. To save money we moved into a 2 bedroom apartment and lived there for over 4 years. I built a tripple bunkbed and a double bunk bed for the boys. That was fine and we figured we could live like that for a while. Only problem was we had a daughter and my wife and I figured saving money is nice but we needed a bigger place. We were looking to rent a 3 or 4 bedroom home somewhere. In early 2010 a friend forwarded an email to me. I checked it out and called up this lendor that specialized in first time home buyers. The more we looked the more we liked what we saw. Realize that the market was approaching its lowest point, in our area anyway. Over a period of 3 or 4 months we went to classes, prepaired ourselves and decided that we could buy a home. We needed to come up with 3% of the sale price and I had that money in my retirement account.
We ended up buying a bank owned home. Our mortgage payments were lower than rent for a similar home. Since we had to move anyway I saw this as a big plus. Another plus that we saw was rents have increased. The place where we used to rent that 2 bedroom apartment now charges people what we pay for our mortgage, insurance, and property taxes. We paid $310,000 for our home at or near the bottom of the market. Home prices in our area shot up and late last year a few homes in my neighborhood, similar homes to the one we have, built the same year by the same builder, all on the same size lot, sold for $415,000, another for $430,000, one sold for $480,000 although it did have a second story addition over the garage. The market is still far from its $700,000 range that it hit back in 2007 before the bubble burst. Still I am thinking we made the right decision on buying a home. We could have waited as you suggest. The point is that we needed more room for our family, home prices had become affordable, interest rates were low. It was a perfect situation for us to buy a home. We have never regretted that decision.
On a side note buying a home to live in is not a bad thing to do. Instead of renting you end up building equity. You have an asset that you can sell later on. You own something. Eventually you could be in a postion to have that home paid off. With an apartment you pay it off for someone else. It would be better if you can pay cash for a home but that is not always the case. I wouldn't advocate putting off the buying decision for someone that is in a position to buy, especially if prices are going up. With us we just figured up or down, we needed a bigger place and when we found we could buy one instead of renting then we had to jump on it.
Ok, interesting. But keep in mind that buying vs. renting depends on area and expected appreciation, and is also not the same decision as buying outright vs. buying with a mortgage.
"Live within your means" as a phrase and as a popular figure of speech, would seem to be self-evident and obvious, at least on the surface. Simply put, it might represent not spending what you don't have. However -- and this is a big "but" -- it can also get incredibly frustrating to have people automatically parroting this phrase, for several reasons. First, the "means" with which one lives has gone down, not up, over the past 30+ years, with wages not being fairly-adjusted to inflation. What this means on a practical level, is that with the varying levels of inflation and deflation of the dollar over the past few decades, people's standards of living have gone down, not up. It was much easier to "live within one's means" in 1950, 1960, and 1970, than it was was say from 1980 - present. Houses that could once be bought decades ago on a single-income family salary for $25,000 may now, in 2015, cost as much as $750,000+, in certain residential areas. This is an extreme example where it is obvious that the financial industry has "moved the goal posts" of what living within one's means represents today in 2015, vs. what it used to mean.
While observing some degree of "living within one's means" would actually seem prudent and even wise, it almost sounds like some people may take it to drastic extremes, where it is used as a justification for endorsing the gradual (and involuntary) reduction of people's living standards, over time. While also serving as an apologist of sorts to the well-off, well-to-do, and the wealthy. Keeping in mind that it is much, much easier to live within one's means, so to speak, if one is already well-off in the first place.
At sane time as salaries have only as whole gone up slowly ;the prices of good normal to survival have stay low. I am 67 and have never seen the standard of living drop. certainly now money sis spent has changed. One thing is that stats just released show nearly same amount spent to buy food in restaurants as grocery stores. Basically people have chosen to spend differently. Having lived since the 50:I do not think many now days would want to return to that standard. Most have a Hollywood view of what it was really like. House only cost that in very high priced areas really and they certainly are not the houses bought in the 50-60's by common people. Homeownership historically has run at 65% ,and they got into the 70% range before the crash.
I am 67 and have never seen the standard of living drop.
In general for your age group they haven't. It's the younger ones that are hit the hardest, because the economy has never been good during their working lives, and it's been particularly bad lately.
At any rate we shouldn't be satisfied with stagnant living standards. We certainly weren't at any other time in our history! From 1825 to 1975 we averaged a 2% yearly increase in real income. Why has it been essentially flat since? If the same trend had continued our incomes would be >2x higher now than they are!
Also the median house price has risen 3.5x since 1960, CPI adjusted.
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