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Real estate is cyclical. People who forget that will lose their savings.
Like other classes of investments - market value means what the next sucker (I mean buyer) is willing to pay, so in euphoric/low interest rate times prices are artificially inflated, and when rates go up and economy bad prices will drop hard. I always ask myself what will the next buyer pay when I look at a house.
Same with crazy customizations and features that are too unique to you. You will turn off future buyers will you try to sell. For example, two story family rooms are out. People who bought those in the 80s and 90s are having a hard time selling those houses because new buyers realize all the noise and heating problems.
Buy what you can afford. Don't look at $500k houses if your income is $80k.
we made sure we had a home, some savings and an income to support raising that child - didn't you? it took some time. and guess what? spontaneous twins! whoa! 2 daycare tuitions! thank goodness we were further along in our careers that it didn't derail us! if we had kids 5 yrs earlier it could've been bad news (we don't live near family and my mother nor my IL's were in any position to help).
i think overall we are not very far apart on this issue, but it seems you are having a hard time rationalizing people choosing a different path than you if it means you have to sacrifice more than you personally are comfortable with. you yourself said it correctly "there is no correct time and correct money for having a child"!
again, if the child is loved and well taken care of, WTH is the difference if the parent is 35 or 33 when he/she is born?
i don't live near family either, and we are expecting our 3rd. we found a less expensive daycare for our 2 children, to better prepare for our 3rd. i'm not having a hard time with different paths than mine. what if you had triplets? would 3 daycare tuitions have been sustainable? what if you had medical issues? the point is, sure, if it happened 5 years earlier, you wouldn't be in as good of a position...but what would you do? leave them on the curb? no....you'd make it work. and you know what? if you're renting instead of owning a place....you have even more flexibility to reduce your monthly expenses by moving to a cheaper home....so i still don't agree with Marc's comment that you should put off things like having a children so you can put 30-40% down on a home and be "prepared".
marc wasn't talking 35 vs 33...he was talking don't have a kid in your 20s.
Buy what you can afford. Don't look at $500k houses if your income is $80k.
this. plain and simple. if you do this, it won't matter if your house drops 30% in value. if you can afford the payment, have an emergency fund to weather unexpected issues, you're going to be pretty good. no plan is perfect, but if you live well within your means, it shouldn't be very challenging either.
i don't live near family either, and we are expecting our 3rd. we found a less expensive daycare for our 2 children, to better prepare for our 3rd. i'm not having a hard time with different paths than mine. what if you had triplets? would 3 daycare tuitions have been sustainable? what if you had medical issues? the point is, sure, if it happened 5 years earlier, you wouldn't be in as good of a position...but what would you do? leave them on the curb? no....you'd make it work. and you know what? if you're renting instead of owning a place....you have even more flexibility to reduce your monthly expenses by moving to a cheaper home....so i still don't agree with Marc's comment that you should put off things like having a children so you can put 30-40% down on a home and be "prepared".
marc wasn't talking 35 vs 33...he was talking don't have a kid in your 20s.
Actually, married at 21? By 28 you should be good to go as long as both members of the couple are working and saving and living the good life of self-denial directed toward realizing bigger goals. It could even be reduced to 5 years if there is true dedication and perserverance.
It's not the only formula, but it's a damned good one. And the discipline required yields ancillary benefits that stretch into every aspect of life.
this narrative is such b.s. generation Y witnessed their baby boomer parents use incredible amounts of leverage to fund the 'keeping up with the joneses' lifetsyle. that left a lasting impression on the generation, which is why generation Y pays it's monthly credit card balance off in full at a higher rate than any other demographic (if they even use it), and we save for retirement at a higher rate than any other. it's always comical to read these narratives though.
If you buy a home, you shouldn't worry about the rate. The price is more important, buy what you can afford.
The price of the house alone can not be considered on its own--it needs to be weighed in context of the taxes and interest rate.
Monthly payments for a 350k house with 10k in taxes and a 5% rate are very different from a 350k house with 5k in taxes and a 3.5% rate.
this narrative is such b.s. generation Y witnessed their baby boomer parents use incredible amounts of leverage to fund the 'keeping up with the joneses' lifetsyle. that left a lasting impression on the generation, which is why generation Y pays it's monthly credit card balance off in full at a higher rate than any other demographic (if they even use it), and we save for retirement at a higher rate than any other. it's always comical to read these narratives though.
Absolutely!! The single most important goal of any generation is to leave behind a country that is as good if not better than when they entered it.
"After graduating from being insufferable hippies, Lucy's parents embarked on their careers. As the 70s, 80s, and 90s rolled along, the world entered a time of unprecedented economic prosperity. Lucy's parents did even better than they expected to. This left them feeling gratified and optimistic."
When I think of the baby boomers, sadly I can only think of two things....
- "insufferable hippies"
- unprecedented economic prosperity and the missed opportunity to take advantage of it for the good of the country.
Oh yes... the third...
- Powerful voting block to always make sure entitlements that favor that age group always gets attention while those that favor the yet to be voting-age generation get shoved aside.
Those in "The greatest generation" should have pressed to teach the lessons they learned. They are a generation that truly survived the test of life. My immigrant older parents have more in common with that generation and made sure I learned how to respect income.
The Gen Y... don't repeat the same mistakes.
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