HOW WILL REAL ESTATE PLAY INTO YOUR FINANCIAL FUTURE?
June 25th, 2008 categories: Buyer Strategies, Mortgage & Finance, Seller Strategies
As you look forward to a later time in your life, have you thought much about how real estate will (or won’t) contribute to your overall financial security? Most people would welcome not having a mortgage to pay, especially at a time in their life when they are at or near retirement.
There was a revealing study referenced in the July 02 issue of Money Magazine. The gist of the article was to encourage readers to realize what a significant part real estate plays in the total assets of most Americans. Among the economic middle three quintiles of Americans – that excludes those in the top 20% and the bottom 20% – it was reported that the principal residence composed 59.8 % of their total assets. In other words, for the middle 60%, their total wealth is 60% real estate.
To the extent that this study is accurate, real estate is the primary way most people (60%) acquire most of their wealth. What are the implications, given current market conditions? I offer a simple proposition that is a reminder of something you already know. It is this: make good real estate decisions based on your goals, your circumstances, and the long-term perspective. Don’t make fear based decisions.
That is not an argument to either buy or not buy, or sell or not sell. That depends on a set of personal circumstances and preferences, not media talk. In fact, life often has opportunities that are juxtaposed next to hazards and challenges. A certain amount of fear can be a gift, but too much clouds our vision, and we see only negatives, when in fact both hazards and opportunities exist in most situations.
For some people, the current market is triggering a fear-based orientation. But for others, it is a time of opportunity. Which of these two it tends toward for you, is based on very individual sets of circumstances and goals. But, some people are sufficiently unnerved by media reports and become frozen until talking heads declare real estate is not so bad after all. But others, who are taking a longer view, see opportunity. Whatever your situation, I encourage you to apply sound decision making with your future firmly in view. And do remember that if you are like the middle 60%, real estate could well be over half of your net worth.
By the way, if you’d like to have a solid set of steps on making good home buying decisions, click here to watch our free video before you start the process, Scroll down to “Buying Your First or Next Home.” No, it is not a sales pitch. It is actually an education production, and I’d be surprised if you did not find at least a few things that could save you a lot of time and stress. Definitely worth checking out.
