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Home sweet home: It’s better to own than rent!

It’s hurricane season and many of us are scurrying around looking for stuff. I hear that there is no more plywood on the rock! Wow. It’s good to see people protecting their property. I found it interesting yet not surprising that landlords generally care more than tenants. Talking to landlords; they’re worried about the storms. Speak to tenants; they’re like, “Whatever”.

This drew my attention to a debate I observed between a young person and an older hustler dude; about whether it is better to rent or buy. In short, the older dude won the debate and it is clearly better, if you can, to buy a house versus renting. More on this after the top 20.

Up to #1 is

Climax by Usher. Tumbling to #2 is Pop Queen Rihanna’s hit,

Where Have You Been? Dropping one space into the #3 spot this week is

Birthday Cake by Rihanna and Chris Brown.

At #4 is

Titanium by David Guetta featuring Sia. Up to #5 is the crossover dance hall hit

She Doesn’t Mind by Sean Paul. Slipping to #6 is

Wild Ones by Flo Rida featuring Sia, a high-energy dance track.

UP to #7 is

Link Up by Destra, a monster soca hit for the year. Down to #8 is

Cheater’s Prayer by Christopher Martin. Improving to #9 is

Wide Awake by Katy Perry. Up to #10 is

Mercy by Kanye West, Big Sean, Pusha T, 2 Chainz.

Somebody That I Used To Know by Gotye featuring Kimbra, advances to #11. Tumbling to #12 is

Call Me Maybe by Carly Rae Jepsen, a track that industry experts are calling the song of the summer.

Improving to #13 is last week’s essential new tune,

Whistle, by Flo Rida who has become a household name on the dance music circuit thanks to a slew of hits. On the way up at #14 is

Lights by Ellie Goulding, a popular new dance track. Falling to #15 is

Starships by Nicki Minaj. Slipping to #16 is

Glad You Came by The Wanted.

Now the new music section. Up to #17 it’s last week’s essential new tune,

No Lie by 2 Chains featuring Drake. Falling to #18 this week is

Boyfriend by Justin Bieber.

Now this week’s essential new track. In at # 19 is

Scream by Usher, which is racing up the dance charts. New at #20 is

I Can Only Imagine, a huge dance track by David Guetta featuring Chris Brown and L’il Wayne.

Now back to this week’s topic it is better to buy than to rent. A buddy of mine owns a crib. The dude is in his late 40s and is a hustler. He was hustling at one of his side hustles late one evening when a young person asked him why he was hustling so much. He smiled and said to the young person, “This is why you young folks will never own anything. Y’all don’t wanna work to get it. Then when you get to be 50 you will not own a house. Then when you’re 65 you will be still paying rent.”

This is a profound statement and there will be many who will say it can’t be done and it is too expensive and it is not possible and find all manner of reasons and excuses why a person cannot purchase a home. I for one beg to differ. It really is a question of whether a person is willing to do what is necessary to own a home, in a legitimate manner! Too many people are not willing to do what it takes. These same people will say that they cannot or will never own a place because they are just not willing to make the kind of sacrifices that it takes for a young person to own a piece of the rock.

Well, I’ve done it and can offer some advice as to how to do it and why. I will start with the fact it is not easy.

If you rent for 30 years and spend $2,000 per month, you will have spent $24,000 a year and $720,000 in total, over that 30-year period!! Most people have spent more than $2,000 per month in rent, so you can probably up that number to closer to $1 million over a 30- to 35-year period.

Wouldn’t it be better to have used some of that money paying off your own mortgage, rather than paying off someone else’s? I know that it is hard to save the money to get the down payment but wouldn’t you rather make a sacrifice, live in a smaller place or live cramped with family or friends for a few years, save enough for the down payment and then buy your own place eventually?

The problem, again, is that people don’t want to make those sacrifices!

So let’s take a family of four. The head of the household is a guy of 30 years old. He rents for 30 years, or maybe 35, and when he retires at age 65 he no longer has the income he used to have; but is still required to pay rent! And when he does the math, he can only conclude that he has squandered away nearly $1 million.

I promise you that if you ask this man, at age 65, if he wished he would have made some sacrifices earlier, he will say, ‘Hell, yes’.

You cannot look at wealthy people and say they have it easy or you wish you had their money or despair and say you cannot do something. Even in rich families, somebody, somewhere along the way had to make the sacrifices and sound investments to make the family rich. Why don’t you try to be that person in your family?

Here are some ways that a young person can buy a piece of the rock:

1. Try not to have children before you have completed educating yourself to the point that you are qualified in a trade or profession that can provide you with sufficient earnings to support you and a family.

2. Try to live with your parents and/or family as long as possible and save your money.

3. If you cannot stay with family or friends, live modestly, find the cheapest place you can find and tough it out for a few years.

4. Try to get a head start and purchase whilst you are young, before you are married and before you have children. If you’re worried about a spouse who comes along later taking what you’ve earned on your own, put it in a trust.

5. Try not to have too many kids, unless you’re making big bucks. US statistics show it costs $250,000 to raise a child to the age of 18, but that does not include the cost of a college education. If you add in college, it costs about half a million dollars; a master’s degree ups the ante.

6. Don’t think that you have to purchase your dream house the first time you buy a piece of real estate. Buy a one-bedroom condo to get in the game. Then after five years, or when the market improves or after you’ve built up some equity, you can sell it and upgrade for a bigger place. Do that every five to ten years until you eventually get your dream house or something that you can accept.

7. Look for safe investments that will grow your money.

8. Some of us spend more money on expensive clothes and Nike sneakers for our kids, the latest gadgets, unnecessary material items; and we don’t spend on wiser investments, like real estate or a kid’s college education, that may help that child to have a better quality of life.

9. Bring your lunch to work and save your money. You can spend $20 per day on lunch that’s $100 per week.

10. If you intend to marry or find a life partner, choose carefully and take your time choosing. Choose someone that you can spend the remainder of your life with, because divorce costs megabucks and when families split the home is usually lost or sold, leaving either or both parties to go back to, guess what? Paying rent again.

For those who worry about real estate values going down, I share the following truth. If you rent for 30 years you will have zero dollars at the end of that 30 years, from the money you spent in rent. And who wants to be 65 or 70, on a pension, unable to afford rent? Not me. And I’m sure not you either!

Peace ... DJLT.

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Published September 07, 2012 at 7:00 am (Updated September 06, 2012 at 7:36 pm)

Home sweet home: It’s better to own than rent!

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