The subject of home ownership is one that I’ve gotten more interested in in the last 5 years. As I counsel and debate people about financial health, it’s one of the greatest points of contention. My primary obstacle with people is the broad assumption that owning a home is always a good investment. Also, the assumption that it’s always better than renting. When helping someone with finances there is a lot of time spent doing math but in the case of a home, the thing I try to get people to really think through is Opportunity Costs. What activities/desires/pursuits does a person have to take energy from, in order to pour energy into managing a house well? Is that person okay with sacrificing those endeavors in order to have the house? Endeavors that could potentially lead to more fulfillment, more health, and in some cases, way more money over time (which would make caring for a house easier).
Something that I’ve learned from my friends who have houses is the fact that something always needs to be fixed, updated, or cleaned up. Yard, roof, plumbing, electrical, paint, steps, decks, fences, windows, floors, ceilings, basement, attics etc.etc. It looks absolutely exhausting to me and it seems to be a never ending stream of chores and repairs. As someone trying to develop a unique business selling an intangible product, there has been tons of mental energy poured into the process of packaging and delivering my skills/abilities over the years. I haven’t cracked the code yet. I still believe I can and will, but that means I need to maintain control of my mental and physical energy. I’ll need that energy to run experiments with my business and endure the lean living associated with a business that isn’t making any money. A house means I have to halt that process and go get a fulltime job. Considering the current cost of Real Estate in the Seattle-Tacoma area right now, probably a very demanding job that pays really well. With that, as a single person, I would have to do all the physical work of maintaining the home. Also, I would need roommates to be able to cover the mortgage and other maintenance expenses associated with the home. I am now a property manager, handyman, landscaper, and landlord, on top of a demanding fulltime job. What about my business? I don’t know what happens to it. What about my health? Maybe I have time to exercise and cook, maybe (Shoulder Shrug).
Things can get pretty cumbersome, pretty fast. For me, making the choice to continue to say ‘yes’ to my business means saying ‘no’ to a house. I need that energy to pour into my passion and I’m taking the risk that one day the profit/fulfillment will be worth delaying certain luxuries. I’ve been chasing fulfillment for the past 12 years of my life. With the money that I was making as an Engineer fresh out of college ($60K/year in 2005) I could have gotten a home and, between raises and being aggressive with payments, I’d probably have paid a home off by now. But, of course, as I have outlined before, I was miserable as an Engineer. Would I have even lived long enough to pay off the house? I’m not sure how hard I would have had to self-medicate to keep my corporate job. I don’t want to know. I’m much more satisfied with the things I’ve learned and the experiences I’ve had as a result of choosing to sacrifice the money.
This all boils down to what you really deem valuable at any point in life. If you’re married, you have 3 kids, and crammed into a small space, then finding a larger home might be a reasonable solution to eliminating the stress that tight living quarters can cause. However, maybe learning to deal with that space and appreciate it, is a better option than trying to figure out where the extra money is going to come from. As I’ve briefly described, my first 3 years in the military involved paying off debt. When you’re a single/lower enlisted soldier, you have to stay on base. Well, you don’t have to, but the military is not going to give you the extra pay to stay off base, like they give to married soldiers and those of higher ranks. You stay in the barracks. As I’m sure you can imagine, Army Barracks aren’t very nice. Old buildings and community bathrooms shared with guys who get drunk every weekend. It can be disgusting and incredibly frustrating. Many single guys choose to eat the costs and live off base anyway. I could have done the same but it would have slowed my debt repayment process. I also didn’t have a car for the first 2 years of my military service. Again, I could have made the choice to prioritize getting a car but it would have slowed down debt repayment. So I lived on base and I learned to let the experience shape my perspective for the better. I learned to value my friendships more. I began developing a reading habit as a way to pass time. I learned to live with less and appreciate the little things.
Of course, this allowed me to save some money in my final 2.5 years in the service and that allowed me to transition back into civilian life without fear. I knew guys who wanted to get out of the military but they had 2, sometimes 3 mortgages, in different parts of the country because they felt it was always better to buy a house than rent. One house for each duty station. Again, we have to consider whether or not we are truly satisfied with life as is. In particular, work. Do you really want to keep the career you are currently in? If so, great, anchor down and settle in. However, if not, you really have to consider how much freedom you want to run career experiments. This definitely becomes more complex as you deal with marriages and families. It’s a huge part of why I tell kids to delay marriage. Spend some time figuring out what’s most important to you before you bring other lives into the process.
If you are in a family situation and there are some changes in career path you want to make and you know your significant other will balk, what do you do? I’ve been asked this question many times. No, I’ve never been married and I don’t have kids but I would argue that there are some things common to all types of relationships (married/friends/coworkers etc.). If you are married and want to make some adjustments that would cause a need for large financial shifts, here are three things to consider:
- Communicate early and often, with tact and empathy for the other person. Don’t spend two years hating your job and staying silent about it, only to lose it and quit one day and have to go home and explain why you suddenly went off the rails. When you know a shift may need to happen, don’t avoid the conflict. Communicate early and let the discussion begin to evolve with all the tension and difficulty associated with it. That’s got to be better than a sudden mental breakdown from persistent silence.
- Do your due diligence. It doesn’t cost you anything to research and collect all the data you need to weigh and consider with a significant other. It also shows you are serious and not just daydreaming. As you open up the conversation, collect information and DEAL IN REALITY! What we see happening in our heads is always going to be different from what actually happens.
- I presume that a majority of those reading this who are married were not forced into marriage/parenthood by threat of death. FLAT OUT – YOU CHOSE! Take complete OWNERSHIP for your life. You can choose to see the circumstances as an anchor weighing you down or you can see your family as the real life inspiration you need to do all the critical thinking it’s going to require to make the changes you want to make and maintain peace in your home. Yes, it’s difficult. Be willing to compromise on what you see in your mind. As the reality of the shift unfolds, pivots will be required. Your family will demand compromise and they should. All healthy relationships involve compromise.
It might make all the sense in the world financially but if it limits your ability to pour your energy into something you are truly passionate about from a work standpoint, is it worth it? Let’s go beyond that… If all of our time and energy is spent taking care of the house, are we still taking care of each other? Are we filling up our houses with things we don’t need, that then require our attention to maintain? Could that energy be better spent repairing a marriage, or connecting with kids, or connecting with family/friends?
I know all this is counter cultural and atypical but I deal with so many people who are struggling with debt, career dissatisfaction, lack of purpose, or a combination of these things. You need energy to figure out what you are passionate about and how to have a life that works with that passion. If we give that energy away to things that aren’t truly necessary, then we do ourselves (and those we love) a disservice. There’s a lot of personal reflection that’s needed on this one and the answers aren’t simple, but answers don’t come at all if there is no struggling with the problem.
I Love You and Wish You the Best!