A smarter entry into housing
BUYING a home seems to be every Australian’s dream, but unfortunately this dream comes with a downside that no one ever really considers.
For most, signing a sale agreement also means signing a loan with a financial institution, and being enslaved to the banks for 25 years or more.
In short, you lose the freedom and flexibility you once had, as well as control over your life, as the banks lock you into working hard to pay them so they can get rich on your money.
Time and time again statistics prove that when you consider the cost of buying a home, in addition to the interest that is accumulated during the term of the loan and the cost of maintaining the home over 25 years, the value of the house is roughly equal to the amount paid.
A smarter way for younger people to buy into property is to buy an investment property and have the tax man and tenant help pay for it.
Even better, young people should look to invest their savings in top-quality stocks on the sharemarket to assist them in growing their capital so they can start investing in property sooner.
It just makes sense, given that building wealth in the sharemarket is possible with small amounts of capital and allows young people the freedom to achieve their goals without feeling like they are being chained to a boat anchor with a large mortgage.
Isn’t it about time we started teaching our kids a better way, rather than burdening them with the financial stress of owning a home?
As expected, the sharemarket continued lower towards the bottom of my target zone of 5600 points.
While this is my target for the current fall, we need to remember it is possible for the fall to continue to about 5550 points in the next week or two.
All this talk of a recession is exciting given that markets tend to rise during these times and so I still think my target of between 6200 and 6400 points is very achievable in the second half of this year and could quite possibly occur around August.
For the next few weeks it is wise to sit tight until we can confirm that the new upward move is under way, at which point some good buys may emerge.