Encumbrances
Reading time: 3 – 5 minutes
Many a Sucker will tell you that you should get a house so you can write off the interest. They will tell you it’s the best investment you can make. They will tell you it’s the American Dream. They will tell you Now you are a grown-up. They will tell you that you are just paying off someone else’s mortgage. They will tell you to do it NOW because interest rates on loans are at a all time low. They will tell you now you can nail up that picture of Shaft without your landlord taking your deposit. They will tell you about pride of ownership. They will tell you about a great sense of accomplishment by finally becoming a homeowner.
Real talk I never could figure out how paying any amount of money back in 30 years was smart. I barely like owing credit cards money for 30 days. Look I want a house myself but I’m not going to make it into more than what it is. If I go into getting a house the way most cats do I’ll be overpaying and staying stuck in one place forever. In LA it’s damn near impossible to pay for anything less than 300k unless you want to deal with some wild stuff so buying a house is a life changing event.
In all things money to tie up your chips is a problem that stunts your growth. Tying up your chips stops you from opening a business. Tying up your chips stops you from leaving a job. Tying up your chips stops you from growing as rapidly as you could. See what most cats never figure out is that if they are not going to take a stab at a business then whatever raise they get from a job is not going to be significant enough to make moves with. So tying up your making move chips in a immovable object does more than just give you a place to hang your picture of Shaft. Tying up your chips in a house leads to you having to furnish it, maintain it and think about how to improve it. This is all fine and dandy if this is the end of the line for you but if it isn’t then it will suck the game right out of your pockets.
Now I know some cat is going to come and tell me you are paying the same with rent but that’ll be a DAMN lie. See most cats see a mortgage and think that’s it but you have taxes and homeowners insurance that your average renter is oblivious too. Also buying a house means you have to take your savings to put down on the house as the 100% loan is a dead idea. There’s more to maintaining a property than most people know until they jump in and they have to buy a water heater, pay a higher heating and cooling bill and add all of your crown moldings! LOL
When you encumber yourself with a debt that lasts for multiple years then you have to realize it will retard your hustle. If you are lucky enough to have a spouse who allows for your hustle then the house isn’t a problem. But, most likely the house is a sign that you are entering the middle class trap of kids, Jack & Jill and the buzz word of the year entertaining. Although a house is looked at like money in the bank it really isn’t because if you take a 2nd loan out on it the bank will tax you for what you accrued in appreciation! If you really are in this game to make money then you have to keep your cash unencumbered for as long as possible or until you encumber your cash into the hustle that produces cash!
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I always thought owning a home was useless unless it were multi family to be completely rented out and there was a nice chunk of income made off of it.
It’s a good thing to buy a home but it takes money from you. It’s not a asset becuase assets make money for you. A house never makes money for you and it takes 30 years to pay off. Most people only live so long so 30 years is damn near half a persons life. SO that means they are in debt for 30 years on something that is a shackle on them.
Mult family units are the way to go for sure as they return money but sooner or later you have to have your own house. I’m just saying a house is a drain on your hustle money and it has to be recognized as such.
I completely agree with this. If a property ain’t producing income, then it’s just a waste. To hell with all of that American Dream nonsense. Just look around at all the people who ended up with an American Nightmare because they thought buying a house was what they were “supposed to do”.
Everyone needs to buy a home it’s just that they need to make sure it’s not taking away from their ability to build. If the house is all you want then it’s a good move, if you want more you might want to get a really affordable house or a rentable property.
What’s worst than a house if people buy Range Rovers and expensive SUVs claiming they are tax-deductable…
Okay, this person spent $80,000 roll around that has 11mpg just to have something tax-deductable?
WTF?!
The whole tax deductible angle always make me smile a bit. I mean if your company is bringing in a lot of dough then I’d say think about it. But, for the cars you might as well lease them that way you don’t have to depreciate it. A lease allows for the writing off of the gas, maintenance and the payments. If you run a business that’s all you need. Even for those who need delivery trucks you might as well let Ford do the maintenance.
What cats really fail to realize if it’s a business deal then you can negotiate all the maintenance. Its one thing to have Joe Blow get a car it’s another for JOE BLOW bubblegum Inc to get a car. People should take advantage of it but not to floss but to get work done.
They have the right idea but just a flawed application.
As a homeowner and landlord, it’s not such a bad thing to have property. Thank God it’s paid for now, but before it was, the tenents paid the mortgage. A sweet deal all around. Yeah you gotta keep up with taxes and the like, but I don’t like living under the whim or circumstance of a landlord or property owner. I hear what you’re saying, but from this end it’s okay to have a home to call your own; as long as you pay your taxes!
Robminx
No I’m not saying it’s bad to own property. I’m saying if you want to build you should use that money for building and then come back to buy a house. The money used buying a house takes away from your ability to hustle and move. Not because a house isn’t important but because you are putting money into it every month.
You can downsize a apartment and save money but you can’t do that with a house. You can save money and move to another city but with a house you are semi-stuck there. You can abruptly leave and move away just leaving a apartment but with a house you have to wait to sell if you ever sell.
Owning a home is very important it’s just if you are building a business you should build the business first and then buy a house. That way you can have a revenue stream and can use the home equity to open up a 2nd or 3rd business location. The house is a asset to be used in the furtherance of your business. If you do it first you’ll never or have a hard time starting a business.