"John A. Weeks III" <john[at]johnweeks.com> writes:
- quote -

Why the move? Chances are that moving from a place where
homes are $400k to a place where they are $125k also means
moving from a place where salaries are higher to where they
are lower.

I strongly agree with the "live cheap and save up more money"
idea, though. If you split a rented apartment with someone
for a couple of years, living _way_ below your means, you
may accumulate a substantial down payment in only a few
years and then be able to actually afford that house.

In the long run, in fact, it might be better to stay
in the higher-cost area *throughout* your working life. If
you can save the same percentage of your income regardless
of where you are (assuming, though it's not really quite
true, that salaries and other costs both move in tandem),
work in a high-cost/high-salary area - _then_ move to the
lower cost area later when you no longer are working.

- quote -

That's _great_.

- quote -

Strongly agreed. Saving for a house should not derail
saving for retirement. It's similar to the question of
whether one should be saving for one's kids colleges
as a higher or lower priority than saving for retirement.
For both a house and kids education, folks will (a) lend
you money and (b) be able to find less expensive options
when the time comes, if necessary. Nobody will do either
of those for your retirement.

- quote -

Extra-true - the tax advantages of retirement accounts
all really only work over time.


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In article <ceue7h$3j5[at]odah37.prod.google.com> ,
<peanutbutterjellyyummy[at]yahoo.com> wrote:

- quote -

That is doing pretty good. Any debt to speak of?

- quote -

I don't see what buying a low end condo is going to do for you. Sure,
you might get lucky and get a increase in price when you sell, but
that is far from assured now that we are at the top of the market as
far as price goes. You could easily lose 20% just as well as make 20%.

I'd like to suggest (2) alternatives:

1) wait until you have a ring and a date. Put down 10% on one of
these $300K critters. Ask family to (your parents and her parents)
to help out as a wedding present. Time the closing to move in after
the honeymoon. You may be pushing things, but get her a job, and
things will work out. You may need a home equtiy loan to cover
the shortage in the 20% down payment.

2) live cheap and save up some more money. Then move someplace
where new homes are like $125K rather than $400K. Set it up so
your payments, if any, are so small that you can afford to work
for far less money, and still save like gangbusters for retirement.

- quote -

Yes. Your biggest friend for retirement savings is time. You cannot
afford to miss any time when investing for retirement. The risk is
that you get 45 or 50, and now you have no time left for the big tax
savings to work in your favor.

- quote -

Most folks see the long term vrs short term cut-off at being 5 years.
If you will need the money within 5 years, put it in safer investments.
If you will not need it for 5 years or more, then stocks and funds
are OK. The logic is that you can have down years in the market, but
a 5 year period with a loss is pretty rare (though we are in one right
now, surprisingly enough).

Good luck with your plan.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
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I would appreciate some advice on the best strategy to meet my
financial goals.

This is my current situation:
-I am 30 years old. My girlfriend is 23. We are not engaged, but we
may get married some day.
-I rent an apartment with roommates.
-I have a $24k emergency fund in a money market account, $32k in my
401k plan (mutual funds), and $15k in a brokerage account (my "home
down payment fund").

Real estate in this area is very expensive. The lowest-end condo's
cost between $150k and $250k. Low-end family-sized houses cost between
$300k and $500k.

My goals are:
-to buy a low-end condo in two years, with a 20% down payment
-to buy a family-sized house in seven years, with a 20% down payment
-to comfortably retire someday

Currently I am putting $1000/month into my 401k and $1000/month into my
brokerage account. What I am trying to determine is:

-Should I really be putting money into my 401k while also trying to
save for a down payment, or would I be better off expediting a condo
purchase (saving money on rent).

-My brokerage account is primarily invested in stocks and index funds.
Since I want (but don't necessarily "need") to be able to use that
money in a couple years, would I be better off keeping that money in a
money market account or CD?
Any advice would be much appreciated.

Thanks!