Maynooth wrote:
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Yes - not that there's anything 'wrong' with that. You'd use some of
your savings for the down payment, and then an extra 11-22% of income. I
suggest (others' may disagree here) that in this case a home isn't an
investment. It's a lifestyle. It's okay to want the yard, and the
ability to do what you wish to customize the home.

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I can't get into your brain and impart that on you. What I can tell you
is that someone who saves at the rate you do is able to invest and be
sure to have a good retirement, while enjoying yourself along the way.
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advise on starting your own business is beyond me. If you want the home,
you are in the right range 34%-45% isn't really "over your head", and
the willingness to have a roommate the first few years really makes it
manageable.
Investing in the stock market for the long term is the conventional
wisdom you'll find here. You may be an entrepreneur who starts a
business and bets your fortune on that.

JOE

"Maynooth" <Rural[at]ontarioonly.com.easynews.com> wrote in message
news:l7aqg.27587$lP1.18685[at]fe04.news.easynews.com...
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"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message
news:Xeidnap9rPIyvDXZnZ2dnUVZ_sydnZ2d[at]comcast.com...
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I have a favorable rent arrangement. Rent and utilities take about 22 or
23% of my income. that includes heat, high speed internet, land line phone,
water, central air, parking etc etc. I share a house with a young man my
age so there is a privacy issue but we work with it and I will renew my
lease with him for one more year.

Now with what I would make in income, the type of ownership I want, and down
payment and financing remaining principal A mortgage payment alone would be
between 34% and 45% of my income for my housing needs with a couple of
"wants". I could cut that number down by allowing a roommate myself for the
first couple of years as I am just a one income person myself. However
there is a privacy issue again and the screening of roommates etc. Maybe I
could get more housing by having a roommate but I would use the roommate's
cash for upgrades down the road, IF I EVEN want a roommate.

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At this point it's an emotional issue and no longer financial right?

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That's something I don't have PATIENCER!! perhaps it's my age and youth
that don't allow for pateince and it has to be learned....

I have completed two key phases of my emergency fund. The first phase was
to save 50% of my next car in the bank (and still use to remaining resale
value in my current vehicle to cover alot of the remaining 50%)

The second phase of emergency fund was to save 13 take home paychecks (6
months) in the bank as cash. This will be done shortly in the next month or
two at which point brings me to my questions on buying a home.

What do I do with my savings after the emergency funds are complete:

Save to start a business?
Save for home ownership?
Invest in securities?

A combination of above?

The idea is to use my savings as a method of growing equity. After all the
emergency funds are full, how do I get my future savings working for me....
it's a tough question and without some goals to mull over makes it even
tougher...


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Maynooth wrote:

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In the US, rates are going up and the housing market has passed its
peak, inching down.

I have no answer, just questions for you to consider;

What is your rent? And how does it compare to what a mortgage would be?
That would be your first starting point.

If the mortgage and lost opportunity cost of the own payment is less
than the rent, this may be a good move.

If not, you want to think about what a house will bring you vs the place
you rent.

Borrowing to buy a house and paying it back shouldn't be though of as
'forced savings'. That, to me, is the wrong motivation.

You should consider investing in stocks for the long term, through low
cost index funds or mutual funds. Investing over time will yield good
results if you are patient. You want to keep an emergency fund, and
invest what you have over that.

JOE

I'm a 30 year old single male, no college or university diplomas or degrees.
A Joe lunchbucket blue collar dude. Should mention I'm in Canada where real
estate prices are considered low but taxes are higher...

I've been debating if buying is a better way of forced savings than simply
sitting on cash. Currently I've been saving about 40 to 45% of my take
home pay into high interest savings account and short term deposits. I
could up my savings rates to 60% of pay But I would like to live a little
bit so I'll prolly boost it to 50% starting this month and hold it there.

I have zero debts owing. Flunked college loans, credit cards, car loans
are paid. I do not owe a red cent to anyone. Income is lower so lower tax
brackets which means I may not take advantage of government tax shelters
because If I go to use the money in 5 years lets say I maybe punished at
that time and I have two financial advisors agree with this point. At my
income currently pay the taxes on investment income now until my income goes
up. Once income goes up then the advantage of growing investment in tax
havens will pay off.


So let's say I have 50 - 60% of my take home pay (after ALL living and
entertainment expenses are paid for, food clothes phone razors case of beer
movie rental gasoline insurance etc etc etc) available for savings and
investments: Would it be a good bet that the saved money will do more work
for me in real estate ownership and the building of equity that comes with
it (and the joy of owning my own place), or is a better less riskier (less
stressful perhaps) to keep putting the cash away for another 3 or 4 years
the same way I have done it now this year.

My conditions for buying a small home were as follows:

6 months take home pay in the bank,

half the cash to pay for next car with the remainder paid in 6 to 9 months
when financed although with my taste in 2 or 3 year old American depreciated
vehicles it is likely the next car will be paid for in cash,

20% down payment on home,

half of "upgrading" money for home in cash with the other half of
"upgrading" money to be secured in line of credit. The Credit may not be
used but would be considered a net.

Some people have told me that those conditions are too strict and I'd be
better off taking a slightly higher risk into getting home ownership sooner
with less upfront funds and building equity sooner. Some of these people
include my boss and a couple family members, and not just other Joes... If
home ownership is not the way to get savings and money working harder for me
then what can with a safe risk instead of just sitting on money....