Plan for the Future?
Some of us are good at choosing our careers and creating a financial strategy – a solid plan for the future self. I am not one of those people.
Recently, I was asked why we made the decision to sell our home rather then rent it out while we spend a year on the road in a travel trailer. It’s a very good question. We could certainly rent out our house for more than the mortgage payment. The surplus from the rent payment could cover some of the expenses we incur on the road. That sounds reasonable enough – sounds smart actually. Win-Win as they say. One year of gypsy life and go back to the warm embrace of home. This is the part of the story where the details of our life throw a wrench in the thought process.
You see, having a plan for the future didn’t fit into the youthful drama that was playing out at the time. I never had a head for or an interest in the stock market and neither did my husband. That is to say, we are what I would describe as passive financial investors. As it was, in our younger years, we barely had two nickels to rub together. We carried ourselves on our own steam and as the years went by and incomes slowly got better we put money into savings and had the typical employer sponsored 401k plan and Medical plan.
Things were always a bit tight but we were conforming quite nicely. We looked like everyone else and I was proud of this accomplishment. It meant I was now a grown up – with one remaining obstacle. Get yourself into a 30 year mortgage loan with a high interest rate. And so we did…
Burned
The years rolled by, we bought our first house, sold it, bought another and then… the economy had other plans. You see, we didn’t understand how the real estate market actually worked back then and reservedly believed all the hype about buying a home that was way over valued because it would just keep going up in value. You can’t lose, right? It was very circa 1920’s “before the crash” kind of thinking and we all know how badly that turned out for a lot of people.
Five years in, and much money spent on home improvements, and I was abruptly laid off from my “techy” job. This made paying an insanely large mortgage impossible on a single income if we wanted to stay financially viable. As the “homeowner” we tried to work with the lenders loan servicing agency and we were told loan modification was not possible. We’d have to sell. Of course, we were terribly upside down on the loan so it would have to be a short sale. What a stressful process! In three days the house sold to a cash buyer for $115,000 less than we paid for it. Our perfect credit score, the one we had worked on for decades to prove what good and trustworthy people we were, became kryptonite overnight.
Alright, we got burned – lesson learned. For the next three years we became renters once again. During that phase we had to deal with yearly rent increases on homes that had bat crap falling out of the ceiling cracks, faulty electrical wiring, plumbing issues (the epic septic tank overflow of 2012 due to a broken pipe), windows that would not open, and massive water bills to maintain the landscape. More money wasted… Now what?
Doing it “Right”
I got the brilliant idea to ask my sister if we could live with her for a year so we could save money and get back into the housing market. She graciously, and at points later, regretfully, welcomed us into her home. I say regretfully tongue-in-cheek because as every one knows the best of friends can have a hard time living under the same roof. They soldiered on and because of their sacrifice we were able to accomplish our goals. It also afforded me one of the most precious times of my life – to spend time with and care for my aging parents. My father died just a year after we left.
Let’s wrap this up. With the help of one of my brothers (I have eight of them!) we were able to scout out a home, buy it, and relax in our own space again. We did it right this time and didn’t get in over our heads. We swore to each other that this would be the last home we ever purchased – our forever home. Therefore, we spent more money in necessary upgrades and repairs. Our new budget even included the possibility of job loss and sustainability with a lower income. Well, after four years my husband was laid off and struggled to find employment in his field. Eventually, he got a job that had nothing to do with his education – retail. This low wage job does not cover our bills and has no future growth or money making potential.
Life Now
Our life now looks very different. Not young but not old. No longer relevant in the high tech world from which we previously had some success. It’s time to change our game. A house is just an investment – buy low sell high. That is what we are doing. Utilize what we have before it is gone – monies, energy, and health. Convert all these pluses into the best dang dog years we can muster.
Is this plan the only path we can take for our future? No, of course not. However, we believe this path to be the best fit for our temperaments. By lowering the monthly expenses we free ourselves up to pursue our creative endeavors that will hopefully become our future income. This seems a better alternative to maintain our health and general wellness.
Remember, “what good is living this life you’ve been given if all you do is stand in one place”. – Lord Heron
Your making a perfect decision.
Stay on that road two years and save even more.
Home markets will get crushed and the low point of it, will be in two years, buy a home at that point.
GOT SILVER?
Thanks for the support Kev! Experience says what goes up always comes down. Two years of traveling and exploring? Yes – yes I think we will enjoy that :).
Sisters are best friends and will always be. We all had some life lessons to learn and will be forever grateful for the time spent with some pretty awesome people. Keep writing and sharing, it will be my window to look into when I need my sister near.
Thank you big! I definitely grew from that experience. I am stubborn, as you well know, but I learned some not so pleasant things about myself that I still work on everyday. What you did for us was a truly unselfish act that I will always cherish.