How I Will Be Rich

This is the final step in my ongoing theme “The 8 Step Process to Being Rich“.

Living in San Diego, with what my current income is… That’s about what I can afford.

In my post, “Buying Vs Renting: Is Home Ownership Really Worth It“, I described why I’m pretty much better off renting at this time in my life and why it just makes more financial sense. That’s not to say I don’t ever want to buy a home. If anyone’s ever read my very first post one this site, I describe my goals in life. One of my all time goals in life is to make money in Real Estate. I would love to own a few homes, have renters, and make thousands of passive income dollars a month collecting rent. San Diego, however, is one of the top 5 most expensive places to live in the country. With my current salary, I could never afford a mortgage. I’d be living in a place like that picture above. In order to afford a house, I need to keep on course with my investments (Roth IRA and Discretionary), adopt a more frugal lifestyle, make some money off of blogging, sell the junk I don’t need or want anymore and start my own business. If I can stay the path and achieve the goals I’ve set for myself, I can eventually buy a home and start making a whole new set of real estate themed goals.

I don’t own a house but I have done a lot of research. Some people may not value my advice as much as someone who actually owns a house but I’ll throw it out there anyway.

• When finding a mortgage, try to get the shortest term possible. If financially possible, get a 15 year mortgage. You will pay so much less in interest over the lifetime of the mortgage.
• Have all your debts paid off before attempting to get a mortgage. You’ll have much better options available to you if you have a high credit score and will get approved for much more with no debt.
• Pay the money for the proper inspections before the purchase. You don’t want to end up moving in to a money pit.
• It’s better to find the worst house in the best neighborhood than the best house in the worst neighborhood. You’ve heard that the three most important factors in purchasing a home are location, location, location. Well I believe that to be true. I’d rather fix up a home in a nice neighborhood to bring up the value than to have a nice home in a crappy neighborhood where the value may never increase at the same rate.
• Steer clear of no money down mortgages, 40-50 year mortgages, interest only mortgages and adjustable rate mortgages. Right now, the reason there are so many foreclosures is that people have funky mortgages that they can no longer afford due to increasing interest rates. A fixed mortgage offers piece of mind that your mortgage will never increase.
• And finally, don’t buy a home you can’t afford. This sort of goes hand in hand with the last piece of advice. People try to buy homes that are way out of their price range by using these exotic mortgages. Now people are starting to realize that maybe they should have bought a little less house with a little bit more of a sensible mortgage.

Those are my tips and that’s my 8 Step Process to being rich. I hope everyone has enjoyed the little knowledge that I’ve had to share and I hope to re-evaluate my goals and see the progress I’ve made a year from now.

-M

Popularity: 11% [?]

 Subscribe in a reader