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맨 끝에 3줄 요약을 넣어야 겠음.
바쁜데, 650 페이지 책 읽을 시간은 없을 것 같고….
70 chapter 책을 다 읽는데 5분….
이런 식으로….
70
Not Solving Housing Problem Quickly
Owning the house completely is like making an extra $100,000 salary a year by itself.
-Brad KongSolving the housing problem means getting out of rent or mortgage completely. My recommendation is buying out a condo or small house by cash at one time if you can. I know it is very hard. But, dangling a housing issue will only bring you more problems. And, it will cost you more if you do not solve it quickly: The longer you hold rent or mortgage, the more money you will lose on it.
I understand it is not easy to buy a small condo with full cash. But, I notice that there are a lot of people buying a bigger house with a mortgage even though they can afford a small one with cash. They may think they can live more quality lives in bigger houses. Or they think these are better investments, at least: Neither is correct. Bigger houses often will bring you more repairs, headaches and bills. A bigger house can be an investment, but may not be a good one after all the expenses like high property taxes, maintenance, etc.
After getting a mortgage for a big house, people may pay off the mortgage within 30 years. But, if things do not go smoothly, they can experience hell in real life. You will never know what will exactly happen because 30 years is a long time. Also, even if people pay that off within 30 years, they will end up losing way more money than people who bought it with cash at one time. Simply, it is pointless to work hard or longer while you have a rent or mortgage. Let me give you three reasons more specifically with details.
First of all, a rent or mortgage will cost you way more money than condo ownership. Unless you get out of these, you will keep draining the largest part of your income every month. Most people in Chicagoland pay $1,200 a month for one-bedroom apartment rent. I have paid a $350 association fee a month since I bought out a one-bedroom condo in 2013; that fee includes heating, water, garbage, cleaning, landscaping, swimming pool, cooking gas, etc. That is about $800 saving a month compared with Apt rent after deducting my property tax ($1,700) every year. That will be $10,000 saving a year since some apartments do not include utilities at all. I would say that I have saved about $90,000 in the last nine years.
When I compared my situation with a mortgage payer for a big house, the result got even more ridiculous. There is one Korean web community where I write articles occasionally. A lot of these people are from the east and west coasts in America. In general, the house prices in those areas are three times higher than Midwest due to more populations. They talked about “$200,000 salary” or “ $1,000,000 houses in California” all the time. I feel sorry for people who cannot afford a small house. But, I notice that these people often go for a bigger house mainly to show off.
I would say that paying off a house and living in it without moving out will be like having an extra $100,000 salary job by itself in those areas. In a money sense, there is no difference between “Making $200,000 and spending half on a mortgage” and “Owning your house completely and not having a job”. I am not saying that you should not have a job. But, if you make money while owning a house completely, you have a superpower. You will save money much faster than others.
Secondly, did you know that you can end up paying double the amount of a house when you pay by 30 years of mortgage? The longer it takes, the more you pay in the end. Even if you go for a mortgage, the total amount would get noticeably cheaper if you choose a shorter term; For example, a 10 years of mortgage would be way cheaper than a 30 years one. Shorter than any mortgage would be cash payment upfront. In this case, you can actually get a discount on the house since the seller wants to get paid right away. They do not want to wait for a couple of months until the buyer gets approval from a bank. I would say there is not much point in working hard or longer when you have a long term mortgage.
Thirdly, it is a great mental relief when you do not have a mortgage and never have to worry about it again. There is a Thai-Malaysian Buddhist monk named “Venerable Ajahn Siripanyo”. He is a Thai monk from Malaysia and well known because he is the son of Malaysia’s third richest man, Ananda Krishnan. When I listened to his lecture, this is the first thing he said.
“There is nothing more important than peace of mind.”
Believe it or not, our brains have a limited capacity to worry about things. It is not like we can worry about unlimited things. When you have one less thing to worry about like a mortgage, you can use that portion of brain power to focus on something else.
When I watched the movie, “Ali” starring Will Smith, there was a scene where Ali got a phone call from the Supreme court while he stayed at home and took care of kids. He finally got a court decision as he had waited for it for months at home. I am not sure if he was blocked from his profession, but it is common that we cannot do our job normally when our case is waiting in court. Having a mortgage would be something like that. It is a sort of minor worry you carry all the time and you cannot give yourself 110% in your job. You would not worry if the mortgage is 10% of your salary. If you are that wealthy, probably you would not have a mortgage to begin with. A lot of people pay 40% of their salary only on mortgage and cannot focus on anything else. That is a big waste of mental energy only for housing.
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Summary
1. Get out of rent or mortgage as soon as possible.
2. Do not buy a big house with a mortgage when you can buy out a small house or condo with full cash.
3. There is nothing more important than peace of mind.
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슬그머니 수정했네 ㅋㅋㅋ 인도 사는 킨더가든 꼬마가 너보다 영어 잘할듯.
브래드 good luck! -