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Young Dreamer seeks wisdom
Old 01-06-2008, 09:07 AM   #1
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Young Dreamer seeks wisdom

What were the 3 specific decisions you rolled the dice on in life and:

1) Hit 7 or 11...
2) Crapped out...

What were the conditions and your rationale for making the decision at the time? Did you regret making the decision, not making the decision, or feel thankful you made the decision as it was later deemed to be a small "price" to pay for your later success?

I'll go first....

I think I'm at a such a point now. I have an opportunity to get a GREAT deal on a home that is a little bit out of my "psychological" tolerance. While I will be able to afford the home, I will have to let go of what today I consider things that are part of my livelihood--fine dining, being able to help family members readily financially, and above average miscellaneous spending.

Close self-examination suggests that I really need to enjoy the outdoors and do more community service more---all "free" and not "social" drains. I really believe making this purchase (aside from the potential, which I am not banking on) can really make me more focused afterwards. I've heard people say that having kids had a similar effect on them.

Net, I don't want to look back and say...."I wish I would have..."

Thoughts...

MFG
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Old 01-06-2008, 09:39 AM   #2
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My "jackpot" was stretching to buy a house in San Jose in 1997 for $239K, which was an extreme stretch for our finances at the time. We moved in 2003 and we sold it for $440K. (Waiting two more years or so would have brought that over $600K!)

My mistake was buying the house in Houston after moving from San Jose. We only wound up being there for three years, and all things considered -- including sales commissions and cost of repairs and renovations to get the home ready for sale -- we lost about $55K.

So if I had it to do over again, the one thing I would do differently is keep renting while we were in Houston.

Guess we're ahead overall where home purchases and sales are concerned, though.
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Old 01-06-2008, 09:54 AM   #3
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http://www.early-retirement.org/foru...-go-32184.html
LIBOR ARM: I think I broke mine! : )
Gross anatomy: Home price vs salary
http://www.early-retirement.org/foru...sed-32071.html
What would you do?

wow, yet another thread on your home buying experience....I would have thought the first 5 would have been enough....
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Old 01-06-2008, 10:07 AM   #4
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Like most people, I've made many more than three specific decisions, but three examples would be career choice, country of domicile and home purchase.

There are whole research centres devoted to the science of Decision-Making under Uncertainty. Every decision involves a risk of failure. Everyone has a different tolerance for risk. Even making no decision is a decision.

My approach is to do as much research as possible, visualize the likely result, get external validation if appropriate and just decide. Like everyone else I have made some decisions that didn't turn out well, but they were reasonable decisions with the information available at the time. That's life. The worst thing is to not think it through properly and spend the next decade second guessing yourself.

In your case, buying the house involves some financial risk, in order to own a home that you have fallen in love with, which offers a chance at improved quality of life. You will have to work hard to pay for this home, which will limit your opportunities to enjoy it. Some behaviour modification will be required. You mention the need to focus. The difficulty you are having in making this decision tells me that there is a risk that this simply will not happen.

Looking forward to hearing which way you decide very shortly.
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Old 01-06-2008, 10:18 AM   #5
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Quote:
Originally Posted by Mary_From_Georgia View Post
I think I'm at a such a point now. I have an opportunity to get a GREAT deal on a home that is a little bit out of my "psychological" tolerance. While I will be able to afford the home, I will have to let go of what today I consider things that are part of my livelihood--fine dining, being able to help family members readily financially, and above average miscellaneous spending.

Close self-examination suggests that I really need to enjoy the outdoors and do more community service more---all "free" and not "social" drains. I really believe making this purchase (aside from the potential, which I am not banking on) can really make me more focused afterwards. I've heard people say that having kids had a similar effect on them.

Net, I don't want to look back and say...."I wish I would have..."
Have you considered trying the free activities NOW (enjoying the outdoors and doing more community service) to see if you would really be happy cutting back on your fine dining and miscellaneous spending? If you will be happy with this change in lifestyle after taking on a huge obligation like this house, I think then you would be happy making the change beforehand and it might be a good test. Just a thought? Try it for a few months - - couldn't do any harm, and you will save up more for your down payment by doing it.

Buying a home will be a huge and wonderful change in your life, true! But remember what good realtors sometimes tell us... DON'T FALL IN LOVE WITH A HOME BEFORE YOU BUY IT. If you do, you will not be negotiating from a position of strength, and you can make other decisions that you will regret later as well.

Great deals appear and disappear on every homebuyer's horizon as time passes. I guarantee this isn't the only one, and the next one might be at a price that won't compromise your lifestyle as much as you indicate. The media say that the housing market will continue to be crummy for a while, so I expect that the present buyer's market will continue and increase.

I know this is not what you want to hear people say! But it is meant as a kindness and please feel free to ignore it if you want to!!
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Old 01-06-2008, 11:02 AM   #6
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You are looking at some mighty big houses. How big is your family? You haven't mentioned a spouse and it sounds like you don't have kids. If it is just you, why the big fancy houses? Do you have furniture to fill the thing?

I understand living in a pleasant neighborhood with an easy commute. Is that what you are getting with these houses? If it was just me or me and my spouse, I favor in the city neighborhoods with easy walking and shopping and entertainment. Not a drive everywhere neighborhood. I also favor much smaller houses. We had a big house once and it took hours to clean.
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Old 01-06-2008, 11:54 AM   #7
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can't say i ever made a crap shot of life. i'm not of entrepreneurial mind. i never even ran away from home yet, and i'm 50. i try to think out all the ramifications before making a move which has not prevented bad decisions. as meadbh says, when i look back to the information i had at the time i can't see myself having had made any other decision which leads me to slight suspicion without though any real evidence that i might have done well enough if not better in life had i taken a few crap shots. certainly it would have added to the excitement and that can be part of what makes us feel alive.

i find very interesting this point which i think is worthy of its own thread & so i'm going to post it in "other"
Quote:
Originally Posted by Mary_From_Georgia View Post
I really believe making this purchase (aside from the potential, which I am not banking on) can really make me more focused afterwards. I've heard people say that having kids had a similar effect on them.
because it introduces a concept i haven't noticed discussed yet: how we manipulate ourselves.
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Old 01-06-2008, 12:20 PM   #8
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1. Deciding to stay with a company close to going belly up in 1973 and moving the factory from Minneapolis to a little town on the prairie.
(Over 30 years, generated satisfying jobs, over $250k in bonuses, and life in a small town that was a great place to bring up kids.)

2. Deciding to live below our means, saving and investing the excess.
(like my cousin says - living on a small, but steady pension. He owns homes in Montana and Tucson, plus land in Minnesota, and travels around the world for something to do. I expect to get there eventually.)

3. Having our kids young.
(my folks never lived to see grandchildren.)
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Old 01-06-2008, 02:13 PM   #9
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I'll just give you one decision, that was pretty life changing: Some years ago Megacorp asked me to go to Asia, which was a promotion for me. The assignment was to be short, with no promise of a job on return, just the comment "we'll try to find something for you". Now we've been here 4 times as long as expected with two more promotions mid-way, bringing more responsibility, benefits, salary, bonuses, perks etc, than I had ever dreamed of. It also produced more headache, heartache, and a few illnesses than I ever thought I would have. It also is making FIRE possible within the next 18-24 months or so. What would I have done differently? I would have still taken the assignment, but I would have learned faster to delegate. I would have left the office at 530 more often. I would have exercised more and taken better care of my health. I would have been less greedy and cashed out my options sooner (read that as "diversify and not leave too many eggs in the megacorp basket).

So really Mary, it is up to you. You are taking a while to make this decision, but you have to decide what is more important to you...the fine dining and being able to distribute cash to others when you think they need it (read: be used by them), or simpler home cooking more often, and a very nice home to show for it. That is the most important decision to make, not whether or not to buy this particular house. Others will come along. But until you decide you want "a house" at the price range you are considering more than you want the other things you mentioned, you will find that there will always be an element of "regret" if you buy the house.

Hope this helps a little.

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Old 01-06-2008, 02:26 PM   #10
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Mary ,

Reading your posts I think you are probably having a tough time with this decision .I have owned a few houses on my own and the problems were never the mortgage or the taxes .It was who to call when things go wrong .How to get the popcorn kernels out of the dishwasher motor .When does the roof need replacing ? Why is the stove not working ? How to relace toilet parts ? A house comes with a ton of responsibility and costs that keep coming .Don't cut yourself so close that you are extremely house poor . Life is much more than a nice house .
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Old 01-06-2008, 02:39 PM   #11
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1. Decided to bag 7/8 of an expensive tech education and go to art school. Worked out fine.

2. Decided to leave a decent job and start my own firm. Worked out fine.

3. Bought a foreclosure home where the foundation was so bad you could see the sidewalk outside from the gap between the 2nd story floor and inside wall. Worked out fine; I fixed the foundation, the neighborhood became super-desireable and I walked away with an almost $300k profit after 10 years. I had been renting in the area and just happened to walk by the place; the purchase was not planned at all.

4. Met my DH on the Internet and decided to marry him the same day we met. Going on 8 years and everything on that front is going swimmingly.

5. Moved to Italy. Jury is still out and the biggest minus is the weak dollar (and many lifestyle adjustments: can't get any/everything tomorrow via FedEx!); the biggest pluses a more human/humane pace and no worries about health ins.

All these decisions were made with not much more than a gut instinct (but also with the knowledge that I had a little bit of dough to fall back on). Maybe some people's guts are 'smarter' than others'.. maybe it was just luck.



Mary, if you imagine yourself looking forward thinking "I wish I had bought a nice house of my own" instead of "I wish I had gone out to dinner more" or "I wish I had given more money to my relatives" or "I wish I had gone on more shopping expeditions".. buy the house, especially if you see yourself having long-term roots in the area.

But don't expect it necessarily to CHANGE you. DH wanted a dog, thinking "if we get the dog I'll get out and about walking the dog". Guess what? It doesn't happen. (We have a big yard and the dog runs around there, mostly). The change in your social and spending priorities should be in the making by their own rights.. not dependant on buying a house (or dog). Some of these changes in priorities come naturally with age; others won't. You have to "know yourself".

If your expenses are 1/5 your salary.. if the house is only 2-3x your gross income.. and you are yearning for it.. buy the house. It sounds like you want encouragement or validation in that direction. If you are not stuck on ONE house, waiting a few months and marshalling your financial and psychological resources to ensure they are solid can't hurt.. It appears the market has not hit bottom and you'll likely find something equally good for less. (Sorry if that is encouraging "dirty market timing"..!)
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Old 01-06-2008, 04:11 PM   #12
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Mary, I think it's hard for some of us to advise you about the house since many of us have not coveted large homes and were more focused on FIRE. I probably went overboard in the LBYM area and lived in a 1000 square foot condo all my adult life (until a year ago). I never felt I was denying myself per se because of the limited square footage and lack of amenities (I don't think anyone on their deathbed mourns the fact that they didn't have granite kitchen countertops---especially since granite is becoming passe and some type of concrete has become the new granite). But we stayed at our condo way longer than we should have once we saw that it wasn't being kept up and that it was becoming increasingly difficult to live around rude 20-something year olds.

Not knowing what your housing situation is like now (why you are thinking about moving), it's impossible to know whether upgrading to a new home would be right for you. This is a board for people who want to be FIREd; I don't know if that is the case with you. For many of us, it was worth it to live small (although not to have to live under horrible conditions, as was happening in my situation) to achieve the big dream. And material things just don't matter much to some of us. But they do seem important to you, so you'll need to figure out what is most important: house versus maintaining the lifestyle you enjoy versus psychological security.

I've never been into real estate as an investment, but possibly in your case it would be a good ting to pour as much money as you could into a home as a forced savings device instead of spending it on other things.

Here's hoping you'll enjoy whatever you decide (the house or continuing with your lifestyle); life is too short not to be happy!
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Old 01-06-2008, 04:42 PM   #13
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Old 01-06-2008, 06:22 PM   #14
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Mary,
My advice after reading through the other threads is wait.
Unless you have 20% to put down and have excess funds to deal with all the additonal stuff to feed a house and the utility companies and the local school district and all the other folks that have a hand out for your $$ when you have a house then wait.

If you have the cash and the cash flow for all the other stuff then maybe. But, take a very very careful look at the area you want to buy in over the past several months and see which way the housing prices are headed. If you wait you might be able to get more house for less money. Chances are the market will stay sluggish for seveal months so if you can wait out a buyer who MUST sell then you can get a much better deal.

A house is more than an investment...it is your home. Buy the HOME you want first and look at it as an investment second. Of course, be careful where you buy and what you buy so you don't have the strangest house on the block in a bad area.

Good luck.
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Old 01-07-2008, 12:27 PM   #15
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Disclaimer: I'm just some random dog 12 year old girl from Missoula guy on the Internet. You should not consider me your oracle.

That being said, I'd vote "no" on the house, at least until you figure out what it is you want. The mere fact that you are seeking so much external validation on this decision tells me you aren't confident enough that it is the right decision for you.

When I bought my house last year, I knew what I wanted before I found my house. I knew how many bedrooms, how many baths, which part of town, what price I could afford and what price I wanted to pay, etc. After I figured that out, it was easy enough to look around at 25-50 homes and find the one that best met what I wanted, and buy it. Even when my parents weren't sure about the purchase -- and usually I consider their advice with a great deal of gravity as they are very smart people who care about me a great deal -- I didn't have any qualms about it, because I knew it was the right choice for me at the time, regardless of how it turns out. (So far, it happens to be turning out fine, but even if something goes wrong, I still will have been happy with the choice I made at the time.)

Are you considering buying this house because of someone else? For example, are you trying to please your family or a boyfriend/SO? Are you trying to keep up with the Joneses? If so, I would suggest this is not a good reason to buy a house, and any resulting happiness will be a coincidence, not a direct result.

Good luck with your decision.

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Old 01-08-2008, 03:32 AM   #16
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SecondCor521: v. good response!
I read her need for validation differently, but your pov could be equally.. valid!

Quote:
Are you considering buying this house because of someone else? For example, are you trying to please your family or a boyfriend/SO? Are you trying to keep up with the Joneses?
Another intangible external factor could be the feeling that, at a certain adult age and with certain means, buying a house is "growing up" and an element of "coming into one's own" .. settling down. That's how I felt as a single adult at the time, but I wouldn't have taken a big economic risk to get that feeling; the numbers have to make sense.
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Old 01-08-2008, 05:38 AM   #17
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1) married my DW - has been of great support for over 35 years. We are compatible in most things that matter - hit an 11
rationale or why - I was in love and lust
2) bought a house at market peak in 1989 and took a beating - crapped out
rationale or why - job related move. we should have rented in retrospect. lost high 5 figures
From then on, I would make it a point to take my time and make sure I understood market conditions. For example, I would not be selling a house (would take too much of a beating) nor buying a house in todays market ... (... would wait as I think it has not bottomed yet).
3) maxed out employee stock plan and 401k from day 1 - hit a 7
rationale or why - my branch manager advised me to start on June 27th vs. 1st week of July so that I could a) get full 2 weeks vacation and participate in employee stock plan for that year. I figured it must be a good thing if he would give me this 'fatherly' advice. for the 401k we had just gotten so used to saving for retirement that when the opportunity arose, I jumped at it and put in the max allowable each year until I FIRED

And those guys should not have hijacked your thread ... this is a good question and the answers might give some insight into what and why you should or should not do something for the 'younger' FIRE forum participants.
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Old 01-08-2008, 04:59 PM   #18
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Hi Mary:

This is probably is dorky reply ... and not necessarily what you were looking for:

after reading your 5 threads (cause I myself like RE in general), my impression is- what are you lacking in life?
what is it that you think buying a house will fill? or fulfill?
Because even when you buy a house, no matter what house you buy, you will still be Mary_from_Georgia, only with alot more obligations and responsibilities.

Is it good for your financial situation? Only you really know, but it sounds like this house buying would be not just a purchase, but a life altering event. Having a house will not add any to your stature.

ok, my 2 yo wants to talk...but it sounds like waiting on yourself might not be a bad idea.
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