The fifth cure for a lean purse…
By Mark Reinert
“Guard thy treasure from loss” instructed Arkad. The wealthy sage in George Clason’s “The Richest Man in Babylon” had previously been sharing his lessons on building and keeping wealth for a group of not so successful people who were constantly struggling financially.
In the fifth of “The 7 cures for a lean purse”, Arkad implores his attentive students to “Make of Thy Dwelling a Profitable Investment.” He is, of course, referring to owning your own home, adding “To own his own domicile and to have it a place he is proud to care for, putteth confidence in his heart, and greater effort behind all his endeavors.”
There are, of course, situations that justify renting your home, as opposed to owning it. If, for instance, you are planning to relocate within 3 to 5 years, a very good case could be made for waiting for more permanence to buy a home. Also, consideration must be given to the amount and cost of normal maintenance and repairs, property taxes and insurance, as well as upkeep and general economic conditions.
Another danger is the purchase of a property that is more expensive than the household income will support. This idea was introduced in Arkad’s Second Cure, where he reminded us of the critical importance of “Controlling thy Expenditures.” If the cost of home ownership causes us to exceed the 90% of our income that we have to live on, then we will not be putting aside the remaining 10% for our long-term future, putting at risk our financial security.
Once homeownership becomes feasible, the benefits can be rewarding. ”Then will thy heart be glad because thou wilt own in thy own right a valuable property and thy only cost will be the Kings taxes.” And we certainly can’t forget the Kings taxes!
Important decisions like home ownership, should always be made with the benefit of a sound financial plan. When was the last time you had yours updated? Call today to schedule your conversation.
For more information on diversification and other helpful planning tools, visit http://www.reinertwealthmanagement.com/resource-center/investment/a-look-at-diversification
Reinert Wealth Management: Creating financial recipes since 1989!
Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC As an independent advisor with LPL Financial, Mark serves clients through financial planning and investment advising. Mark became a financial advisor in 1989 and obtained his CERTIFIED FINANCIAL PLANNERTM designation in 1995. He obtained his RETIREMENT INCOME CERTIFIED PROFESSIONAL®
Mark is a former adjunct faculty member of Baker University where he taught graduate and undergraduate finance and economics courses for nearly ten years and worked in the banking industry for five years. He has been featured in several publications regarding financial advice and is a regular speaker with various civic and academic organizations.
Mark received his and MBA from Pittsburg State University in 1988 and undergraduate degree from St. Mary of the Plains College in 1984.
Mark Reinert may only discuss and/or transact securities business with residents of the following states: AL, AR, AZ, CA, CO, FL, IL, KS, MO, OK, TX, and WY.