Renting Cool? No Way!

rent-or-buySo it’s been no surprise that my wife and I have decided to rent, we’ve been renting the last year since we moved out of our condo that has continued to drop in price since we sold.  I’ve been keeping an eye on the old location and it’s hurting.  It was a smart decision and based off checking out the market, listening to people we trust and checking out a lot of people who are in tune with the housing market like Garth Turner. Check out his latest blog post about renting and how people that tell you “you need to be a man and own”, or “renting your throwing your money away”. http://www.greaterfool.ca/2011/07/03/renters/

Maybe renting isn’t for everyone however with the way the economy is headed, interest rates that will rise, you’ll see more and more people starting to rent.  Garth has a great example in there that may change our mind, or not.  Check it out, get all the info and come up with your own opinion but don’t be blind to it. 

I like some of what Gath says in his blog.

“If the goal is to become financially independent and build net worth, renting can beat the pants off owning.” – Just proves it’s not only World Wide Dreambuilders that teaches this success principal.

“…Most importantly, a renter would have lived in an identical (maybe better) house while building net worth and taking no risk on a seriously wobbly housing market. Zero debt. Total liquidity. Unfettered mobility. Net worth would be greater, not less. Options enhanced.”

Garth also refers to a few links that may give you some other insight.  I agree 100% with this link – http://www.moneyville.ca/article/1015893–why-i-sold-my-house-and-rent-instead

And then for the older people – http://www.theglobeandmail.com/news/politics/budget/personal-finance/why-renting-can-be-the-right-choice-for-aging-boomers/article2077874/

My wife and I are very happy renting for the time being, it’s allowed us to be 100% debt free, has given us a heck of a lot more flexibility in so many ways, has allowed us to donate more of our income to charities, and because of being debt free has allowed us to put money back into savings at a MUCH faster rate then what we had before.  Lastly like Garth said we are not tied to a “wobbly hosing market” which means when we decide to move to Kelowna, we can do so without the headache of selling something that may or may not sell.

I’m not saying that everyone has to rent, but if your in debt up to your ears and want to start moving towards financial independence, you may want to think again.  Don’t take my word for it, there are many others stating the same. Thoughts? Comments? It’s open for on topic discussion.

Success Rate of Other Business’s

Success-Failure Today we had dinner with an amazing couple that Lindsay sorta works with in her current job.  They are actually a pretty decent couple, and I say actually because they are in the financial advisor type of position in a place where Lindsay works that are not actually broke and stand on principal and really do want to help people.  Unlike the other scum that Lindsay works with where they lie, cheat, break the law, only care about the highest commission rates, and sell what’s best for them not what’s best for the client.  Now if you think this is the only place like that, think again.  It happens more often then you think.

So while we were having dinner with them we were talking on how people are successful in the finance  world and how hard it actually is.  He said very few actually make decent money where they don’t have to go against principals or morals.  They are by no means wealthy beyond means however they are pretty successful and it took them 4-5 years of nose to the grindstone and having that short term pain for long term gain mentality.  They basically had the whatever it takes mentality. Hmm sounds familiar.  I can respect people like that, people who despite everything stand on principal no matter what.

Recently another blog called Amthrax wrote a blog entry on Realism, SuccessQuoteFriendship and 0.0035% and while it was a pretty good article on a few notes, I was thinking about it today in how the success rate somewhat applies to this couples business and really how success rates really apply to any entrepreneurial undertaking.  The finance world is very tough and very cut throat, people are actually out to discredit you, throw you under the bus just to get ahead.  Being a successful financial advisor on your own is very tough but people do make it.  I don’t think they have quite the same success/failure rate that we do however I’d rather take what we do any day over what they have to go through.  We build business with integrity, morals and stand on some pretty awesome principals, the same cannot be said for the financial world.  One of our cardinal rules is “Don’t mess with anyone’s money” and we take that VERY serious.  Finance world… not so much.

I’ve picked on the financial advisor world a bit however I could pick on any entrepreneurial business as a lot of business’s fail and some succeed.  Everyone has their own percentages and everyone has their own little quirks.  There are negative and positive about every business out there whether it’s the Amway Global business or some Financial Advisor Business to the Pink Lovey Dovey Rabbit Company that only promotes the love of rabbits (not sure where that came from), but everything has it’s own success and failure rate.  What I think is the true measure of success, is when people despite the odds, despite the negative, despite all the naysayers, rise to the top and lay claim to the hard work and effort that was put into whatever endeavour they were trying to overcome.  That’s what I think success is.

 

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Please check out these other all-star bloggers in the 2010 Summer Blogging Challenge. Cliff – Peer Pressure Works, Chad – The Grind, Kelly – ‘Round the Bend, Kim – In Desperate Need of Entertainment, Kyle – Teacher, Tinkerer, Farmer, Geek, Liam – In the Now, Brad – Kick Me Out Soon, Tammy – Tam I am, Erron – From The Inside Looking In, James Feelings of White, Vlad – Analog Coast, Janine - Because

Great Blog

Deflation I was recently told to check out this blog by Garth Turner who really has his finger on the pulse of the Canadian economy and real estate.  A few other things as well however I try to follow more economy and real estate.  Check out his blog here (http://www.greaterfool.ca)

I was checking out his latest article titled Deflated where he talks mainly about how the economy is shifting from a leveraging world to a deleveraging world.  Honestly this is something that should have happened much earlier in my opinion but people just couldn’t stop spending and still had that instant gratification mentality.  Well that’s about to change I think as people who are wanting to pay back debt are going to have a much harder time in a deflating world.  Check out the blog for more details.

A few key points I wanted to bring out in “What should you do in a deflating world?”:

  • Think hard before buying anything. Houses, cars and iPhones will be cheaper in six months. This is not the advice Ottawa or the Bank of Canada want me to give, but there it is.
  • Pay down debt. In a deleveraging world it just gets harder to lose.
  • Be liquid. Stocks, bonds, funds, cash — liquid. Houses, Porsches, cottages, locked-in GICs, condos — illiquid.
  • Deflation plus liquidity equals party. Deflation plus debt equals divorce.

Since November of ‘09 I’ve followed quite a bit of this advice which was given to me by my coach and mentor in life and I have to say it’s paid it’s self over MANY times.  I could not be happier that I’ve sold my condo (which I’ve seen prices have dropped $20K since I sold) and paid down my debts especially in how the market is and how it’s going to continue to get worse.  I highly suggest you look at your financial portfolio and what your debt situation is like and start making smarter decisions.  A lot of you are already in great positions but sometimes we can use a fine tune or tweak.  Just don’t use the financial advisors at Lindsay’s work! LOL

Debt