Buy a House, or Get Screwed?

Hi Scott,

A few years ago, my husband and I lost a lot of money in a housing downturn. We’ve since saved over $400,000 and are ready to buy again, but the market is crazy. Should we invest in shares, buy now and flip in 12 months while prices are booming, or hold off, knowing property in our regional town can crash hard and fast? We’re keen to make a smarter move this time. What would you do?

Terri

Terri,

Here’s a little Barefoot cheat code for you. Whenever someone asks me a money question, the first thing I do is throw it right back at them and say:

“What do you think you should do?”

Because most of the time they already know. They really just want someone to stand there clapping while they set fire to their own eyebrows. 

And right now you’re flicking the lighter so close I can smell your monobrow starting to sizzle. That four hundred grand is about to light up your whole face. You’re tossing up buying shares, flipping a house, or sitting around waiting for a crash.

I don’t love any of those ideas.

So let’s flip this around. You’re not really looking for a quick win. You’re chasing financial security after getting your fingers burnt last time.

So why not keep it simple? 

Buy a home you can afford in a place you’d be happy to stay for the next 10 years. Boost your super contributions to 15% and enjoy the tax deduction while you’re at it. Then start chipping away at building yourself a nice Mojo account with three months’ worth of living expenses.

Boring? Sure. But boring is beautiful when it comes to money. It’s what lets you sleep through the night instead of lying there at 2am panic-refreshing house prices like a gambler feeding a pokie machine.

Good luck.

Scott