Millennials May Be Tempted To Rent, But According To Millionaire, David Bach- Dont…
Millionaire David Bach has a message for Millennials, don’t wait to buy. It is nearly impossible to build retirement and personal wealth without home ownership. For example, if one rents a 2 bedroom apartment for the approximate average rate of $1,800 — after 3 years a total of $64,800 will have been spent. Assuming rents aren’t risen until year 4, which is unlikely, but to be generous, let’s say at year 4 it rises to $2,000 a month, after 3 years, the Millennial has just spent another $72,000. But you spend the same or more on a house payment right? Maybe. But you also have a tax deduction, equity buildup and appreciation.
When you rent, you make other people wealthy so here are three great tips for trying to buy a home:
1) Automate your savings for your down payment. Don’t ask yourself every month if you want to save or how much can you put in, as something will always pull at you. Have it go to savings straight from your check.
2) Build your credit history and keep it clean. Have several credit cards, use them, and pay them off every month. Stay in control and don’t get into debt.
3) Practice living on a budget. Give up lunches out and Starbucks, even if you can afford it right now. Practice living the way you would have to if you owned your dream starter or move up home. Take that money and add it to savings or for upgrades to your next home.