Busy is an interesting word, useful as an excuse to get out of, well, nearly anything in life one wants to get out of doing. Having said that, we are very busy lately because we purchased a new house.
We are leaving our cherished neighbourhood in pursuit of financial gain. We can leverage the equity we have built up and put it to good use elsewhere. Most people don’t do this.
Most people, even in my generation, buy a house, raise a family, work the same job for 40 years, die in that house or will it to their heirs. This will be our second move in 3.5 years, so obviously I don’t subscribe to that way of life.
My goal is to use the cash equity to open my own business. A passive income would be best so I can keep working my day job at the same time. I’m spending some quality time researching my options.
Buying a house in a safe neighbourhood in the city is not a straightforward task. There are many people scrambling for each reasonably priced home in reasonably safe neighbourhoods. Last weekend we found ourselves in a multiple bidder situation (17 of them to be exact) where we were disqualified when other buyers submitted offers that were 50K above asking.
To say we are fortunate to have great realtors working with us, to have found and successfully purchased a house in a reasonably safe neighbourhood that is detached (instead of a semi-detached that would share one common wall), has PARKING for 2 cars (!), and enough room for our family to live are all good reasons to feel proud of our accomplishment. To add that we purchased for significantly under the list price is amazing! The kitchen is a wreck that will need to be redone, but otherwise the inside of the house is in great shape. I picture us being very happy there. The kids have mixed reactions. The baby of the family, girl midget, is thrilled, as is the oldest girl midget (not even a midget but I like that description). The middle 3 are not thrilled but have accepted our decision. We have taken this situation as an opportunity to teach them about financial planning, equity, cube jobs, business, and the housing market. I think even the 12-year-old is plenty old enough to find out how adults make a living and some of our financial options as we get older.
We are turning a corner with all of our kids. All of them are growing up and none need to be shielded from our circumstances and decisions. I did learn the hard way not to bring girl midget on house hunting expeditions, due to her never being silent. Turns out I have a hard time making large life decisions when she is constantly yapping.
When I was growing up no one discussed their income and financial situation with their children, at least not specifics. I had no idea what my parents made per year nor their exact situation, except that they were budget conscious and I needed to apply for student loans to get through school. We had a nice house, lots of land and a middle class lifestyle throughout most of my childhood. This was a nice situation but it didn’t teach me anything about how to use capital when I became an adult. I learned some things about money, for sure. But I never would have thought to buy a second home to rent out (which I did in 2008) nor to sell the family home to free up equity that I can turn around and invest elsewhere. I never would have figured that out had I not gotten divorced and received a lump sum for my share of our house.
It’s time to start teaching financial planning in high school. That’s when most people get their first part-time jobs and start to have cash flow. Sex ed is being taught to younger classes nowadays and it’s time for school to add to its practical curriculum.