Priorities, degree vs condo

I read Rich Dad Poor Dad several years ago, but honestly I can't remember much of it...I do remember it being a good read though. But the author of the book and people like Suze Orman, these supposed financial wizards on tv, all seem to say the exactly the right things when the economy was booming but I've noticed they've made a lot of contradictions now that the economy has soured which is why I stopped listening to them.

 

I liked Suze Orman book, but it has no thing in common with Kiuosaki. Orman gives straightforward personal finance advice, very clear but basically the same as many other authors. Rich Dad is inspirational fiction combined with bad real estate investing advice.

 

However his point that students do not learn personal finance in high school or college is valid. My wife and I have discussed this on many occasions and we brought our kids up to avoid debt.

 

True. It should be taught in middle school (if not second grade). However, this point is hardly enough for a couple dozen books and a speaking tour.

 

Rich Dad, Poor Dad is on okay book that can be summed up in one sentence: Spend your money buying assets that generate income instead of sinking your wealth into things that lose value (i.e., automobiles, vacations, etc.).

Really, that's it.

 

The first prerequisite to buying assets that generate income is to make sure I own everything I use and also to try and stop my cash bleed (rent). If I want rental properties I do need to own my own home first. Actually, these cheap condos are perfect future rental properties.

Not to downplay the investment of a degree, but the above is one way to look at this.

 

I'm in the same boat, trying to decide whether to buy a house or move forward with degree plans. Glad to see I'm not alone.

I have to agree with some of the assessments of Rich Dad Poor Dad. Some interesting reading and AV8R hit the gist on the head, but I'm inclined to follow taylor's comments and not listen to the flapping heads in the media since they don't really seem to know anything.

 

As a former owner of 3 different homes in Southern California and a current owner of rental property in Nevada, boy was that a mistake, I've experienced the highs and lows of real estate. You are going to hear a lot of different opinions about whether to be a buyer or a renter, but imo if you look into real estate as something that will make you money that's probably not a good idea to buy. I've seen that most of my friends that bought modest houses with no plans of moving, happy with their decision to buy because they pay no mind to the house prices. However, my friends who have purchased houses with a plan to sell it in the near future for a profit, most of them are stressed and miserable, few are even foreclosing. Personally, after being a homeowner for many years I actually enjoy renting these days especially in this economy. It allows me the mobility like others have mentioned and in my personal experience I've found it easier to save money.

 

I agree with you for most non-business assets however for a home I find it is better to take out a fixed rate mortgage and invest the balance. I did this ten years ago and my income exceeds interest on the loan. The nice thing about a fixed rate mortgage is that it is not affected by inflation so as time goes by my payments take up an ever decreasing amount of my income.

 

Based on what you have posted on this forum, I think you already have a good sense of business and should continue along the lines of what you're doing, instead of pursuing a degree. The people who own real property outright are the ones who are going to fare well in this deep recession.

If you make enough money with your business sense, you can always make a donation to a major university, in exchange for an honorary doctorate degree. Take care, Dr. RickyJo

 

rickyjo, scratch what I said. I reread your first thread and noticed the condos you're looking at were 30-40 grand which it seems you could have a 100% equity in no time. My mistake was having too much confidence in the real estate market since I made a lot of money off it in the past but then again everybody did, it was just that easy. Now you have to have a lot more cash and be a lot more savvy.

 

Have you thought about posting this question to a discussion board on condos and see what they think?

 

Ted: But I like THIS forum

TAYLOR: Yeah, I'm hoping that I would only have to borrow 5-7 thousand and have it paid off in under a year. I have no desire to take on debt that cannot be dispatched with immediately. What's cool is the home buyer tax credit can wipe out about half the debt immediately.

CS1/advisor: Thanks!
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I'm so grateful to everybody especially the dissenters who think it's a mistake to buy right now for helping me think it through; however, I have decided to buy if I can find a livable one that I can pay (almost) cash for. We are going to look at another one today.

My wife needs a bigger home, and I don't want to pay MORE rent than I am now, so I feel that even if it's a bit bumpy I want to get this condo and get some more square footage and lower my cost of living. I will start CLEPing and maybe I can convince my wife to try CLEP too, she is a smart one. She would probably be much better at it than I am!

Now if I cannot get something under contract this month and miss the credit I'm sure I'll be coming back all out of sorts trying to make this choice all over again!

 

rickyjo, I'm excited for you. If you can do both at the same time that would be the most rewarding. Take advantage of your youth and don't take it for granted. I remember when I was your age with 1 and 1/2 years left to graduate I dropped out thinking I could finish later. With work, a business, a family, and everything else life throws at you I just graduated at the age of 39. To be honest with you, I didn't absolutely need a degree most of my life because I was self employed but I do admit I've always had a chip on my shoulder because of it which I know could've been avoided if I just had graduated. I think you'll be fine though.

 

So so so sorry. Now that I've confirmed that my account deletion was a mistake I have re-registered. That's why I have not been around. Please anybody who may have PMd me (Abner in particular!) please do it again.

 

No worries.

Abner

 

I can barely believe it! we qualified for a mortgage of under 5 percent APR, we are under contract on a condo over 1000 sp ft for 42,900, the min payment is under $90 the rate is fixed. We are less than 20,000 in debt and our tax refund is going to be nearly 5,000 (home buyer tax credit) and because we got a mortgage we also have some money left over in the bank.

Our base cost of living goes down and our living space is doubled and WE FINALLY WILL HAVE A DISHWASHER!

assuming everything goes smoothly we close on the 21st at the latest. I've already filed for a tax extension and it looks like we will get everything we were hoping for.

Also, it looks like my wife can get her 2 year degree from tesc with the credit she already has (i hope!). As soon as the condo thing is sorted out I'm going to look into that and maybe, just maybe, there will be enough money left over for a semester of school for me.

YAY!

 

Good job Ricky!!!!!!!!! For what it is worth (if anything), I am proud of you!!!!! Rember what we talked about. Pick out a CLEP or DANTES and send me the details!


Abner

 

Welcome to the world of home ownership Ricky!

 

Are you saying your monthly house payment is $90? That's awesome.