Quote:
Originally Posted by Bring_Back_Shantz
My point though, as it's been this whole time, is that it's important to weigh the quality of life you're gaining with the right house, vs the impact that the associated debt (or lack there of) will have.
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I can agree with this statement, to a degree.
Quote:
Originally Posted by Bring_Back_Shantz
In my case, taking on debt has freed up a ton of time (reduced commute) freed up some cash (less gas/transportation, which offsets some of the mortgage), and brings me a lot closer to several friends and activities that I enjoy (inceased qualtiy of life). I could have avoided debt by staying in the burbs, but the trade off for me was worth so much more than the financial restrictions I now have.
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I realize that I'm making quite a presumption here, but by taking on the debt, you must now service the debt, and the service of the debt likely requires you to either (i) become (or stay) employed at a job that pays at a particular wage or higher; (ii) reduce the amount of discretionary income that you receive from your investments; and/or (iii) increase the level of risk that your investments undertake in order to maintain the same net income, after giving effect to the amount required to service the debt in order to "break even."
There are, quite possibly, knock-on side effects as well, such as increased property taxes (because the house that you have now is more expensive than the house you previously had, and thus the property tax is higher on the new house as well), increased maintenance costs (either because a more expensive house might have more expensive fixtures that cost more money to maintain or because the house is in a more expensive area and thus contractors charge more because, rightly or wrongly, they believe that the clientele can afford the increased charges), and/or increased lifestyle expenses (because living in a more expensive area may subject one to a greater "keep-up-with-the-Jones" feeling, thus causing one to increase their conspicious consumption expenses).
I guess my main point is that I'm a big proponent of living below one's means, keeping one's options open, and not being obligated or beholden to anyone. I tend to believe that having debt doesn't allow one to maintain those tenets or ideals as easily as not having debt does (or would). That's all.