The fifth cure for a lean purse…
By Mark Reinert
“Guard thy treasure from loss” instructed Arkad. The wealthy sage in George Clason’s “The Richest Man in Babylon” had previously been sharing his lessons on building and keeping wealth for a group of not so successful people who were constantly struggling financially.
In the fifth of “The 7 cures for a lean purse”, Arkad implores his attentive students to “Make of Thy Dwelling a Profitable Investment.” He is, of course, referring to owning your own home, adding “To own his own domicile and to have it a place he is proud to care for, putteth confidence in his heart, and greater effort behind all his endeavors.”
There are, of course, situations that justify renting your home, as opposed to owning it. If, for instance, you are planning to relocate within 3 to 5 years, a very good case could be made for waiting for more permanence to buy a home. Also, consideration must be given to the amount and cost of normal maintenance and repairs, property taxes and insurance, as well as upkeep and general economic conditions.
Another danger is the purchase of a property that is more expensive than the household income will support. This idea was introduced in Arkad’s Second Cure, where he reminded us of the critical importance of “Controlling thy Expenditures.” If the cost of home ownership causes us to exceed the 90% of our income that we have to live on, then we will not be putting aside the remaining 10% for our long-term future, putting at risk our financial security.
Once homeownership becomes feasible, the benefits can be rewarding. ”Then will thy heart be glad because thou wilt own in thy own right a valuable property and thy only cost will be the Kings taxes.” And we certainly can’t forget the Kings taxes!
Important decisions like home ownership, should always be made with the benefit of a sound financial plan. When was the last time you had yours updated? Call today to schedule your conversation.