But they shouldn’t!
There is always a way, but maybe not if you are an SQA.
But first things first.
Cashflow is king from age 17 to 97.
You can’t eat without cashflow.
You can’t put a roof over your head without cashflow.
You certainly can’t pay off a substantial mortgage without good cashflow.
Secure the cashflow first
In other words, your career.
Are you doing all you can to do the best you can in your career?
Are you prepared to move house or town or even country to do so ?
Are you prepared to got back to university, night school, or whatever it takes to do the best you can?
Have your looked into getting your own business instead of a house ?
A Common Income Killer
I often see this - the wife wants to live near her mother even if it restricts her husbands career opportunities.
I see this too - the husband wants to live close to his favourite sport or hobby, and in doing so often limits his career.
Often these are the very people who complain how hard it is to get a first home.
Status Quo Accepter
A close relative of mine told me a big mortgage was fine, that is what all young people do.
You guessed it, he is 30, has 2 children and another on the way, and bought 4 bedroom 2 bathroom home with a big mortgage - a classic SQA.
Even worse, he has undersold himself in his chosen career, so is likely to struggle financially and maybe get mortgage free at 65 when he could have done so at 45.
Become a No Way SQA
To get that 1st home, you might need to say to yourself loud and clear and often;
“No-way- I’m-not- going- to-be- an-SQA”
I am going to pursue the very best career opportunities I can find.
Even if it means moving towns, or even countries, or away from the wife’s mother.
I am not going to insist on 4 bedroom and 2 bathrooms.
I am not going to accept council building restrictions if they stop me from getting ahead.
I am not going to make the banks rich at my expense.
I am going to seek a better way even it it is unconventional.
But we did it that way ?
Plenty of older people (SQA’s too?) will say “What's your problem, we scrimped and saved to get into our first house, and we eventually got there financially."
Yes, it is generally agreed some self-help and personal determination that leads to success is highly desirable.
But houses now cost 8 to 10 times the average wage, not 4 times as it was in the past.
The key is to DO NOT BORROW $1 until you have really worked on your cashflow, your career, and looked at all the options open to you.
Be smarter. Don't accept the status quo just because that's what everyone else does.
There are many solutions - here’s one
Watch Michael Clarke a “small homes” TV series to get your brain juices flowing.
Eliminate rent – Live in mum and dad’s garage.
Or find a job which has free accommodation – night manager at a motel, or share milker.
Or a job overseas in the Ozzie outback, or Middle East that offers free accommodation.
Then save-save-save, and buy a section
Put a minor dwelling on it.
Or stage one of your dream home – maybe the garage.
Or get a converted shipping container - they are cheap and comfortable – and some are pretty smart.
I will never understand why they did not use hundreds of them as temporary accommodation in Christchurch ?
The local council will no doubt try to stop you building anything that is not a dwelling proper- to prevent slums – I agree - but don’t let that stop you doing something temporary to save heaps of mortgage interest.
Don’t fight with councils – circumvent or outwit them instead
Put wheels on it.
Call it a granny flat.
If they hassle you, tell them you are not an SQA - or would they like to pay your mortgage interest ?
Remember your prize - $100,000, $200,000 or more in mortgage interest you don’t have to pay !!
That’s a helluva desirable prize !
Supplied by Alan Clarke, financial & retirement adviser, & author. He also writes regular articles for the media and on line.
His second book “The Great NZ Work, Money & Retirement Puzzle” is now available.
You can buy it on line at www.acfs.co.nz
Alan is an independent authorised financial adviser (AFA) FSP26532
His disclosure statement is available on request and free of charge