I was hiking in the middle of nowhere a few weeks ago when I ran into an older couple in their early 60’s.
We struck up a long conversation and I learned that they lived in Palm Desert, CA, and were visiting their kids in Alamo, CA.
The interesting part was that they lived in nearby Danville, CA for over 30 years before selling their almost free and clear home for $1.5 million.
They paid cash for their Palm Desert home and are now retired, traveling and loving life!
I have blogged several times about many other clients in our database who are following a similar path.
“Gwen and Tony,” for example, bought in Concord, CA in 1985 for $150,000, then moved up in Concord for $300,000, then bought a “fixer” in Lafayette, CA for $600,000 that is now worth almost $2 million.
“Rod and Karen” bought in Martinez, CA in 1989 for under $200,000, then moved up to San Ramon, CA, then moved up again to Walnut Creek, CA and now live in Alamo in a home that is worth $2 million.
All three of the couples above have a lot in common, and it is not luck!
1. None were wealthy, as none had particularly high incomes.
2. All got into the market early, in their twenties (even when others told them not to buy “b/c rates were too high,” for example).
3. All three couples avoided the temptation of taking “cash out” of their appreciating homes.
4. All three lived on budgets to stay within their means.
5. None worried about timing the market when they bought, as they bought in both valleys and peaks.
Many young people are not buying real estate today b/c they prefer the ease and mobility of renting, or b/c they think now is not the best time.
But, we like to remind every young person that real estate is a great inflation hedge, an excellent appreciating asset, an excellent forced savings plan, and a great source of retirement funds.
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