Why "Just Repay the Home Loan" Isn't the Right Financial Advice for Everyone
Hey there! If you're anything like my typical client, you've probably heard that age-old piece of wisdom countless times before: "Just repay the home loan, and you’ll be right."
Ah, the sweet melody of previous generations, singing the same financial tune over and over. And while this may have been a banger back in the day, it's not exactly topping the charts in today's financial landscape.
Let's break it down. In earlier decades, entering the property market was a rite of passage in your 20s, with deposits required a multiple times less compared to the average wage.
Fast forward to today, and what do we see? Many first-time home buyers are making that leap in their mid-30s. Yep, that's right – the mid-30s. It's not just about delayed gratification; it's about the evolving societal and economic factors.
With skyrocketing property prices and a myriad of other commitments, it's no surprise that this milestone has shifted a bit down the line
Now, let's think about the implications. If you're buying your first home in your mid-30s and stick to the minimum repayments, that hefty debt is going to be your unwanted companion well into your 60s.
Does spending the best part of your life repaying a debt sound appealing? I didn't think so.
Life is a rich tapestry of experiences. Perhaps you're dreaming of starting a family, launching a business, or simply taking a year off to travel the world. Maybe you're eyeing that beautiful renovation project or even considering upgrading your current home to better fit your evolving needs.
So, why settle for a one-size-fits-all financial strategy? It's like wearing someone else's shoes; they might look good, but if they don't fit, they're just going to give you blisters.
Even those boomers that made below average financial decisions in past did pretty well if they got into a property early in life and rode that wave.
In most generations these people would have nothing but due to pure dumb luck they get to lecture their kids and the next generation about how poor their money management skill are.
Here's the thing: smart financial planning isn't about adhering to outdated rules that don't align with your life. It's about understanding and leveraging the three pillars:
Protect What You Have: It's not just about making money but safeguarding it. Think of it as building a fortress around your finances, ensuring they're shielded from unexpected life events.
Be Smart and Apply Strategy: Life's a game of chess, not checkers. It requires strategy, foresight, and sometimes, a bit of risk. Your financial journey should reflect this.
Grow with Goals: The ultimate aim? To see your wealth grow. To ensure your sweat and hard work translate into tangible, fulfilling results.
So, next time someone tells you to "just repay the home loan," take a moment. Reflect on what you truly want from life. Remember, it's not just about protection, but strategy and growth.
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The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.