Want to Build Wealth? Don't Move So Much
Would you like to build wealth? Don’t move so much. The average American moves about 11 times through the course of their life – and Californians move more than that. In fact, people commonly buy a home, live there for 3, 4, or 5 years, sell it and move to (hopefully) an upgraded home. Well, when markets cycle up – it’s financially feasible to do that. But when people move that often they can also be hit when market cycles turn.
Remember the Positives
The smart thing to do if you’re thinking about moving – is to stay put. If you’d like to build wealth then owning that savings account – that home – where you’re building up equity, paying off that loan, receiving the tax advantages, you’re growing slowly and steadily – regardless of cycles. In the long run, you’re building value that is your forever. Now when you do sell there’s going to be costs associated with it. It’s an expensive thing to do. This is because of commissions and fees involved in selling and then again on repurchase. You’re going to spend as much as 8-10% of the value of your house. That’s a substantial chunk of money.
If you find yourself considering the idea of moving, you might just want to consider the idea of staying and doing something else with the money you might’ve spent on moving. You’re in a house for a while, you start thinking – we’re barraged by images of all the beautiful homes that the rich and famous live in, or even our friends on Facebook. With all the beautiful amenities, beautiful neighborhoods, stunning homes, it’s impossible not to be reminded of the kind of luxury that’s available to all of us at a price. But if you find yourself tempted by that it’s a good idea to step back and ground yourself. Tell yourself that those things are not necessarily going to serve you best financially in the long run.
Look at the Bigger Picture
The smartest thing you could do would be to at least rethink it and probably not to move. If you can cut out a couple of moves in your lifetime, then you’re going to be substantially (financially) ahead at the point in time that you’re looking to retire. The idea of taking perhaps a portion of that money and reinvesting it into the home, or into the quality of your life and building the memories that make the home where you’re at more valuable. The house itself is not necessarily the most satisfying part of home – it’s what you create within that’s the most satisfying.
So if you find yourself dissatisfied, discontent, then step back and explore the reasons why. Look at what it is that this home isn’t offering you and ask yourself – can it be fixed? Or am I looking at the wrong thing? To be honest, I’ve found that many people simply get bored, wanting a project in their life – this is an easy and tempting course of events. The action of looking for, shopping for and buying a new home. But that isn’t necessarily the best solution. So instead of just looking to fill a void you feel, explore why you’re discontent where you are. Look at your options – at other possible solutions that might be simpler and certainly less expensive. For example, upgrading a home before moving is not necessarily a bad idea. A few well-chosen upgrades could make all the difference between not loving the home you’re in and a home you might love living in.