I thought this was an AMAZING article, and I’m going to read this book – totally excited about it. From the Author who brought you “The Millionaire Next Door” and “The Millionaire Mind” brings you the new book, “Stop Acting Rich.” which examines the psychology of how most people perceive “wealth.” As Rob Minton, the author of the article put it:
“… that most people look rich because they live in big homes or drive expensive cars, but when examined closely, they have accumulated very low levels of wealth. In other words, they wear big hats but have no cattle….”
Looking around, I’ve found it to be very true. Most people are concerned about appearances and when it comes down to brass tacks, haven’t done anything to build wealth, but have worked excruciatingly hard on building the appearance of wealth. Now don’t get me wrong… it’s fine to have nice things, but the point of the article is that most who have accumulated great wealth — prioritize investment OVER possessions. I was BLOWN away by this excerpt:
“If you examine homes by value from the lowest to the highest, you would find that as the value of the homes increases, so does the proportion of people who are living well above their means.”
Now, I don’t know if that’s 100% true in EVERY market but I sat down after reading this and asked my self… as a Real Estate Professional – I HELP people make these large decisions for themselves – what can I do to help, and what direction is my advice pointing my home buyers?
Good question, right?
I thought so… Back to the article, is “Buying the Worst House on the Best Street sound advice?” In Real Estate there is TONS of opportunity in UGLY (and I mean Ugly) houses in desirable neighborhoods. The question one must examine is this…. am I making this buying decision to impress my friends or increase my lifetime wealth. You CAN do both, but both perspectives have totally different motivations. If you intend to increase your wealth, you must look at dollars and cents.
I think it’s smart to buy a fixer in an area you desire — so long as you’re not extending yourself beyond reasonable limits. Now I’m NOT a financial planner, but I am an extremely conservative spender / investor… You have MORE ownership expenses in a home than simply your mortgage. You need to be able to afford to maintain and improve your home if you want to make money with it. Simply owning a home and sitting on it will not make you the money you need in this current market.