Homes and assets

[Zephii]

Ok, bear with me. The title is unhelpful, and I didn't even know where to put this.
I'm not asking for advice on my situation, I'm asking for your personal opinions for yourselves.

As some of you know, Obi and I are saving up together to buy a home. It's quite exciting, and to me at least feels risky enough. I've never done the shared account thing before. But that's beside the point.
The original plan for this money was (depending on the state of our relationship) to invest it before we return to Oz, (Which would mean putting it all in Obi's name, because the most rewarding returns come with the options that are only available to Canadian citizens.) or if we're not married/or at least engaged, then to put it into a term deposit and let it sit. (This option is preferable to me. Investing is a lot like gambling, even if your financial planner is your father in law. I'd prefer to make a small safe profit than to have the possibility of getting rich/losing everything. Obi's opinion differs lol)
Whilst I'm ready to save with him, I'm not sure I'm ready to take an extra step and buy right now.

But now Obi is looking at buying before we return home. I can see why, but I still think it's stupid. That aside, he wants to buy a shiny new unit and I'd prefer a house. It's more practical, imo. He really has his heart set on a unit. Now he's expecting to get a settlement early next year. It wont be enough, once he gets out of debt, to have a deposit (i think) but it would easily do it if he takes back his share of our savings.
My sister tells me to just let him go ahead and buy whatever the hell he wants.

I'm not so sure. For one, even though I'm expecting a little money from when my house back home sells, I don't know how (or if I even should at this point) to bring that money to Canada. I can imagine the tax o.O ... and even if I did, I would struggle to buy property alone, he wouldn't want to sell or pay two mortgages... I'm not bringing my children up in a tiny unit - it isn't fair on them. and I really feel that buying a home is a step we should take together, we can do so much more if we combine our efforts and it's just... it means a lot to me.

So I don't know! This is long I'm sorry, guess I needed to rant too!
But my questions are: What are your opinions on buying large assets? Do you think it's ok to do it separately while in a relationship? Have you and your SO spoken about these things? Tell me everything you think!

[Tanja]

I think it's something you absolutely need to decide together and DO together... especially if you're saving for it together.

As a woman I must say if I was in your shoes I would probably want to go for a house too rather than a unit which you'd only live in for a few years and then sell it...
Having a place where you walk into and get the feeling "this is home" is magical and it's definitely something to aim for!

I'm very lucky in that way since I've found my dream home - there's a lot to fix yet though but the thing is I plan to live here for the rest of my life and during that time I wanna get everything done little by little so that when I'm old and weak I can just sit back and look at this wonderful place where I've raised my kids and spent my life with the man I love...

And I want to leave it for my kids some day, I want it to be worth something too and whenever I feel hopeless, when I look around and think about all the work that's ahead of me, I just think "I have what I've always wanted and I have my whole life to make it even better..". That's a great feeling ♥
I'd never ever get that feeling from living in a tiny unit...

Surely Obi wouldn't just use his money to buy an apartment if you didn't agree with him...? It's so gay when you don't agree on things!

[Zephii]

Tanja, I knew you'd understand exactly where I'm comming from

I don't want something new and perfect, I want something to work on! I'm the handy man in my relationship though Does Andy like to help you fix up your nest?

I'm not sure if Obi would at this stage. He fears my wrath lol, but his family are putting a lot of pressure on him to buy or invest or SOMETHING right now and he's not good at telling people no. So, we'll see. Also, on that vein, I don't want to override his decision on it if it's something he truly wants to do... We both want to own investment property later in life, but I think a family home is a better priority for now seeming we're a long way from being advanced in our careers and earning a fortune.

[Silviar]

You asked for our personal opinions, so that's what I'm going to give.

So, I've worked in finance since I got out of college, and my personal strength lies in personal finance. I'm really good at understanding personal wealth and how to make your money bleed for you. I've paid off $24k in student loans, $3k in medical debt, paid for a wedding (oh, irony), about $7k in credit card debt and paid off a motorcycle loan all within 2.5 years. I have a lot of experience with managing debt/savings ratio, and I'm cautious about my spending, which is why I was able to pay off all of that crap on a very median income. And also why I won't take out loans unless they're for a house. I don't need to; I've learned to live within my means.

So, now having said that, and you see I'm financially conservative, this is my opinion, which is the same opinion I've heard espoused from several financial planners who I like (and also by Dave Ramsey, who's excellent for questions like this): buying a house is a great and wonderful thing, and it can be a blessing or a curse. I think it's important if you're in the right phase of life, which means knowing if you're able to live there for 5 years (otherwise all of the agent fees, etc will actually put you into negatives as far as assets, 5 years is the average for break-even), and you have the proper down payment.

If a couple plans on buying a house, it's important to do it as a team. This is only one of many compromises a couple has to make, and if you can't agree on a house, how the hell are you going to get everything else compromised in life? It's just one of many life bumps that happen, and have to be approached as a team.

I would also strongly discourage anyone from investing money. Short-term savings, things being saved for for >5 years, have no real return when it comes to investing, and the risk it involves isn't worth it. You're much better off getting a high yield money market account and letting it hold the money until you're ready to use it. The risk, plus what you'd get back after paying fees, etc, just isn't worth the investing for something that small in terms of time.

Money crossing overseas isn't really a big deal as long as you're not carrying it in cash. You'd do a wired bank account transfer, and it pops right into your account in Canada.

You and Obi are still young - you don't need to buy a house just yet, particularly if you don't know where you're going to end up. I mean, I don't want to sound like a pressuring force myself, but you're much better off taking the time to make the best decision for both of you and giving yourself time to save for it rather than rushing now and regretting it later.

[Zephii]

You've said to me just now exactly what I've said to Obi 100 times. Except you've said it far better. I've had no training and I'm not smart, but I am good at planning and managing money. That's why I wasn't asking for advice, I was asking for your opinions for within your own lives However, I'm so letting Obi read your post to back up my argument lol.

I want to wait to buy our home in Canada until (in approximately 4 years time) we're permanently (or as permanently as we'll ever be) settled here. We'll have a good chunk of savings by then, he'll be out of debt and I'll have gotten rid of my other house. I'll be damn near thirty by then, and that's plenty old enough for me.

I really appreciate your take on investing too. His dad is all "invest invest!" (I don't know enough about it to be wholly comfortable with it.) and against buying property at all (they didn't buy their home until they were in their late forties which is alien to me). And his uncle is all like "It's a buyer's market, do it now!". So it's nice to have yet another professional opinion to balance all that out. "Wait wait" is what I'd like to be hearing more often on this subject.

Ok, so, tell me about your life? (If it's not too personal)

[Silviar]

So, what Obi's dad and uncle are both talking about in their own way is longterm 'retirement' planning. There are two general thoughts when it comes to retirement planning (aka income sources for when you retire), and that's 1) real estate and 2) investing. Both, in order to make money off of them, require time. Everyone wants a get rich quick scheme, but the fact is a lot more people lose than win at the get rich quick investing (like single stocks/day traders and commodities trading), but statistics show that, generally speaking, once you factor in win/loss ratio with transaction fees people break even.

In the end, what you decide is best for you is the way you should invest your money - they're both investments, after all! However, there are so many personal factors involved in it that I couldn't personal advise you, of course. I suspect the real reason they're pressuring you both is they want you to start investing early because it'll make your retirement so much easier. And they're right on that level, but it sounds like they're going the wrong way about it.

Another thing to consider is that most people don't own their first house until they get close to their 30's. It's ok to start prioritizing with your money (a certain amount for savings for house, a certain percent for retirement investing, which is usually 10% of your income), but just remember that some things are much easier to move and take with you than others. It really comes down to your personal situation and preferences. As someone who doesn't know where she'll be in the next 5 years, I wouldn't dream of having a house, not until my boyfriend and I have stable jobs in an area we like and want to live for hopefully 10+ years.

Of course it's a buyer's market - and guess what? It won't be the last. If you buy a house before you're ready, you run the risk of having to pay out money you don't have for upkeep (roof goes, heater busts, AC goes wonky... all costly repairs you need to ensure you have an emergency fund for), and it can put you seriously at risk if you're not prepared for all of the responsibilities along with the joy of home ownership.

What specifically would you like to know about my life? Point me in the right direction, and I'm happy to elaborate.

[Zephii]

They clearly aren't talking about retirement on this issue. I know it sounds daft, but it's true. We've discussed that as well, and it was actually helpful, but in near-term planning... not so much lol. Perhaps they think we're far better off financially than we actually are or something.
As I've mentioned before, I already own a home (jointly with my sister). My Mum was very careful to install good sense in us about having fall-back money, how having a house ties you down, how to do basic repairs so you're not wasting money with tradesmen, everything she could think of on the subject she taught us. I'm not unprepared for this. Owning early in life is something I've always wanted to do and really there is no bigger waste of money than renting - especially when we need more space for the kidlets.
I know my age bracket tells people I'm too young for all of this, but I've wasted enough of my life and I've been through enough. When you're not expecting to live past 60 you don't wait until you're 30 to start living the life you want to have.

What are your opinions on buying large assets? (For yourself, not for me) - I think you pretty much answered this though.
Do you think it's ok to do it separately while in a relationship?
Have you and your SO spoken about these things?
Is home ownership a big priority for you?

Stuff like that!

[JoMarie]

My personal opinion won't be as elaborate as I'm no expert in that area. Also I'm exhausted so don't judge me! LoL

I personally believe that if you're in a relationship for the long term, you should definitely be able to make decisions as a team. That being said, sometimes guys don't want the same things as us women want! It's funny because Kevin and I have been going through this exact same thing but there is so many greater things going on that it's been only a shadow? Anyways..

My dad is a real smart investor when it comes to homes and apartments. He used to work for the Air Force back home building their houses on base, and then maintaining them. (painting, fixing etc.) He is amazing at looking at a home and knowing if it's worth the money they are asking, which is a quality I envy. He is willing to go through the foreclosures for us, back home and get us something that we can live in, but invest in making better while we do this. It's a win win in my eyes because, you can get a better home for cheaper and if you do sell the home down the line it SHOULD sell for more as you've fixed it up. Kevin thinks this is asinine. I don't quite understand his logic but he would rather live in a unit, or a BRAND NEW HOME that would decrease in value, and damn a home is a home. If you like it you can invest the love and care into it and it'll be whatever you make it!

[Silviar]

They clearly aren't talking about retirement on this issue. I know it sounds daft, but it's true. We've discussed that as well, and it was actually helpful, but in near-term planning... not so much lol. Perhaps they think we're far better off financially than we actually are or something.
As I've mentioned before, I already own a home (jointly with my sister). My Mum was very careful to install good sense in us about having fall-back money, how having a house ties you down, how to do basic repairs so you're not wasting money with tradesmen, everything she could think of on the subject she taught us. I'm not unprepared for this. Owning early in life is something I've always wanted to do and really there is no bigger waste of money than renting - especially when we need more space for the kidlets.
I know my age bracket tells people I'm too young for all of this, but I've wasted enough of my life and I've been through enough. When you're not expecting to live past 60 you don't wait until you're 30 to start living the life you want to have.

What are your opinions on buying large assets? (For yourself, not for me) - I think you pretty much answered this though.
Do you think it's ok to do it separately while in a relationship?
Have you and your SO spoken about these things?
Is home ownership a big priority for you?

Stuff like that!

I wouldn't say you're too young, really, I just think there are other ways it sounds like you want to prioritize your money/time. Especially if you're not sure when you'll be settling down (I know at one point there'd been mention of going to Australia for a year... don't know if that's still on the table, but definitely you wouldn't want a house and then up and leave it with such a short planned time frame).

What are your opinions on buying large assets?
I think buying a large asset that appreciates (unlike cars, which depreciate), are an excellent choice for a long-term investment and I'll definitely be buying a house of my own. However, I won't be buying one unless I plan to live in it at least 5 years, and preferably 10 because a house's value increases very slowly, so there's no financial gain in buying a house if I'm going to turn around and sell it. Add to that I don't think renting is a waste of money when I think of all the cash I'm saving in home ownership fees like insurance and repairs. I rent cheaply so I can save the most money now for my future. If I was in a position to buy a house, then it would be a waste of money, but I don't have my emergency fund, let alone a down payment and housing emergency fund, set up. And a housing emergency fund is generally recommended at about $5-$10k. I don't want to buy a house and end up with my pants down. There's no guarantee you'll make money off of a house, so I'd rather wait and take my time when I have the cash and an experienced realtor who sells in that neighborhood and knows it before I buy.

Do you think it's ok to do it separately while in a relationship?

So, I personally wouldn't buy a place with someone who I'm going out with. We'd have to married or have spent so much time together that it's basically a common law marriage for me to consider purchasing property with someone. The only reason I say that is because you get into sticky legal recourse with houses if you're not married versus married, and whose names are on the deed. If you're not married and only one person's name is on the deed, then hey - whoever's not on it is pretty much screwed should the worst go down. And I don't even mean break-ups. Gods forbid, if that person dies and you're not married, usually you're not entitled to any assets if it's not willed to you. Or what if there's an accident and your SO becomes a vegetable or completely changes due to a cognitive issue? These things can and do happen, and as a legal recourse, you have very little if you're 'just the girl/boyfriend'. It sucks, but law doesn't catch up to these things... I don't like to think of them, but I've seen them happen. I don't want that to be me, and I have to consider longterm when I look at these sort of things.

Have you and your SO spoken about these things?

Yes. We're planning on getting a house once we move in together, get married, and have the job situation sorted out. I'm going to accrue money until we're ready for a house, then we're going to go to a one income household, so we're making plans to ensure the best life set-up possible for us. We're not in any hurry because we have a lot of steps we have to take before we can get there. I don't want to buy property there until I'm legal, for crying out loud. :/ Darn Aussie Red Tape...