Comments on: Why it doesn’t necessarily pay off to buy your own house in the US, Australia or Europe http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/ Life is what you make it! Thu, 29 Jul 2010 10:59:29 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Chris http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/comment-page-1/#comment-47099 Chris Tue, 29 Dec 2009 11:46:07 +0000 http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/#comment-47099 Great information and insight, <strong>sunny</strong>! Thanks for sharing, I can only agree to the safe and transparent financial framework of Singapore - the only regret I have; that I didn't find out about it earlier in my life. It's really something to think about during a quiet day somewhere, if one is serious about changing ones consumerist lifestyle, becoming financially independent and retiring early. Great information and insight, sunny! Thanks for sharing, I can only agree to the safe and transparent financial framework of Singapore – the only regret I have; that I didn’t find out about it earlier in my life. It’s really something to think about during a quiet day somewhere, if one is serious about changing ones consumerist lifestyle, becoming financially independent and retiring early.

]]> By: sunny http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/comment-page-1/#comment-47096 sunny Tue, 29 Dec 2009 11:26:44 +0000 http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/#comment-47096 Chris has a strong argument against buying/keeping a real estate in the West (West refers to developed nations including Japan, Singapore, Hong Kong and Australia, not just the US and EU) when a Westerner has already planned to retire and live a nomadic lifestyle in the East (East refers to developing countries, including Mexico and Latin America). This is especially so because the Western mortgage had been overly leveraged. Many home owners are still not out of the woods. I expect more to default their loans in the coming few years. One particularly dangerous mortgage product that many Americans had taken up is the progressive mortgage package which comes with an artificially low interest rate in the initial years and a substantially higher rate later. Many families are struggling to pay even the artificially lower rate now. When they have to face the music years later, their monthly payment maybe 2 times or more than what they pay today. For example, they may have to pay US$2,000/m later whereas they are struggling to pay $1,000/m now. Many such families will default their payment and be forced to sell their house, and banks may become bankrupt again since the massive foreclosure of these houses will push the prices down below what they are assumed to be worth in the bank's balance sheets. And property price will go down, igniting another financial crisis like what we saw in 2008. Perhaps the next crisis will be even worse. So, those who thought that property prices will increase perpetually will get a second shock when this next crisis comes along. The bottom line is, what is the intrinsic value of the property? Are they worth so much in, say, gold? Most properties in the West are priced too high in gold terms. Moreover, as a nomad, you really don't want to pay taxes, to be bothered about finding tenants and collecting rent, and to renovate your property, etc. The best way to manage your assets is to make them as easy to manage as possible, and to pay as little taxes as possible. One way is to move them into a tax-frenly financial centre such as HK or Singapore. They have excellent financial services, regulatory framework and tax treatments for nomads' investments. HK even offers a Right of Adobe (equivalent to Permanent Residency) to those who invest large sums (around US$1m) of money there! These 2 cities are also among the most transparent economies and reliable financial centres in the world. Foreigners may also open bank accounts, buy insurance policies and open trading accounts there. For example, a nomad in Asia could purchase a health insurance in Singapore and go back to Singapore for surgery or hospitalisation when required to enjoy world-acclaimed medical facilities, or choose to receive treatments in other approved hospitals elsewhere in Asia. For nomads who wish to enjoy a regular stable income from his investment, he may purchase a life annuity that guarantees a minimum amount of monthly income for as long as the person survives from a Singapore insurance company. By so doing, he can receive a fixed income (e.g. S$2,000/m) plus bonuses denominated in a strong currency (Singapore Dollar) for life, so he doesn't need to bother about mismanaging his investments or fluctuations in the financial markets. By the way the Singapore Dollar has appreciated against the US$ considerably. HK$ is pegged to US$. Both HK$ and S$ are considered strong. Others who are investment savvy may invest in stocks or mutual funds in HK/Singapore on their own. Since the financial companies in these 2 cities have English-speaking staff, it's easy to communicate with them. Chris has a strong argument against buying/keeping a real estate in the West (West refers to developed nations including Japan, Singapore, Hong Kong and Australia, not just the US and EU) when a Westerner has already planned to retire and live a nomadic lifestyle in the East (East refers to developing countries, including Mexico and Latin America). This is especially so because the Western mortgage had been overly leveraged. Many home owners are still not out of the woods. I expect more to default their loans in the coming few years. One particularly dangerous mortgage product that many Americans had taken up is the progressive mortgage package which comes with an artificially low interest rate in the initial years and a substantially higher rate later. Many families are struggling to pay even the artificially lower rate now. When they have to face the music years later, their monthly payment maybe 2 times or more than what they pay today. For example, they may have to pay US$2,000/m later whereas they are struggling to pay $1,000/m now. Many such families will default their payment and be forced to sell their house, and banks may become bankrupt again since the massive foreclosure of these houses will push the prices down below what they are assumed to be worth in the bank’s balance sheets. And property price will go down, igniting another financial crisis like what we saw in 2008. Perhaps the next crisis will be even worse. So, those who thought that property prices will increase perpetually will get a second shock when this next crisis comes along. The bottom line is, what is the intrinsic value of the property? Are they worth so much in, say, gold? Most properties in the West are priced too high in gold terms. Moreover, as a nomad, you really don’t want to pay taxes, to be bothered about finding tenants and collecting rent, and to renovate your property, etc. The best way to manage your assets is to make them as easy to manage as possible, and to pay as little taxes as possible. One way is to move them into a tax-frenly financial centre such as HK or Singapore. They have excellent financial services, regulatory framework and tax treatments for nomads’ investments. HK even offers a Right of Adobe (equivalent to Permanent Residency) to those who invest large sums (around US$1m) of money there! These 2 cities are also among the most transparent economies and reliable financial centres in the world. Foreigners may also open bank accounts, buy insurance policies and open trading accounts there. For example, a nomad in Asia could purchase a health insurance in Singapore and go back to Singapore for surgery or hospitalisation when required to enjoy world-acclaimed medical facilities, or choose to receive treatments in other approved hospitals elsewhere in Asia. For nomads who wish to enjoy a regular stable income from his investment, he may purchase a life annuity that guarantees a minimum amount of monthly income for as long as the person survives from a Singapore insurance company. By so doing, he can receive a fixed income (e.g. S$2,000/m) plus bonuses denominated in a strong currency (Singapore Dollar) for life, so he doesn’t need to bother about mismanaging his investments or fluctuations in the financial markets. By the way the Singapore Dollar has appreciated against the US$ considerably. HK$ is pegged to US$. Both HK$ and S$ are considered strong. Others who are investment savvy may invest in stocks or mutual funds in HK/Singapore on their own. Since the financial companies in these 2 cities have English-speaking staff, it’s easy to communicate with them.

]]> By: Chris http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/comment-page-1/#comment-44638 Chris Mon, 23 Mar 2009 14:17:55 +0000 http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/#comment-44638 <strong>Peter</strong>, nice try here, but a little bit off the actual facts. ;-) Of course, I'm not nearly as carefree as the above and other posts on this site might suggest. I'm all for reasonable planning and execution of financial independence. Also I wouldn't recommend to gamble on a possible inheritance by parents or other relatives. It was merely meant to think outside the box, as most people are more afraid of the future than necessary. :D Peter, nice try here, but a little bit off the actual facts.

Of course, I’m not nearly as carefree as the above and other posts on this site might suggest. I’m all for reasonable planning and execution of financial independence. Also I wouldn’t recommend to gamble on a possible inheritance by parents or other relatives. It was merely meant to think outside the box, as most people are more afraid of the future than necessary.

]]> By: Peter http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/comment-page-1/#comment-44635 Peter Sun, 22 Mar 2009 21:55:32 +0000 http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/#comment-44635 I think nomad4ever let his carefree mask slip when he inserted as one reason against home-ownership "You will anyway inherit your parents house one day" which perhaps sums up his future plans. It is widely known and discussed that his generation is enjoying the greatest wealth transfer in history as most parents of his generation accumulated wealth which they will leave to their children. Essentially, his current 'carefree' lifestyle is build on the promised security achieved through his parents' hard work. I think nomad4ever let his carefree mask slip when he inserted as one reason against home-ownership “You will anyway inherit your parents house one day” which perhaps sums up his future plans. It is widely known and discussed that his generation is enjoying the greatest wealth transfer in history as most parents of his generation accumulated wealth which they will leave to their children. Essentially, his current ‘carefree’ lifestyle is build on the promised security achieved through his parents’ hard work.

]]> By: 9 surefire Strategies NOT to Retire Early | nomad4ever http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/comment-page-1/#comment-42371 9 surefire Strategies NOT to Retire Early | nomad4ever Fri, 01 Feb 2008 15:52:07 +0000 http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/#comment-42371 [...] in it, but one can never know how big your family will be one day. You want to live forever in your own place. And with an own house you are forever secured. Of course you will have to invest again over time [...] [...] in it, but one can never know how big your family will be one day. You want to live forever in your own place. And with an own house you are forever secured. Of course you will have to invest again over time [...]

]]> By: Tariq Bamadhaj http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/comment-page-1/#comment-32224 Tariq Bamadhaj Sun, 02 Sep 2007 17:35:55 +0000 http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/#comment-32224 I guess buying your own place does have it perks. With rental, you can't always decorate it the way you want. But careful planning would definitely have to go into making that purchasing decision. Don't just follow your heart when buying it, but follow your head and do the numbers as well. I guess buying your own place does have it perks. With rental, you can’t always decorate it the way you want. But careful planning would definitely have to go into making that purchasing decision. Don’t just follow your heart when buying it, but follow your head and do the numbers as well.

]]> By: real estate investment « Real Estate Investment http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/comment-page-1/#comment-31031 real estate investment « Real Estate Investment Sun, 19 Aug 2007 01:38:07 +0000 http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/#comment-31031 [...] Chris presents Why it doesn’t necessarily pay off to buy your own house in the US, Australia or Europe posted at nomad4ever. [...] [...] Chris presents Why it doesn’t necessarily pay off to buy your own house in the US, Australia or Europe posted at nomad4ever. [...]

]]> By: Essential Tips For Self-Sustainable or Permanent Travel | nomad4ever http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/comment-page-1/#comment-25884 Essential Tips For Self-Sustainable or Permanent Travel | nomad4ever Mon, 11 Jun 2007 09:07:05 +0000 http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/#comment-25884 [...] If you own a home/house, evaluate if it’s good or bad debt! If the return from rent is lesser than the mortgage payments and other costs, it could be better to sell it off completely and put the money into fixed-income assets/dividend stocks, thus converting bad debt into a passive income stream. I *would not* bet on an increase in real estate value over time, that’s gambling. But you have to evaluate your situation and decide on that yourself. It doesn’t necessarily pay off to own a house in a developed country. [...] [...] If you own a home/house, evaluate if it’s good or bad debt! If the return from rent is lesser than the mortgage payments and other costs, it could be better to sell it off completely and put the money into fixed-income assets/dividend stocks, thus converting bad debt into a passive income stream. I *would not* bet on an increase in real estate value over time, that’s gambling. But you have to evaluate your situation and decide on that yourself. It doesn’t necessarily pay off to own a house in a developed country. [...]

]]> By: Attitude http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/comment-page-1/#comment-24256 Attitude Tue, 05 Jun 2007 14:02:47 +0000 http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/#comment-24256 [...] Why work your behind off to buy a Porsche, 2 houses and tailor-made suits when you can drive an old used motor-scooter in beautiful surroundings, rent a small but cozy flat and sit in flip-flops and shorts at the Perfect Beach, thus avoiding Monday Morning Blues forever? The choice is yours! But make your choice early! [...] [...] Why work your behind off to buy a Porsche, 2 houses and tailor-made suits when you can drive an old used motor-scooter in beautiful surroundings, rent a small but cozy flat and sit in flip-flops and shorts at the Perfect Beach, thus avoiding Monday Morning Blues forever? The choice is yours! But make your choice early! [...]

]]> By: Is a Nomadic Lifestyle for you? | nomad4ever http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/comment-page-1/#comment-19968 Is a Nomadic Lifestyle for you? | nomad4ever Tue, 08 May 2007 09:03:20 +0000 http://www.nomad4ever.com/2006/12/20/why-it-doesnt-necessarily-pay-off-to-buy-your-own-house-in-the-us-australia-or-europe/#comment-19968 [...] Why work your back off to buy a Porsche, 2 houses and tailor-made suits; when you can drive an old used Motor-Scooter in a beautiful surrounding, rent a small but cozy flat and sit in flip-flops and shorts at the Perfect Beach, thus avoiding Monday Morning Blues forever? If you tend more to the latter, you can have it. If you want to own all the riches - you can have it as well. It’s all up to you! But make your choice early! [...] [...] Why work your back off to buy a Porsche, 2 houses and tailor-made suits; when you can drive an old used Motor-Scooter in a beautiful surrounding, rent a small but cozy flat and sit in flip-flops and shorts at the Perfect Beach, thus avoiding Monday Morning Blues forever? If you tend more to the latter, you can have it. If you want to own all the riches – you can have it as well. It’s all up to you! But make your choice early! [...]

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