A.k.a. I avoid getting pwned for once! I almost went and bought a house. But that would have been a big mistake.
For the one or two of you out there who read this blog semi-regularly, it has been hibernating. That’s all I can really say. I was quietly saving money with the intention of starting into real estate investment. But I wasn’t sure about it, and wasn’t juiced up to write about anything else.
Then one day, for a variety of reasons, I decided I had found a great investment: a cute little ranch in awesome shape, in an award-winning school district not too far away. I put an offer on that ranch with a 10% down payment. And it was actually accepted.
With 10 days on the clock I started thinking about it. This investment would wipe out everything I have. I would have no emergency fund left. I would have to rebuild that – still, I figured, my sweet rental income would boost my savings rate.
But I also still have $6000 of student loan debt that I had quit paying in favor of going into investments. I know – my whole life purpose has been to pay off the loans. But I have a strange habit of saving the last of things (even bad things) rather than moving on. And this investment would ensure that I hang onto that nagging balance for a long time.
The kicker was that I would have no other money left to pursue other investments if I wanted. Cash placed in a Vanguard account earns you interest, and can also be withdrawn any time to use as an emergency fund or to seed another investment or self-employment. I can’t believe I had not thought of that before. Real estate returns can be much more exciting but your investment money is really illiquid. Unless you want to take out a line of credit, which on a rental is total insanity.
The thing that really settled things is that I started asking around about real estate with 4 days left on the clock. And I heard really bad things, all from people who had been in real estate before. At first I made excuses to myself about why this or that person had a bad time and how I would do better. But then I realized I can’t do better than all these different friends. I can’t believe I didn’t think to ask people before.
So I backed out of the house and went and got a haircut. First pro haircut in over a year! Maybe this is a better speed for re-entry into the dollar-spending world.