Advice on finances...

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Kit27

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Hi guys

Im a 27 yr old guy with a decent job (take home 35k a month ). I havent got much financial obligations /too much expenses . Im currently renting a 7k apartment.

The thought of buying a house scares me a bit ( bond) and conflicts with my goals i think . I dont see myself having a family of my own one day or needing to settle down with someone... im currently spending my money on travelling and i have multiple savings account. I think buying a house will force me to settle and consider a family which is something i dont want. I enjoy the city life, i stay in the city. The idea of having a house and staying alone scares me.

Would buying flats and apartment and renting them off be an option ?

Please help
 
Yeah, flats are a good option, just don't forget that you typically have maintenance costs AND levies to worry about.

To be honest buying your own house/flat is a great idea even if it's just for a few years, not forever. If you're staying in the same city more than eight or nine years, give it some thought. You'll probably come out ahead financially given rises in rent and inflation of property values over time.
 
Kit27 said:
Hi guys



The thought of buying a house scares me a bit ( bond) and conflicts with my goals i think . I dont see myself having a family of my own one day or needing to settle down with someone... im currently spending my money on travelling and i have multiple savings account.
Click to expand...

Using Savings accounts to store your money is really just losing you money by devaluing it.

Buying a property or multiple would be a much better use of your time and finances.

I trust you have a Pension in place? If not you need to start there.
 
PM saturnz, he would be able to give you the bestest advice ever.
 
I'm going to take your post as a request for general financial mindfulness.

  • You're 27 years old and you're asking the important questions. Pat yourself on the back for this.
  • You have no obligations or debt. Another pat on the back.
  • If you don't want a family or children, I ask you to examine the reasons why. There is no wrong choice unless you'll end up regretting.
  • Nothing stops you from accumulating a good financial foundation and choosing the above later on. You'll just be older.
  • Dating gets a bit difficult once you crossover into the 30s. People have advanced their lives and usually have children by then.
  • Your pool of quality suitors becomes a lot less. People tend to accrue baggage (in all forms) as the years go by.
  • If you want a partner, find someone who is your equal or better - in most/all aspects.
  • Your money, health and career should be your focal point always. Have a mission. Have goals.
  • You're young and if you save diligently and live a simple life, you can accumulate a decent amount which buys you choice and freedom.
  • Do not save to the point that your quality of life is being hampered. You must still experience and live, but not overly so.
  • Put some time into learning how to manage your money and how to invest it.
  • Put some time into looking after your body and caring for yourself. Pick up heavy stuff and put it down. Repeat.
  • Put some time into expanding your mind. Study and learn voraciously.

Bottom line: Invest in yourself and everything else will come naturally.

Good luck
 
Why not rather pay that 7K towards your own bond and since you dont have financial commitments.
You could pay it off quicker.
 
What a lucky guy, sounds like you earn too much money and you are actually complaining that you don't know what to spend it on.

In all seriousness.
Do you have a pension fund in place? This is very important.

Property is not the only way to invest your money and IMHO not the wisest way if you don't have a long term outlook. By the sounds of it you don't have a long term outlook.
Property is also not a fast money maker, again long term outlook.

With that being said, what I will do.
1. If not already, get yourself a RA fund, since you can afford it, contribute at least 15 to 20% per month in to it for now.
2. Look at house prices in your area, something nice but not too expensive, maybe work on around R10K per month. Try to save up for a deposit on a house if you don't have enough savings in the bank already, then really consider buying yourself a house and go live in it. In the long term it will make a big difference if you are able to put down a deposit on a house now.
You'll pay more than what you pay now, there will be rates, taxes etc. but it will be your own place and in the long term the value of that property should grow.
3. Start putting money in to the stock market, teach yourself about it, but I suggest you get a good stock broker. Note that this is also a long term game. Having all your money in a savings account isn't very smart, that money can do so much better for you.
4. Save some money on the side in a normal savings account for your travels. Set goals and only go travel if you saved enough, but don't take money from the other baskets to finance your travels.

This way you build long term welth and stability, but you will still have enough left to save towards your traveling hobby and if there's a imergency then you'll still have your travel savings to fall back on.
5K PM towards your RA, 5K PM towards the stock market, make it 12K PM towards your house bond, that leaves 13K per month for medical aid, living expenses and saving up for traveling, simplified example but you get the idea.
 
Kit27 said:
Hi guys

Im a 27 yr old guy with a decent job (take home 35k a month ). I havent got much financial obligations /too much expenses . Im currently renting a 7k apartment.

The thought of buying a house scares me a bit ( bond) and conflicts with my goals i think . I dont see myself having a family of my own one day or needing to settle down with someone... im currently spending my money on travelling and i have multiple savings account. I think buying a house will force me to settle and consider a family which is something i dont want. I enjoy the city life, i stay in the city. The idea of having a house and staying alone scares me.

Would buying flats and apartment and renting them off be an option ?

Please help
Click to expand...

:confused:
 
Buy the house.

Property is scarce and will become scarcer year by year.

You don't know what life can hit you with so whilst you are able, get into property.
 
Kit27 said:
Would buying flats and apartment and renting them off be an option ?
Please help
Click to expand...

Thor said:
Buy the house.

Property is scarce and will become scarcer year by year.

You don't know what life can hit you with so whilst you are able, get into property.
Click to expand...


the thing is, you don't need your own money to get into property, especially if its buy to let
 
saturnz said:
the thing is, you don't need your own money to get into property, especially if its buy to let
Click to expand...
True, but it helps knowing you can cover the repairs etc.

With his salary to point in life ratio I feel he sould seriously consider it.
 
Thor said:
True, but it helps knowing you can cover the repairs etc.

With his salary to point in life ratio I feel he sould seriously consider it.
Click to expand...

yes but he will still be sitting with the problem of cash that he has to do something with
 
saturnz said:
yes but he will still be sitting with the problem of cash that he has to do something with
Click to expand...
Emergency fund.
Buy a house for self.
Max out RA and TFSA

Invest the rest
Optional buy a flat to rent out.
 
buying a house for oneself is such a waste of money, the money is effectively tied up in the house and you are unable to use it,

thats sort of the situation I'm sitting in...

moreover the interest on a bond is not tax deductible so its not really the most financially efficient decision
 
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buy the market. committ ur money every month and forget about it.
have a look after 10 yrs, and off you go.
 
Kit27 said:
Hi guys

Im a 27 yr old guy with a decent job (take home 35k a month ). I havent got much financial obligations /too much expenses . Im currently renting a 7k apartment.

The thought of buying a house scares me a bit ( bond) and conflicts with my goals i think . I dont see myself having a family of my own one day or needing to settle down with someone... im currently spending my money on travelling and i have multiple savings account. I think buying a house will force me to settle and consider a family which is something i dont want. I enjoy the city life, i stay in the city. The idea of having a house and staying alone scares me.

Would buying flats and apartment and renting them off be an option ?

Please help
Click to expand...

why would buying a house force you to settle? you can own a property and not settle down?
Think of it this way you paying 7K a month and paying some other guys bond. that 7K Rent is just getting you a roof over your head for now and you are not owning it at the end. If you pack up and move when renting you make nothing - if you outgrow the place you buy with a bond grows in value and yo usell at least you get the difference of the settlement value.

If you don't want to buy a house buy an apartment it still becomes yours at the end of it.
if you got money that you not sure what to do with you can in theory pay of a home loan faster.
 
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