First House
MONEYMONK WEEKLY MESSAGE 15/2019
First House
The first house
that you buy is not considered an asset (more about it later) when you are
planning your personal finances.
After making a
budget and writing down daily expenditures and reviewing these every month you
will see some savings accumulating.
If these savings
are enough to pay as margin money for your first house you need to consider
buying your first house taking a mortgage/ housing loan.
If these savings
are not adequate to pay the margin money you need to invest these savings for a
while till they grow and become adequate. Savings at this stage can be
put in a recurring deposits or liquid funds . Many people make the mistake of
investing at this stage into mutual funds or equity based on hearsay from
friends, vested interest advisers or media. The above are risky investments as
its not the right time for you because you are not ready and equipped with the
knowledge required. This is the right time to invest in your own learning about
financial planning and equity investments but wait for investing in equity till
the first house is purchased.
Depending on your
personal life position and budget available the first house may be a stepping
stone to the eventual house you may later buy. The tendency to over leverage by
taking large mortgages must be avoided at all costs. This first house can be
sold at the time of buying one suitable for your life long needs later. You
need to consider various factors while buying your first house and they will
defer with every individual. Taking wise counsel at this stage will help.
Note:
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