News & Articles Buying a Home – The Best Investment for Young Adults
Buying a Home – The Best Investment for Young Adults
8 Jul 2016
You’re young and fresh out of school about to make your way in the world of adulthood. Filled with enthusiasm and energy, you tell yourself you’re going make a name for yourself and get rich along the way… and then all of reality hits you.
Transportation, food, rental (if you’ve chosen to move out of Mom and Dad’s pen), cellphone bills, insurance and all other unavoidable living expenses. Your first paycheck comes in and it’s cleared out to pay off these commitments. If you’re lucky, there a little left just enough for a weekend’s shopping, but is that how you want to spend the balance of your savings?
Investment is something that should start as early as possible, and as a young adult, your greatest financial asset is time. At this point in your life, your primary investment objective for your long-term savings should be growth. As an investor in your 20s, you have at least 30 years and above to start planning those retirement funds!
Why buy a Home?
Historical data has proven that real estate is one the only 2 asset classes that have grown faster than the rate of inflation over time. Here are some reasons why financial experts say young adults should be investing in the housing market:
1. A smarter way to spend your money.
a. Rent payments go straight into the pockets of the landlord, and at the end of the day, you’ll have nothing to show for it, as the property doesn’t belong to you.
b. Mortgage payments are an investment in the future. As the remaining balance on a mortgage is reduced, home equity increases, padding your own retirement account – and not your landlord's. Better to spend your money on your own home than on unnecessary, short-term expenses that won't provide value later.
2. Resale Value
a. The larger your investment capital is, so are your risks and return of investments. However, risk in real estate is given a sense of reassurance due to the ever appreciating value of property that Malaysia has seen thus far. Simply buying a home in the right district can mean earning a profit of even double the purchase price in 5-10 years (or less, if the area is highly profitable).
3. Low Interest Rates
a. Borrowing to buy a place to live is seen by banks as a much safer investment than credit cards, and interest rates are still at rock bottom. It is hard to qualify mortgage debt as a bad financial decision these days.
4. Supplement your Retirement Income
a. As millennials contemplate buying homes, they should think about the future. They'll benefit from having a home as a storehouse for retirement funds, and their homes will likely be paid off by retirement, allowing them to tap into home equity to fund retirement benefits.
5. Emotional Value
a. Although it is not a primary benefit for millennial homebuyers, there is also a sense of pride that homeownership invokes. You’ll never forget that sense of achievement… and the look of awe on your peers’ face.
(中文版请看这里:http://goo.gl/3Cnzug)
Transportation, food, rental (if you’ve chosen to move out of Mom and Dad’s pen), cellphone bills, insurance and all other unavoidable living expenses. Your first paycheck comes in and it’s cleared out to pay off these commitments. If you’re lucky, there a little left just enough for a weekend’s shopping, but is that how you want to spend the balance of your savings?
Investment is something that should start as early as possible, and as a young adult, your greatest financial asset is time. At this point in your life, your primary investment objective for your long-term savings should be growth. As an investor in your 20s, you have at least 30 years and above to start planning those retirement funds!
Why buy a Home?
Historical data has proven that real estate is one the only 2 asset classes that have grown faster than the rate of inflation over time. Here are some reasons why financial experts say young adults should be investing in the housing market:
1. A smarter way to spend your money.
a. Rent payments go straight into the pockets of the landlord, and at the end of the day, you’ll have nothing to show for it, as the property doesn’t belong to you.
b. Mortgage payments are an investment in the future. As the remaining balance on a mortgage is reduced, home equity increases, padding your own retirement account – and not your landlord's. Better to spend your money on your own home than on unnecessary, short-term expenses that won't provide value later.
2. Resale Value
a. The larger your investment capital is, so are your risks and return of investments. However, risk in real estate is given a sense of reassurance due to the ever appreciating value of property that Malaysia has seen thus far. Simply buying a home in the right district can mean earning a profit of even double the purchase price in 5-10 years (or less, if the area is highly profitable).
3. Low Interest Rates
a. Borrowing to buy a place to live is seen by banks as a much safer investment than credit cards, and interest rates are still at rock bottom. It is hard to qualify mortgage debt as a bad financial decision these days.
4. Supplement your Retirement Income
a. As millennials contemplate buying homes, they should think about the future. They'll benefit from having a home as a storehouse for retirement funds, and their homes will likely be paid off by retirement, allowing them to tap into home equity to fund retirement benefits.
5. Emotional Value
a. Although it is not a primary benefit for millennial homebuyers, there is also a sense of pride that homeownership invokes. You’ll never forget that sense of achievement… and the look of awe on your peers’ face.
(中文版请看这里:http://goo.gl/3Cnzug)
Source: DurianProperty.com