Want to build wealth? Don’t Move So Much.

It has become the American way of life… we want to upgrade everything in our lives. It has become a frantic cycle of wanting more, doing more and having more. We may think we are moving up or getting ahead, but often the drive for more is costing us elsewhere in our lives. Perhaps it’s time to slow down and re-evaluate our position before making life choices, like buying a new home and moving. Calm reflection will help you stick with your plan for your dream life.

During my childhood, my parents owned only two homes before I moved off to college. I was born in West Covina, and we lived there until I was 13. The second house was in San Diego, where they relocated the ForSaleSignsmfamily when they became teachers in Southern California.  They owned and lived in that home for another five or six years after I moved off to college. And that was actually very typical at the time.  As recent as a generation ago, we would buy a home and live in it for an extended period of time.  It has now become common for people to sell within 3-5 years… unless of course you’re underwater and stuck,  But that doesn’t keep us from craving something new and different.  The reality is that it takes four or five years to recover the cost of buying and selling a home, so we’re really not getting ahead – we’re simply speculating on housing’s boom/bust pricing cycle.

Americans have always been pretty good consumers.  Our desire for stuff is strong.  It should come as no surprise that this consumer thinking has crept into our housing choices. Like upgrading your cell phone every two years because there’s something faster, cooler, brighter or simply more appropriate for you.  We just want it.  But it can be especially destructive when it comes to housing because of the magnitude of the decisions involved.

It’s easy to overlook and grow accustomed to what you have and it’s seductive to see what you don’t have and want it. As well, the media fuels that desire pretty intensely. We live in a consumer-run society and there’s a lot of money to be made by your moving so the images of all the cool stuff that you don’t have are constantly fed to you. The moment you express an interest in anything – from the cool outdoor kitchen to the big house itself – the Internet identifies it and tempts you with more of what you have demonstrated you are interested in. That is brilliant marketing but not necessarily the best thing for you and your family.  Sometimes that itch is just crazy, like wanting the big screen TV or new car.  Why wouldn’t you want something bigger, better, nicer? It is seductive and it’s easy to allow our brains to become engaged in that fantasy of something more appealing to us.  In fact, our logical brains will kick into high gear to rationalize our emotional desires.  The reality is our choices, especially big ones, come at a cost.

I believe the more appropriate path is to keep it in the context of the impact a home purchase will have on your life plan  (https://survivingtheamericandream.org/more-meaningful-dream/ ) .  The ramifications of this large purchase will touch every aspect of your life and future.  I believe anyone contemplating selling or buying a home needs to think on a broader scale, on the whole of your life, both good and bad. Certainly, the nice house contributes in many ways, but it does require sacrifice. By stepping back to see where that fits – personally and financially – in the bigger scheme of the dream life, you might calm a lot of the desire.

The cost of a real estate transaction is significant.  When you sell, buy and move you should expect about 10% – 12% of the value of the home you are selling in expenses.  That’s $40,000 plus on a $400,000 home.  Imagine not moving and putting that into your retirement fund or kids college fund.  If you move one less time during your life… you just made a small bundle.  Take all the time you saved by not moving, and start a business, spend time with the kids, invest it in something meaningful to you.

Of course there are times for a move, but we’re not allowing our homes to become the nest egg our parents did and the reason is we buy, sell and move too casually.  There is a lesson there for us, let’s give it some serious consideration.