The following is a guest post from Barrington Lewis of BarringtonLewis.com. You can follow him on Twitter @barringtonlewis. In addition to being an out of the box thinker, he is also black. So if your white, be sure to act super urban for no reason around him.
Renting isn’t as bad as it seems…
What I’ve quickly learned during my lifetime is that personal finance is like the weather…it’s ever-changing, it’s all relative, sometimes it’s predictable, and sometimes we will have an emergency (unpredictable). So to have our finances become like the Army Reserve (or “be all that it can be”), it must respond to changes in the “weather”. No one is completely safe from being underemployed, underpaid, or having their wages not keep up with the rising cost of living (just this year I saw a 17% increase in my healthcare costs, even though I’m considered healthy, at my ideal weight, etc.) Additionally, if we’re solely dependent on one employer – what happens if our current employer decides to lay-off 50% of its workforce (including you)? What if we have to take a reduction in pay or our job is eliminated? What if we can’t get a raise at our current employer to cover a 17% annual spike in healthcare costs and other living increases? What if we’re simply just tired and want to work somewhere new…yet there are no new jobs available to suit us?
The answer to these questions must be considered – especially in a world where we are inevitably faced with looming tax increases, inflation/cost of living increases, and slow wage growth. The answer to these questions is to have mobility.
Mobility: Keeping Your Options Open
Basically, we should keep our options open…and having mobility is a necessary commodity in case we have an opportunity to make more money in another part of the state…or in another state…or another country.
Owning a huge liability such as a house (and making payments to the bank) limits mobility…mostly because you’re stuck with the employers within the area that you live in. Instead of buying a house for yourself, maybe buy a rental property in a decent area for others to live in. This way you can receive some income and have it managed by others (i.e., a property management company). This is my plan and allows me to stay wherever I like and work wherever I can without worrying about selling my primary residence in order to move. If my company decides to cancel operations in Georgia and relocate its headquarters to Texas, I would be out of a job temporarily if I didn’t move – but at least my income from my rental property could cover my rent until I found something else within the state. But because I don’t have a house to sell – perhaps I can keep my job by deciding to move to Texas and renting there.
I can literally search for jobs anywhere and not just within one state. I have mobility. My property management company will keep my rental property leased and maintained.
As with anything there is a risk – just like it’s a risk to own a home. And I’m not knocking home ownership, because there are a lot of benefits and a sense of belonging to a community that comes with it. I’m merely just presenting other options. By renting I’m subject to rental increases, lack of privacy, etc., etc. But it’s a small price to pay for mobility nowadays. Plus, it gives me the option to move to the highest paying employer…in any state…or country. Similar to how most of these multi-national corporations have mobility with the option to move to the state or country where they can make the most money (i.e., the states/country with the lowest taxes).
Do you agree? Is mobility a luxury, or a necessity? Don’t be lame, comment!
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