Dear Scott,
Eight years ago we were hiding our car from the repo man, had $80,000 in credit cards, faced foreclosure, and owed everyone including family. Our solution? Shove overdue notices in a drawer and hope they disappear. Fast forward: we’re debt-free, own our car, have $40,000 in Mojo, and no credit cards. We’ve reached Barefoot Step 4 (Buy Your Home) for the first time ever.
Here’s our dilemma. We live with my parents on their Gold Coast acreage, paying $400/week rent. Our plan: stay 15 years until the kids finish school, then buy a motorhome and travel while I work casually as a teacher. With current housing costs, should we still try buying our own home? Or should we skip Step 4 and boost our super to 15% instead? Eight years ago our biggest problem was financial disaster. Now it’s whether to buy a house or choose an alternative lifestyle. Without your books, we’d never have this ‘problem’.
Kylie
Hey Kylie,
Let’s stop for a moment and savour your success.
I hear rags-to-riches stories all the time. But yours is more impressive: you were drowning in debt and denial… then turned it around completely.
That takes an identity shift most adults never make. Well done.
And hats off to your parents too, who clearly helped you along the way. The key question now is: are they genuinely happy for you to stay another 15 years? And are you?
If you’re all good to stay put then there’s no pressing need to buy a house,
though you might consider buying an investment property. Regardless, here’s the thing: homeowners build up wealth by paying off their mortgage over time. If that’s not for you, then you’ll need to create that same discipline by funnelling your savings into super instead.
So I’d bump your super to 15%, and throw any extra savings in there too. Think of it as your mortgage payment – except it’s building your retirement fortress, not bricks and mortar.
That way, when your homeowner friends retire with paid-off houses, you’ll have a fat super balance to fund your motorhome adventures around the country.
Scott
