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Thinking about the future

Tuesday, August 14, 2007
It's always a scary prospect, when deciding how best to plan for the future. Recent reading on Get Rich Slowly has definitely got me thinking on this topic, in light of the big move we're making in the next 6-8 months.

After (what will be) 5 years of working and living in possibly the most beautiful spot in the world, right on the edge of the Great Barrier Reef, the age of our children, and honestly, finances, are inspiring a move south. Just for an idea, here is a couple of photos Hubby took from a helicopter ride we took a couple of years ago.

The Marina:


My old workplace:


An Island just off the coast:

So, as you can see, leaving here isn't exactly an easy choice. There are a couple of issues. One is the cost of living. I'm sure you can imagine the value of some of those houses in the first shot, and the real estate value of my old workplace? If not, here's a little hint. Add six zero's and you'll be getting close. Anyway, on top of that, wages don't necessarily fit the area. In fact being a regional area, wages are notoriously low, despite the obvious affluence of the region. Through a series of lucky coincidences (and bloody hard work) we've been able to buy here, even though at times it's been a bit of a struggle. But with child #3 around the corner, and Miss nearly 4 starting school in 18 months, other considerations added to our decision to make the move. The area we have picked in Brisbane to move to has an excellent reputation for schools, family friendly facilities, is precicely 40 minutes drive from my parents, and close to many long time, and new internet friends. All these combine to make the decision easier.

But back to the topic. What was it again? Oh yes, thinking about the future. A couple of posts on Get Rich Slowly that have given me pause lately. I first came across Get Rich Slowly through a link to this article on Renting vs Buying which explores the possibility that buying is not always necessarily the best option. Reading through the comments it's obvious that the majority reject this notion. This aversion to non-traditional-home-ownership options can be seen further in the earlier article "Is it Better to Invest or Prepay a Mortgage?"

The reason this has come up for discussion in this household, is the cash we will walk away with from the sale of this house, is a decent start to a savings plan, and as we're looking at renting anyway, for a while, until we get used to the area, what would happen if we didn't buy? Continued renting and put all our spare money into a decent (balanced) managed fund? Conservative estimates put our retirement at 10 years away. That was an eye opener. Yes, we'd have to continue renting for that time, and continue to rent ever after, but for Hubby, who's not a fan of his industry, the prospect of retiring at 49 definitely makes him stop and pay attention.

Now at this stage, it's an interesting idea, and just that. But even taking into account buying a house at retirement, it would only take 12 years to save that money. And very conservative estimates.

Were we to buy a house, put all our spare money in, it would still take 20 years to pay off. Is renting for 12 years a good enough price to pay for retirement potentially 23 years earlier? This is the question we'll be asking ourselves before we make the final decision.

1 comments:

  1. Joh said...

    It sure sounds like a good enough reason.

    August 14, 2007 at 1:23 PM  

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