A wise mentor once told me “All people are investors. Some are just better investors than others.” I think there is a lot of truth to this statement. We human beings generally own 3 major assets we can invest with: 1) time 2) money 3) energy. Where we choose to spend our time, money, or energy can heavily influence what future life experiences we have. For example, if we get up in the morning and choose to invest our time at school or work (learning new things or earning money) we are likely to have different experiences (and meet different people) than if we choose to stay home. So too, if we choose to invest our money into renting an apartment instead of buying a house or condo (while renting out a room) we are likely to experience different outcomes (both short and long term). And for the third one, if we invest our energy into working out at the gym on a regular basis we are more likely to be healthier and more fit than if we don’t. So investing means more than just money, but how does this relate to mortgage?
In his famous book Rich Dad Poor Dad Robert Kiyosaki gives the following quote:
“An asset is something that puts money in your pocket and a liability is something that takes money out of your pocket“
Robert Kiyosaki
Assets VS. Liabilities
For many years I thought for sure that owning a home was “too much work”, or that it would tie me down, restrict my freedom, and put me in a bad life position where I wouldn’t be able to move quickly or pivot where I wanted to go. I now realize that those beliefs (which were likely given to me by my friends and peers at the time) were mistaken, but it took me years to discover it. At the time, I was renting a tiny granny-flat studio apartment (about 650 square feet) beneath my landlords house. I rented for about 4 years. Each month I paid rent on time but it didn’t dawn on me until much later that my rent was enough to cover my landlord’s entire mortgage payment! He and his wife were basically living for free while I paid their mortgage! At the same time, their home was growing in value (in a big way). It was then that I realized “Owning is power”, as the saying goes. I was putting money into his pocket. Thus, I was an asset to him and paying rent to him became a “liability” in my mind since it took money out of my pocket. Right then, I decided it was time to make a shift. I realized that if I could own a home like him I could rent out a room (or even a granny flat!) and live for free (or close to it). Therefore making life easier, not harder like I had previously believed.
Shortly after that epiphany, I began to make different choices that would put me in a position to buy my first home. I started investing my time into finding a higher paying job, so that I could save more money, while also investing time into self education and mentorships (in order to gain more knowledge and become more financially literate). In just three short years I was able to buy my first home while also having enough savings to be comfortable in case of an emergency. “Yes! I now have the power to rent out more than one room, or the entire house if I choose to travel. I now have an asset” I thought.
Today, in 2022, many people are choosing to keep renting, staying on the sidelines of homeownership for a variety of reasons. But if you are someone who is starting to have a mindset shift, if you are starting to realize that having assets is better than liabilities, I would like to hear from you. What is your story? How can I help make your life better? If I can help you accomplish your goals by getting you approved for a mortgage (or maybe even another mortgage), helping you improve your credit, or anything else within reason, I will do everything I can.
