Stare down the cow by all means. But have a solid Plan B.
Sydney man Pat Seyrak recently poked a very sacred cow and struck a chord everywhere when he declared that buying a house in a ridiculously overpriced property market was not for him.
Instead, he was aiming to invest in shares/ETFs in order to reach his goal of having $1,000,000 by the time he was 35, giving him a theoretical income of $40,000 a year – enough to roam the world as a global citizen enjoying different experiences.
Similar sentiment has spawned the appearance of websites like Millennial Revolution in Canada, which coincidently, also has a spiralling house price problem in major cities including Toronto.
The common thread in this tale of two cities is that instead of drowning in debt to buy a house – the sacred cow that is the ‘Australian dream’ – some younger people have come to the realisation that it is a perfectly valid strategy to rent a house and invest in other assets in order to build wealth.
It’s an appealing pitch.
Where you live and where you work matter less and less in today’s highly interconnected digital world. With regular mobile internet speeds in places like Bali faster and cheaper than Sydney and Melbourne, there are plenty of people who embrace this renting strategy.
Truth be known, there have always been individuals who have walked this path. They rent where they like to live, share houses and chase career opportunities all over the country and the world. Along the way, they learn valuable new skills and build their personal brand in the years before settling down – if at all – and as a lifestyle, it seems to be growing in popularity.
Living the dream is all well and good, but first a word of caution.
We’ve all heard the tales of young professionals working in low-tax environments like Hong Kong, Singapore and the UAE. Some have nothing to show at the end of their experience except photos to remind them of all the fine dining, expeditions and adventures with friends and in some cases, even a credit card debt!
The key to ‘living the dream’ is realising that while renting and investing is a valid alternative to home ownership, you need to be committed to a strategy that differs from what used to be the Australian ‘societal norm’ of buying a first property and then progressively upgrading through the years.
Margin Loans from lenders like Leveraged can provide you with the tools to help build wealth for your future by combining two powerful investment strategies – the discipline of a regular savings plan and regular monthly borrowed funds to kick-start an investment portfolio.
Margin loans come with similar tax advantages to investing in property. It’s a handy way of building ‘credit-worthiness’ for later down the track.
Disclaimer: this is a sponsored post from Leveraged Equities. Information contained within this article is of a general nature. Do not be rely upon it when making financial decisions. Please consult a professional financial advisor or planner (like us!) before acting.