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BUYING A HOUSE—BUY LESS HOUSE THAN YOU CAN AFFORD

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This again flies in the face of what many so-called “experts” say. What they say—buy more house
than you can afford because your income will always grow—is a risky proposition that puts too much
pressure on you.
Why not start out buying a house you know you can afford? When your income grows enough to
support a nicer, larger home in a better neighborhood, then you can purchase that home.
When you buy your first home, you can take the extra income that you’re not overextending yourself
with to invest/save for your next home. Before you know it, you will be buying homes for cash (or a
limited down payment).
This is consistent with another principle you read about: Always live below your means. It works.
After buying my first house (after renting for ten years) with a small mortgage, I purchased all
subsequent houses for cash. In addition, all subsequent homes were more than affordable based on my
existing assets.
Most importantly, this strategy allows you to enjoy your young adult days without the pressure of a
high mortgage and the responsibility of owning a home.

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