My Dream of Buying a House in Cash
It's not yet a specific goal of mine to buy a house in cash, but rather a dream. It's not that I don't think I can do it, because I do. It's that I don't know when I'll want to buy a house. The dream of it is what's been on my mind lately because right now, I have no plans to move out of my modest little one-bedroom apartment that I've lived in for the past five years.
How It Started
My life has been very different ever since I decided to not be broke anymore. Yes, it really was a decision. There were two sides to the equation of not being broke anymore. They were income and outgo. I kicked it at work. I was fortunate in MANY ways throughout the past five years in this area. On the outgo side, I cut the crap out of my lifestyle. No cable TV. No unlimited text messaging. No going out to lunch. I did very little dining out, bar hopping or traveling. I looked at every single line item on my budget and attempted to cut it. I ALMOST went to some crazy extremes. Boy, did I really not want to be broke anymore. And you know what? That attitude is what it took. I'm not broke anymore.
Not only am I not broke anymore, but I have a few bucks stashed away. It's crazy how my lifestyle didn't creep up after I got out of debt. I got used to living on nothing for the year or two I worked to get out of debt. It was no big deal to maintain my pretty comfortable standard of "deprivation". So with a nice income and a low cost lifestyle, I put more money away in less than two years than I ever thought possible.
Today, I'm not a victim anymore to how bad the economy is or how the little man can't get ahead. I know from experience that I can get ahead. In fact, I know that I have the ability to knock my finances out of the park. About a year ago, a question came up in my mind as I thought about my future. Could I buy a house in cash someday? I didn't have to think too hard about my answer before it came out, "Yes, I can".
My Dream
And that is when the dreaming began. Here's a personal tour of this little dream of mine:
It's the summer of 2015. I just turned 31 a few months back. I may or may not still be single (hopefully, I'm not). I'm hosting a party tonight at my new house where I've invited 25-30 of my close friends, family and business partners. As the sun sets, it's about 72 degrees and we're grilling out, having wine, beer and champagne. The occasion? I just bought my first house!
The guests start arriving. They don't think much of it. "Nice house, Kraig", they say to me. In casual conversation, the questions start getting asked. "Did you score an interest rate in the low 3's, Kraig?" Another friend asks, "Did you do a 30 year or a 15 year? I hope you got a fixed rate mortgage as well. I did, and it sure gives me comfort."
My response to these questions almost knocks these friends over. "I paid for the house in cash". "Whoah" everyone says. Some jealously comes into play when people start thinking of me as being lucky, in the right place at the right time or born into the right family.
When the how questions come out like, how did you come up with that kind of money, I start to feel a sense of accomplishment as I say, "I worked hard and saved it".
It's Not About The Money
Knowing that I worked that hard for something over several years, never giving up and always keeping my nose to the grindstone, is something I look forward to feeling. It's years away. I don't want to show off my richness to my friends and family. Instead, I want to show them that if you work hard, set goals and never give up, you can accomplish things that most people would have never thought possible. I want to be the guy that shocks others with the things I accomplish, not because of luck or entitlement, but because I focused, worked hard and never gave up.
Money isn't the reason for it all. Hard work, crazy hard goals and a sense of personal growth is what I'm working for. Oh yeah, I kind of like the thought of never having to pay rent again and never having a mortgage. How awesome would it be to start a family with a paid for house? I'm on a mission. I have work to do.
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31 Comments
- September 26, 2012 at 8:18 PM
Congrats on setting and working toward the goal. What type of house do you hope to buy? We got our first house as a townhouse and it was much cheaper (and smaller) than I thought we'd get but it is working great for us at this point in our lives.
- Kraig @ Young Cheap Living says:September 26, 2012 at 8:27 PM
Well, like I said, it's not yet a goal of mine. And as for the type of house, a modest one for this area. One in the suburbs, likely and one that is just nice enough to live in but not overpriced.
- Derek Knight - Freeat33.com says:September 27, 2012 at 11:32 AM
Im with Lance. My first home was a townhouse. Even though there was a condo Fee of $150/mth. My living expenses with a mortgage where still much less than they are now in a house without a mortgage. Also, I bet you find more joy out of simpler things now that your life isn't so cluttered with stuff. Cable, satelite, best clothes, electronics. I do. Im also excited to have a home, and I just bought a house on the lake, and only have a $30k Mortgage. Awesome! It is supposed to be an income property. But I kind of love it :(
- Michelle says:September 26, 2012 at 8:50 PM
Our next house will be at least 50% paid for, that is our goal!
- Kraig @ Young Cheap Living says:September 26, 2012 at 11:20 PM
Nice goal!
- SmallIvy says:September 26, 2012 at 10:27 PM
I hope you achieve your dream. If more people bought houses for cash, they'd have an extra couple hundred grand in the bank when they were in their mid-forties from the interest the would save. Suddenly sending the kids to college wouldn't seem that hard.
- Kraig @ Young Cheap Living says:September 26, 2012 at 11:20 PM
Thanks! Right on!
- Veronica @ Pelican on Money says:September 26, 2012 at 10:38 PM
Kraig, sounds like a nice dream :) Few years ago I had the chance to buy an decent small house in a neighborhood in the Midwest (in cash) but I chose not to. Reason being, I would have to move there and all of my money would be tied up in it - just not a good enough reason to leave California. Now I'm stuck here with no real chance of affording a house in the near future. I too share your dream, in my dreams.
- Charleen Larson says:September 27, 2012 at 1:19 AM
You have the determination and the drive -- you can do this. The first house is the hardest. It gets better, especially if you don't sell any property. Rental income is nice. I'm looking for our third house now. Tnen one more after that and (as my husband says) we can trade up to a hotel. :-)
- Kraig @ Young Cheap Living says:September 27, 2012 at 8:47 AM
That sounds exciting. Good luck!
- September 27, 2012 at 5:25 AM
It might feel great, but at least consider the interest rate environment when you get to that point. If interest rates are still this low and you can get a 3% interest rate, why not take that and invest the money somewhere you'll be more likely to get a higher return. It's a slightly riskier proposition, but even if you were only getting a 6% return on your money, that'd be a net 3% gain for you.
- Kraig @ Young Cheap Living says:September 27, 2012 at 8:46 AM
Thanks for the suggestion! That may definitely work for some, but I don't think that strategy fits me. I don't like debt and that would still be debt.
- krantcents says:September 27, 2012 at 8:59 AM
My next home will probably will be all cash, because I will be retired and my current home will be paid off. Personally, I like that I can leverage my cash with a mortgage at such a low interest rate.
- Kraig @ Young Cheap Living says:September 27, 2012 at 9:14 AM
Good luck. Owning a home free and clear is exciting!
- Carrie Smith says:September 27, 2012 at 9:33 AM
Kraig, you're awesome! Thanks for opening up and sharing your dream with us. I know, without a doubt, that because you work so hard and are disciplined with your money, you will have that paid for house whenever you want it. I also hope to share your success one day and be hanging out at that BBQ hearing your story!
- Kraig @ Young Cheap Living says:September 27, 2012 at 1:59 PM
Thanks, Carrie! I'd love to have you there too!
- Mo' Money Mo' Houses says:September 27, 2012 at 12:05 PM
Hey, if you can do it do it! Though that's not a possibility where I live. I think I'd probably has to move up north or to some small town in the prairies to afford to buy a house in cash (Vancouver is one of the most expensive places to live in the world), but my dream is to have maybe a 15 - 20 year mortgage and to actually be able to purchase a house where I live without having to live really far away.
- 20's Finances says:September 27, 2012 at 1:02 PM
I definitely like this dream (I'm really tempted to say goal.. haha). I would love to buy a home in cash, but it's not going to happen for us since we live in an expensive area (unless I strike it rich all of a sudden). I do look forward to my first house warming party!
- Kraig @ Young Cheap Living says:September 27, 2012 at 2:07 PM
Just so you all know, housing is expensive in my area too. I'm planning to buy very modestly. This certainly wouldn't be any crazy nice house or anything like that. It would be very minimal in niceness.
- Brent Pittman says:September 28, 2012 at 1:30 PM
That is an awesome and almost unheard of...ok so I've never heard of it from an average joe.
- Kraig @ Young Cheap Living says:September 28, 2012 at 3:38 PM
You must not know Average Joe from The Free Financial Advisor then! Haha
- Mitch H says:September 28, 2012 at 3:09 PM
Great goal Kraig! However, if the right property comes along you may want to jump at the opportunity. I DISLIKE DEBT too, but my wife and I bought our first house exactly 1 year ago because we found a completely renovated 4 BR home on a 1/2 acre cul-de-sac lot in New Hope, MN in the low $200's. We put 20% down to alleviate PMI payments and have an extremely manageable mortgage payment. At ages 25 and 23 we don't know if we made the right move using most of our cash for the DP, but now we allocate all our money to investments since we aren't saving for a house. And backyard bbq's are great! Good Luck to you sir and we ENJOY your blog!
- Kraig @ Young Cheap Living says:September 28, 2012 at 3:37 PM
Hi Mitch, Congratulations on your new house. Your even a neighbor to me here in Minnesota. Thanks for the comment!
- Mandy Knight says:October 7, 2012 at 7:57 PM
Love the goal! Sounds like you and Derek share the trait of aiming high. Good luck and happy shopping, in a few years!
- Kraig @ Young Cheap Living says:October 7, 2012 at 8:02 PM
Thanks, Mandy. Hope things are going well for you!
- Nicole says:November 12, 2012 at 1:38 PM
I found your blog today, Kraig! My husband and I share this goal as well. I only know of two people, one personally and another blogger who accomplished this goal or dream that became a goal! By no means will it be the nicest house on the block, but it will be paid in full. Just knowing someone else out there has the same goal as we do is thrilling!
- Kraig @ Young Cheap Living says:November 12, 2012 at 5:45 PM
Hi Nicole, I'm really glad you found your way to this blog! Yes, there are others out there who share your dreams and goals. I am amazed at how many blogs other than mine there are out there of people setting crazy goals and achieving them. It's an exciting way to live. A house paid for in cash is a pretty great goal. I can't wait until I can accomplish it. Hope to see you around here again!
- Mr. Wobbles says:April 16, 2013 at 7:44 AM
Nice dream, I'm 24 and was recently able to buy a house all cash thanks to a windfall from selling a business. You still kind of worry about being tied to one place but it's only been a few months and it's so nice not making rent payments or dealing with a landlord. I was also a little worried about opportunity cost, but ultimately thought this would be worth it because if I ever lose my job a mortgage payment would just be a weight over my head and I don't want to have to trust my investments to bring back better returns. Utilities and insurance aren't too bad and are ridiculously manageable without a mortgage. After I bought the house I also opened up a healthy sized investment portfolio and keep about a year in emergency funds. So I read a few of your posts and starting a business and investing in yourself is definitely the way to go :P My next goal is to save enough for a new business.
- May 10, 2013 at 6:36 AM
That sounds like a hard goal to achieve, but the way you've been shaping up in the last few years, working hard and leading a minimalistic lifestyle, I guess it's likely you're going to achieve it soon. Good luck! My goal is somewhat similar to yours, although I'll want to pay 50% of it as cash.
- Anoni Mous says:January 7, 2014 at 2:31 PM
We paid cash for our place. Granted, it is a rural area, and a fixer-upper, but definitely worth it! Even though this post is well over a year old, I want to encourage the author that it CAN be done the way he is going. There are no magic pills, or special events that happened in our case. Just honest, good ole' fashioned hard work! We are in our mid-twenties and expecting our first child, and it is so peacefull to face the future and live debt free.
- Kraig @ Young Cheap Living says:January 7, 2014 at 2:34 PM
Wow, what an inspiration! Thanks for sharing this with us! I know it can be done and someday, I hope to do what you have done. Congratulations and thanks again for sharing!
