The Human Element
Back in September of 2015, I received a rather anguished call from a young woman who was, with her husband, in the process of looking to buy a house for their young family. They had been living in a rental apartment with their two small children and were feeling the walls "closing in".
Her/their investment advisor had adamantly stated that buying a house at this point in the market would be a huge mistake and would diminish a good chunk of their savings (for which he was earning a tidy 1% by having those assets under his administration) and that if they did so, he would no longer be interested in working with them. He fired them.
We met and with tears welling in her eyes, she showed me the advisors email. We chatted about the nature of investment advice and those who were in it for the money and those who actually cared about the people that they served.
We decided to prepare a Wealth Forecast just to get a look at how all of the moving components (home purchase, cash flow, income, expenses, future savings, etc.) would play out in time.
As a relatively young couple, they had enough income and although much of their savings was in an RRSP, they were first time buyers and could take advantage of the Home Buyers' Plan ( http://www.cra-arc.gc.ca/hbp/ ) to minimize the tax burden of using RRSP money.
They transferred their accounts to a discount brokerage and I agreed (as a friend) to offer guidance (without any fees or costs to them, but perhaps with an understanding that when they were ready, they might eventually become clients, sometime in the future) with the timing of the liquidation of their holdings.
So they found a house in an area that they liked in early 2016 and bought it and were thrilled (only one other offer to contend with) and a little scared, but felt, finally, that they had put down roots.
And yesterday, in a message that touched my heart:
"Every day from sun up to sun down there are boys playing baseball in the park across the street from our house. I can see them out our front window. Somewhere in this pack is (my son), grinning ear to ear having the time of his life. Somebody pinch me"
And so my friends, it can be done and it is not necessarily about trying to time the housing market (because your children may have left the nest by the time this market turns sour), it is more about making a plan and re-structuring your financial situation so that you can live your dreams.
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