Climbing to Freedom
I wasn’t “climbing in the moment.” I wasn’t focused. I was into day 3 of climbing at Adventure Rock, but thinking about a comment a millennial had made to me:
“Michael, we haven’t known anything but a bad housing market.”
A true statement, reflecting legitimate concerns of those in the 25-45 year age bracket. I was struck by that thought – on the wall – as I planned where my hands and feet would lodge next.
My climbing thoughts (risk and lack of experience) were analogous to home buying. How could I be successful? How can home buyers be successful?
 As noted in my last newsletter, “The share of bankruptcy filers who are older than 65 is the highest it’s ever been.” And “Far too many Americans are behind in their retirement savings.”
I believe money brings freedom and freedom allows options.More money is better than less. That may sound offensive. It should not. It isn’t about money…it’s about freedom. In fact wealth (however one defines that) shouldn’t be the goal. The goal is freedom.
Former Journey lead singer Steve Perry (nod to Amanda Holloway) was recently asked if he would re-unite for a concert tour with his former band mates. He replied, “Probably not. I have a car and I have a house and I don’t need the money.” Freedom.
How do those aged 25 -45 obtain their freedom? Buy a home. Save money. Limit expenses. Be curious. Learn. Have some luck.
I don’t dismiss renting at an older age. I do (generally) dismiss renting at a younger age. When you buy a home with a standard mortgage, you pay off that debt over time. In many cases that payment may be at or less than what you pay in rent.
 In my younger, years I recognized I was not a good saver. Recognizing that, I needed a forced savings account, which came in the form of buying a home with 3% down. I actually kept a sheet that tracked how much I’d pay down my mortgage over a 5-year period, what my home might appreciate at, and what my balance might be at the end of year 5.
Today it would look something like this:
Purchase a $200,000 home with 3% down ($6,000). The balance owed on a $200,000 loan at 5% after 5-years would be $183,000.
If homes appreciate at the historical average of 3%, at the end of year 5 my $200,000 home would be worth $230,000.
I’d be $47,000 closer to freedom ($230,000 – $183,000 = $47,000). Less debt (mortgage) became my method of saving at a young age.
(Yes, I know homes have maintenance expenses but I consider those part of the forced savings plan.)
I know you could do just as well or better if you saved and invested. It’s a nice theory but you can’t live off of theory. Look at paragraph 4 above. People don’t save. If you don’t save then try the forced savings plan. Buy a home. Sure it’s a trick but it’s a trick that can work.
With home buying there are good and bad homes to buy and good and bad agents. That means you must be careful when and how you buy a home. Similar to climbing, when buying a home if you aren’t informed, you are at risk.
 I ask lots of questions of experienced climbers. I want the good route (the home) and information from good climbers (an agent who legally and really works for the buyer) and a route (the buying process) that works.
As I learn to climb, I think about the step – and the step after the next step. I’ll accept the risk for the reward, but I need to do it correctly or peril awaits.
To avoid housing peril, buy correctly. If you know a millennial that wants to “climb” into home ownership – schedule a coffee with Seamus, Mike or me. All that’s at stake is their long-term freedom.
Thanks for reading,
Michael D. Holloway
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