Here is the complete transcript of the podcast
Welcome or welcome back to Success with Srini. Happy Sunday morning to you today on the podcast, I’m answering a question that has come in from a longtime listener of this podcast, also, my radio shows. And I believe attended one of my seminars also sent me two questions. And I’m picking up the second question here because this is related to real estate. And I talked about real estate investing, specifically buying a house in Silicon Valley, where I am. And this was a few days ago, I talked about real estate, and it’s very ripe, it’s very dominant on my mind. So I took up the second question, which is about real estate. And the question is this, “Hello, Srini. I really liked your podcasts, I have a few suggestions on topics that you could have a podcast on.” Thank you, and the second one here is, “Suppose I plan to have a house or another big dream, I say for it, sacrificing certain priorities but when I start exploring market goes out of budget. It becomes frustrating at times, what approach should one take when earlier plans go for a toss due to unexpected situations?”
Beautiful, wonderful question. And thank you for asking this question. And appreciate you being a listener. Now, I can’t answer this question by telling or explaining what you should do. The way I would prefer and I usually answer the question is, what would I do if I were you? And here’s what I will do. And I think I already answered this question in the earlier podcast also, no, knowing what I know, here’s what I will do. I will ensure that whatever I buy, I buy a single-family home, a castle, a townhome, or a condo, whatever I buy, or a mobile home doesn’t matter, whatever I buy, I’ll ensure that the mortgage payment I make on that house is going to be somewhere around 20 to 30% of my net, take-home pay per month. This is the first rule. I would like to violate that rule. And the only way I will violate that rule is when I make a significant downpayment. Because the prices are escalated are very high, the market doesn’t seem to go down, I don’t think it’s going to crash. The two times the market crashed were in 2007, November, and December timeframe. And then prior to that was the 1930s. I don’t think the real estate market going to crash, it will slow down. And all hype is going to go away to a larger extent. So my mindset, I wouldn’t be waiting for the market to crash. And investing in general means that there is a certain kind of return that’s going to happen over a period of time. So if you look at all the investors who really made it very big, even in real estate, they bought the properties at a time without really questioning or without looking for great deals. They had money, they invested the board first, second, third, fourth property and like that, and they kept on buying, and over 1015 20 years, they just enjoyed the markets as markets kept on going up, they saw their assets going up in value. And that’s also true with stock markets too. And foreign markets and in any other investment for that matter where you need to have the discipline to keep on investing and waiting. And using the power of time and the principle of compounding over a long period of time to really benefit and get returns.
So my point is, when you say you’re sacrificing certain priorities, the truth is, if any investment demands a certain amount of sacrifice, anytime somebody invests in something, it’s just not about money, it’s about your feelings, your emotions, a lot of things that play and interplay. So just talking about money, yes, it does become frustrating. Specifically, people tell me that they see other people who are identical to them, buy bigger houses, and all that it just hurts them. And my suggestion to them is you don’t live that life, you will not know what they are going through to get to that level.
So there’s no way that two people are, you know, under no circumstances two people are identical. So there is no point in comparing contrasting and competing with anybody else. So this is your game, you play the game whatever way you want to, and whatever way you’d like to. So, yeah, if you start comparing yourself with somebody else, yes, it will hurt but there’s no point in doing that. And knowing what you know, and what approach should one take my approach is very simple and I said it very loud and clear, which is if you can afford it, if I can afford it, I buy it outright with money. If not, then I will make sure that I make enough downpayment where I will ensure that 20 to 30% of my take-home pay can pay it the more To get on a monthly basis, and my goals, my subsequent goal would be to pay off the house as soon as possible. This is a principle that I have started living by. And this is the principle I started living by since I started losing houses my own investment into foreclosure and short sales. And I’m very vocal and open about it, nothing to hide. So less than a taken lesson learned the hard way. And this is what I now stand by. And this is what I promote.
Hopefully, I answered your question. If not, if you have a follow-up question to this, I would love to take it. At any point in time, you have a question on any topic that you think that I can be of some help or I can provide you a segue into your thinking, by all means. 888-818-0404 is the number where you can text me. And that’s all for now. And I’ll be back here again tomorrow. And hopefully, I’ll take up the first question, which is about immigration and all that. So about children, immigration parents, and all that some talk about that is the first question tomorrow. Okay. That’s all for now. And have a wonderful Sunday, and I’ll catch you early tomorrow. Bye now.