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March 19, 2012


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This is a good story, and it's admirable how focused they were on their goal of buying a house in cash. That said, I don't understand the purpose of that goal - they could have saved for one year, bought the house with 20% down (or more, as it sounds like they were saving much faster than they thought they could), and continued to live the same way while building up their equity rather than wasting money on rent. The house could have been paid off just as quickly, but they'd have had enjoyed it for longer.

That's so cool & Congratulations! I almost cried when they described how they did it.

So Awesome!

I have to agree with Jonathan, it is great to save up such a large amount, but it seems they could have done better with a mortgage.

Since loan rates are at historic lows, why not make a 20% down payment use a 15 year fixed mortgage at around 3% and invest the rest of the savings. I wonder if they sacrificed retirement savings during the 2.5 years they were intensely saving for their home?

-Rick Francis

That amount to buy the house is a low-end down payment in my area. I know, FMF, I am doing it wrong, but I love my city and my family and couldn't imagine living anywhere else unless I had to.

Good luck trying to do that in Vancouver where the average price for a detached house is now over $1 million... so, using their formula, you'd have to save about $17,000 each month to buy the house in cash in five years.

To be able to have $1,700 in extra cash per month is a feat in itself. For years, I haven't even made close to that amount per month, much less make that much EXTRA once basic bills were paid.

Well, I could probably realistically save around $50 a month now (maybe) after paying the most basic of bills (shelter & food).... $100,000 / $50 = 2,000 months / 12 = 166.67 years! If I saved for 166.67 years, I could afford that home. I think my first step needs to be to increase income. 0_o

Fabulous! Aside from a very cool accomplishment; I was very impressed by the method they went about planning and saving. It's scary that more individuals don't have a Process in place on how to save money!

One could argue that they should have gone with the 20% down and 15 year loan, but who can really fault them too much? Their goal only took 2.5 years, and now they can easily plow $1700 a month away for retirement (or maybe more since they don't have a rent/mortgage payment). Assuming the economy muddles along, they will be fine.

I'd saved enough that I could have bought my first house with cash in 2010. Instead, for the same amount of cash, I bought three rental houses with mortgages and fixed them up. The rental income more than covers the mortgages and expenses (principal, interest, tax, insurance, and maintenance), earning me nearly $20k extra income last year (after expenses and taxes).

I understand the emotional value of not having a mortgage and being fully debt free, but I also think there can be good reasons to leverage debt. In my case, it enabled me to start three profitable businesses (with profits that only increase over time as rents go up and my interest payment goes down), plus I get 3x the appreciation than if I'd bought one house, plus I get additional tax benefits, plus I have a good hedge against inflation, plus they'll all be paid off in 28 years when I hit retirement age!

Still, it's a great and inspiring story about how to set goals and work to accomplish them. Thanks for posting!

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