Unable to Rent at 57? Wrong. With the Right Asset Allocation, Buying a Home Can Be as Easy as Buying Slippers
James replies that the issue is not failing to buy a home earlier, but failing to turn decades of non-homeownership into far larger liquid assets.
Comment from @chialinghsieh3338, 1 hour ago:
Hello James. You have always said not to buy a house. But I am 57 and my husband is 62. We have not bought a home yet, and our stocks plus cash currently add up to less than 20 million.
In Taiwan, landlords do not like renting to older people. Fortunately, since both of us have not yet retired and still have monthly salary income, we can still rent a place. But we are preparing to retire in two years, and we are worried it will be hard to rent then.
May I ask whether, at our age, we still do not need to buy a house? I am a newcomer. It is such a pity that I did not know James earlier.
James's comment reply:
The mistake is not that you did not buy a house. The mistake is why you did not buy a house and yet your assets are still less than 20 million now.
If you had not bought a house since you were young and had invested all the money you earned, your assets should now be above one billion. At that point, buying a house would be as easy as buying slippers, would it not?
Your current difficulty is not that you do not own a home. Fortunately, you did not buy one. Otherwise, you might not even have 5 million in liquid investment assets now, and the future would be even more terrifying.
If you keep investing now, in another five years, 20 million may become 40 million. That should be enough to buy a house suitable for living, and you would not need to sell your assets. You would only need to use pledged borrowing to pay the down payment.
If you have 40 million in assets, using 15 times annual expenses, 4000 / 15 = 2.66667 million. That is 2.66 million a year, and 266 / 12 = 221,670 per month. With about 220,000 per month in cash flow, five years from now you can live in retirement and pay the mortgage.
You can still buy a house and retire. If you have 220,000 per month in cash flow, even living in a luxury wellness village would not be a problem, would it?
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