Investing in Action over Object

I’m lucky to be 25, in a secure job and able to shop for a condo or house at discount prices in our current economy. In fact, I’ve seen close to twenty places over the last 10 weeks or so and a couple of have impressed me enough to reach for the check book. For better or worse however, those places had other offers and apart from one low-ball back-up offer I made, I wasn’t willing to get into a bidding war. The plan from the get go was either buy under what I could afford, or just at my comfort zone and rent a room or two so my lifestyle of never cooking* and fancy eating needn’t be limited.

Shopping around, the idea if settling down always made me nervous (I know, a big shocker if you know me). I chalked this up to cold feet for a while. “Of course I’m nervous, it’s a big commitment, a big step in life. One of the big three: house, wife, kids” etc. But in this personal era of deconstruction and self-analyzing, I’m led to question all the standards and anytime I’m thinking about doing something that I potentially don’t want to do, old culture and tradition is getting the Jake Bales microscope treatment.

Like you’re beginning to understand, the idea of working 9-5 for the next 35 years isn’t quite filling me with energy and happiness these days. And since the goal I’m seriously considering setting for myself is autonomy, dropping and locking (dropping $35k and locking myself into a mortgage) doesn’t sound like the best idea for me right now.

I have no wife, no kids, no debt (apart from a fairly impulsive convertible), not even a girlfriend or prospective girlfriend to inspire some burrowing down on my part. For SoCal my rent is almost hostel-like (550, all utilities included). So I’ve got money, energy, potential freedom, tons of contacts in my industry, experience and security (until I run out of money or get kicked out of my place). So I figure, why buy? My dream is not working 9-5. If I buy a place, I forfeit that dream, and I’ll never know if it was possible.

Tim Ferriss (ug, I hate sounding like a guru’s disciple) encouraged people looking to escape this sort of trap to outline their Nightmare Scenarios. What’s mine? Well, I’d run out of money in 1-2 years if I failed to do much contracting (I think I’m set up to do plenty by the way), I’d be out a year’s salary and back on the job market (I’ve never applied for a job or been interviewed, but I think I could figure it out), and I would have missed some potential bounce-back of the housing market crash.

Mathematically, I can invest $300,000 into a place that was roughly $380,000 pre-market crash. If the market rebounds 50% in a couple of years, I’m up 40k on a 35k investment, which is pretty good (though I’m sure there are lots of things I’m missing in that calculation, like buyers/sellers/agent fees, property taxes, etc.), but then I’m out of the freedom game. I could try to make it big or even just make half my current salary over the next couple of years, ideally working less than 40 hours a week, but even if I do work that much at least it’s on my own schedule, and I’d keep the dream alive. I think there is serious potential of succeeding with something far bigger during this vacation from “real life”, and seriously, how can I not take the chance?

That 35k could equate to $0, it could break even, or build me a life much closer to what I dream about. Worst-case scenario? I defer “setting down” for few years or I just get another job. Best-case scenario? Unlimited.

*I have been cooking the Three Minute Breakfast. I don’t want to say his name again…but you’ll see who taught me…

-Jake Bales.