A Small Retirement Home Will Hold More Happiness Than a Large Retirement Home

Perhaps you have let the concept that your creativity is worth at least a cool million dollars go to your head. There is no question in your mind that you are destined for financial greatness and you won't require Social Security as a secure safety net.

And what better way is there to feel prosperous than to live in a nice home located in an exclusive superb? You have convinced yourself that a spacious, comfortable house will make you more creative and productive in your occupational pursuits.

Another reason for buying this home is that you will be inspired by the successful people living in this area. Still another reason is the larger the house you buy, the more it will go up in value, and the wealthier you will become in the future, providing you with a nice Retirement Income when you are Joyfully Retired.

With all this in mind, you have decided to buy the largest house that can be financed with first, second, and even third mortgages. Your decision to purchase a swanky home will be supported by many financial wizards. They advocate that you should never extend yourself to buy a car; however, if there is one thing for which you can go out on a financial limb, it's a house.

This concept is supported by Harvey Mackay who advises us to, "Buy cheap cars and expensive houses." The basis behind this strategy is the opportunity for long-term gain. Chances are fairly high that the value of the house will escalate and it's almost certain that the value of the car will do the opposite. Because houses don't normally depreciate, financing the purchase of a house is a good forced-savings plan which builds wealth for the future.

Zen Rich philosophy advocates restraint when acquiring a house, however. Purchasing too expensive of a home can make you "house poor." even when prices are going up. With the high monthly mortgage payments, you won't be able to enjoy some of life's little pleasures. As you can well imagine, it's difficult to feel relaxed and prosperous (while having fun at work) if you are concerned whether you can make next month's mortgage payment every time you take the family out to dinner.

The idea that there is a big profit potential with a large house may not hold anymore. Experts are now predicting that prices don't go up nearly as fast as they did in the past. Moreover, demographics indicate that, due to the aging population, the trend will be towards smaller homes. Thus, selling prices of large homes could easily come down due to lower demand. So much for profit potential as a reason to purchase a large home! The point is, it's easy to rationalize any purchase without giving it much thought.

Unlike these crazed status-seekers, you, as a Zen-Rich individual wishing to simplify your life, should question why you would want to buy a much bigger and fancier house than you need. Houses in certain suburbs are now 3000 to 4000 square feet, when 1500 square feet will be more than enough for the typical family. Who really needs four bedrooms, three baths, a dining room, a den, a family room, and a living room?

This is not to say that all luxury should be avoided. Some luxury is a good way of rewarding oneself for being creative and productive, but it's amazing how many people don't ever use their fireplaces, family rooms, and swimming pools. In this regard, William Morris offers some wise advice: "If you want a golden rule that will fit everything, this is it: Have nothing in your houses that you do not know to be useful or believe to be beautiful."

Realistically, houses will always play some role in our self-image, personal identity, and social standing. For this reason, it's important that you get in touch with all the factors that may influence you to choose the house you want, especially if it is large and luxuriously equipped. You must ask yourself, "Beyond the physical functions, what are the psychological functions that this house serves?"

Remember that true or complete ownership isn't realized until the day that the mortgage is paid off. To the degree your ego drives you to purchase a larger house than you can afford will determine when, if ever, you attain true ownership.

Contrary to popular belief, the largest and most luxuriously equipped house in the most exclusive neighborhood doesn't guarantee personal satisfaction and fulfillment. In terms of physical features, it's important to like your house and neighborhood and have it well-suited for your needs and lifestyle. However, for a house to be truly a home, it must be filled with strong human relationships, family cohesiveness, and meaningful life experiences.

The bottom line is, bigger and fancier houses don't mean happier homes.

Here are some quotes and poems relating to houses:

I suppose I passed it a hundred times,
But I always stop for a minute.
And look at the house, the tragic house,
The house with nobody in it.
- Joyce Kilmer


He makes his retirement home where the retirement living is best.
- Latin Proverb



Also See:



HOUSES AND MONEY

Money and Happiness

How to Become a Millionaire

Friends and Money

The Best Business Promo Giveaway for Retirees by Ernie J. Zelinski

Your Home as Part of Your Retirement Plan Is a Haunted House

Many Americans came to think of their homes not only as castles but also as a nest egg for retirement while real estate prices were shooting up during the first half of this century.

Now with the bursting of the home price bubble (which does not come as a surprise to an intelligent person), however, American homeowners are finding that they have accumulated little wealth in the way of home equity, leaving them almost entirely dependent upon Social Security and Medicare.

Fact is, A home that is part of your retirement plan Is a haunted house. Financial planner Robert Doyle (CPA with Spoor, Doyle & Associates in St. Petersburg, FL) once said, "When you retire, your house is your home. Don’t look at it as an investment. You can convert it if you need to, but if you’re retiring because of the equity in your house, you better get back to work."

A little over a year and a half ago, when I was forced to purchase the half-duplex that I had rented happily for over 25 years, some of my friends warned me that I could be purchasing at the height of the house boom in Edmonton. I told my friends that I was aware of this but I was not purchasing the place as an investment or as part of my retirement plan. Indeed, houses should never be considered as an investment — for retirement or otherwise!

"A house should be viewed only as any other consumer item," was how I put it. "Then if the price goes down, it is no different than when the price of your car or your running shoes go down in price. Unfortunately, most people don't understand this. Some do, however. (Robert T. Kiyosaki, the author of Rich Dad, Poor Dad, stated that your house is not an asset but a liability.)

"The problem," I told my friends, "is that millions of people have been conned by shady bankers and real estate agents into believing that their home is the biggest investment that they will ever make in their lives. What a ridiculous statement! I know that the biggest investment that I will ever make in my life is in myself, in my self-education about how to live within my means so that I don't have money problems. My self-education also is enhanced by tapes, books, and seminars on how to create money in innovative ways so that I don't have to live in poverty — even if haven't had a real job in over 25 years."

Alas, the con job of having people believe that their houses are investments has come home to roost. The 2008 Retirement Confidence Survey just showed the biggest one-year drop in its 18-year history.

One of the major reasons was that that home ownership was a substantial component of most respondents' net financial worth: one-third on average, according to a study of baby boomer retirement security by Dartmouth College economist Annamaria Lusardi and her colleagues. They further calculated that an average national housing price drop of 13.5 percent — less than we've already experienced — would decrease the net worth of the boomers they surveyed an average of 10 percent.

A loss of 10 percent of net worth for people on the verge of retirement — which doesn't include stock market losses or the losses people will incur if the housing market continues to fall, as many analysts think it will — can have a big impact on a retiree's ability to live the life he or she imagined.

Yet many Americans are relying on their homes as a source of income in retirement, either through downsizing to a smaller property or through dubious transactions like reverse mortgages. Between 1997 and 2006, housing prices increased an average of 83 percent, leading more people to assume their equity would see them through their retirement years.

In the last year, however, house prices in the U.S. are down on average 14.1 percent. Worse yet, some people say that the house price declines have just started. A few analysts are predicting that house prices will go down for 5 to 7 years straight. Think this can't happen? You are fooling yourself. Remember how financial analysts claimed that real estate prices could never go down in Japan, particularly Tokyo. When Japan had their recession hit in the 1990s, real estate prices in Tokyo declined for 10 years straight.

So much for houses as investments for retirement. Again, houses are consumer products and not investments. If you are buying a house on the hope that it will go up, you are speculating. If you are speculating, you should be prepared for the price to go down instead of up. Don't blame anyone else when your house price goes down. You caused this situation to happen by believing what the shady real estate agents and mortgage lenders have told you.

If you want to be financially well-prepared for retirement, invest in yourself by spending as much money as you can on books, seminars, and motivational tapes on how to run your own business or how to make money on the Internet. This is for certain: The most valuable asset is actually your ability to earn an income. I know that if I was to lose all my financial net worth that I have today, I can still survive financially. I can earn a living without having to get a job and still have a great retirement.

The same applies to you. Your marketable job skills and knowledge represent your personal earning power. Although the banks and other financial institutions don't count intangibles such as creativity, innovative character, risk-taking ability, and specialized knowledge in tallying your net worth, you should. These items are much more important to a retirement portfolio than a house.

Note the retirement quote by Financial planner Robert Doyle comes from the E-book:

The 237 Best Things Ever Said about Retirement by Ernie J. Zelinski

Download the Free E-book The 237 Best Things Ever Said about Retirement by Ernie J. Zelinski at:

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