My friend and I were tossing this question around and I am wondering what you all might say. She has two preteens and has never owned a home. She has the opportunity over the next several years to travel extensively with her kids OR buy a home. Financially, she can't do both. Her children want a home (9 & 12) and she would like them to have a more global experience and buy a home when they leave the nest. I vote for travel, she's leaning towards buying a home.
Obviously she'll decide what's right for her...but I want to know what you would choose in today's economy is owning a home or giving your children a global experience a better investment if given the choice between the two?
I think children need stability and a home would help provide that.
It's great that she wants to travel and expose them to educational experiences but they are pretty young and need a home.
Where are they living now?
I think she should consider the temperment of the kids. Its true that there is some value in the "global experience" idea, but only if the kids have the right temperment for that kind of thing. Moving around can be really rough for kids trying to fit in and make friends. Some kids would thrive on the travel, but others would be a mess.
Now is a great time to purchase a home, but not such a great time to travel overseas, monetarily speaking. If I were your friend, I would put my money into a home - travel is great(and could always be done at a later date), but having the stability of a home during the formative years of middle school and beyond is also very important. I tend to side with the kids on this one.
Own a home! There is research about the positive effect of home ownership on children. "Homeownership has been linked with higher
levels of academic achievement, better health, and fewer
problematic behaviors in children.Studies have found that children
of homeowners have higher test scores and graduation rates than
children of renters."
i would love to travel if it was a perfect world, too - but what happens when her working years are over? does she have the finances to retire? will she have a place to live? mostly i think it's a red flag that "she" would like to give them the travel experience, but they really want a stable home. they should get a vote. sure it's exciting and metropolitan and "cool" to travel...but they're telling her what they want. the only reason i have seen to travel, that you give, is that "she" wants it. that would seal the deal for me. you have to weigh the pros and cons, and the reasons in favor of each.
I would do what my kids felt stable with, otherwise I wouldnt be able to enjoy myself anyways.
kids are still young. I would say own a home first and travel once/twice a year whenever possible.
I know that if my husband and I had that choice, we would 100% pick the travel! We travel a lot with our kids now, but it gets complicated with school obligations and work schedules. I would love to homeschool and travel the world with the kids.
Well, I think she really should consider the wishes of her children. What about a smaller home and some summer travel?
My first reaction was to type travel BUT assuming that she will at miminum get the money she puts into her home out years later and maybe in these crazy economical times a little bit more, I would have to say house.
In the end of her travels, she has nothing but wonderful memories (which are great and educational but.....), if she has a house, (assuming our world doesn't go haywire) she will still have the house and the potential for money in the future.
Hmmm good question.
I love traveling, and would love to show my child(ren) the world.
I also know that no matter how old I get, I will always have my parents house to call home. They are both passed but the home remains. It's more then just a house.
Well, we bought our first home last year. =)
BUT.....i'll work my knuckles to the bone to give her the world, so that just means i'll (my SO too) will have to work extremely hard to enable us to travel. So I'll take option C...BOTH! ;)
What kind of income does the friend have? Did she come into money from inheritance? Does she have college paid for for two? These are some starting points.
Where in the world was she planning on going and for how long? Does she know how much it will cost for three people traveling and staying in hotels and such? This does add up quickly and that does not mean you can get a job in a foreign country very quickly to cover odd expenses.
The only way I know of doing something like this is to be in the military and get stationed overseas and then travel from a base or post. Otherwise it is very difficult. The ages of the children come into play because they will not always understand what they did or did not see in the country.
It may be a glamorous dream but the reality has to sink in. Owning a home is another one of those things as long as you don't over buy. So right now it would be wiser to stay in the US and buy a home. Then plan a goal for the future of going world wide when it is safe to travel.
The other S.
Owning a home is the better investment right now. You can always take a trip later. I took my kids to London 3 years ago for 400 bucks a piece. It was the trip of a lifetime. I am glad my kids got to experience it, but I wouldn't forego stability right now for years of traveling, which is a luxury that would seem imprudent during a world wide deflation/infation.
Having your own home is stability for you and your children. Kids need stability. Inflation is upon us, (if you look at the price of gold, and how it is skyrocketing- you can gauge the Dollar's DEVALUATION on it. Gold has risen 30% in the last year, which means your dollar has lost 30% of its purchasing power..in just one year. No... it is not that food prices are going up- it is that your dollar is being devalued and buying less.
The 'estimated' inflation for this year based on the consumer price index is a half percent rise- EVERY MONTH, and by the end of the year, a full one percent rise every month and climbing quickly and more aggressively thereafter.
If history repeats itself, like it is known to always do, then all we need to do to see America's economic future is to look at what happened in Weimar Germany in the early 20's. They also had leadership that ran the printing presses and printed money to get them out of debt, just as Obama has done. The money circulating in Germany in 1915 was FIVE TIMES more money than in 1913. Most people don't understand that putting more money into circulation devalues it. By 1919 food in Vienna was up 4 x it's cost. People were starting to barter for food. In Germany, food was 200x as much as it was in 1913. By 1920, the increase of money in circulation was up 50% and the German bill- the Mark, only had 1/40th of its purchasing power left. By the time December hit, the cost of living had rose 12 times. Food was 3/4 of a families income. Going by when the money printing first started, 1920 Germany is equivalent to the year 2013 in America. In two years, you can potentially see 3/4 of your income going to food costs! Food riots, murdering of politicians, and the closing of the stock exchange also occured so that people would not see the effects that the governments policies were having. Foreign exchange rates weren't published.
Would you be able to afford that if you are renting at a higher price than you would be if you were in a fixed mortgage/your own home?
Fast forward to 1922 Germany(which is equivalent to 2015 for The USA) HYPERinflation hit, the consumer price index was at 700%, in April, butter was 50 Marks and 6 months later it was 800 marks!! A year later a wheelbarrow of Marks was needed to buy a loaf of bread.
Not sure if our monetary policies are equivalent? If you look at the charts, our money in circulation did a sharp almost 100% vertical push upwards in 2007. In early 2008, we printed another 150 billion dollars. Interest rates dropped, and feds printed another 850 billion. March 13th, there was another series of printings, 200 billion worth. The dollar hit a 3 year low against the yen.
By early 2009, the bailout printings added up to more $$ than the 1930 depression bailout, Korean war, Iraq War, and the 1980 S and L crisis bailout COMBINED. March 19th, they printed 1.2 TRILLION to buy bank debt. By May, feds doubled the monetary base from 6 months earlier.
Mask of inflation by selling off gold. By July the consumer price index is 208% (that is a 208% inflation since 1982.) By the fall, the central bank buys our own debt (bonds)- 553 billion. A total of 23 trillion bailout.
Feds buy 1.2 trillion of securities issued by Freddie and Fannie. (add to recent purchase of $542.8 billion. At this point, toward the end of 2009. 400 more banks had failed and the dollar was worth TWENTY FIVE PERCENT LESS than when bush took office. But that is nothing because it takes from 2-4 years for the effects of money printing (inflation) to hit the economy after it is printed. I stopped doing my research in Jan 2010. I dont even know how much money printing has occured since then but I can bet it hasn't let up.
I hope that people can keep this in mind when planning for the future. When the news says we are coming out of a recession, what they should be saying is that we are just entering a massive hyperinflationary period of several years and a food shortage that is GLOBAL in scale. Countries are currently falling like crazy and it isnt simply because they dont like their regimes that theyve lived under for 40 years. They have no jobs and are starving because they can't afford the high cost of food.
Gail
I vote for travel as long as they have a decent rental apartment. Memories are the one thing that last beyond this side of heaven. She will grow her children in culture and knowledge as well as have uninterrupted family time.
I think it depends on the family (how adaptable are the kids, etc.), where in the world they would go and what type of experiences and education the children would have. There are certainly places in the world right now I wouldn't feel comfortable taking children for safety reasons. My kids (11, 14) and husband are change adverse and we have a dog we love so world travel (except for vacations) would not be an option for us. We are in the process of multiple home improvement projects because we like to do things at home. I do have some relatives who recently made this decision and they chose world travel, or at least moving halfway around the world. The mom is not originally a U.S. citizen (Dad is) and giving her kids a "global experience" was very important to her. The kids are younger, 4 and 6. Another thing to keep in mind is what about extended family? My relatives' decision caused a lot of distress for the grandparents, aunts and uncles of those kids (FYI, I'm not one of the aunts or grandparents) because they were used to seeing them on a regular basis (sometimes weekly) and will now get to see them only a couple of times a year. One of the aunts in particular was their primary babysitter when the parents went out or went out of town and had a very close and special relationship with the kids. She was distraught when they moved. Another grandma had been their daycare provider when they were little and now gets to see them only via Skype. On the other hand, these kids are growing up multi-lingual, which may be a huge advantage to them in our ever changing world. Good luck to your friend.
Well, I'm almost to the end of my first year of home ownership. It did not involve travel, obviously, but I can definitely say it's been an adventure of it's own kind!
Owning a home; I would say travel.
Having that EXACT same decision 2 years ago, however, I bought my house ;).
However, I am honestly doing BOTH (owning a home and traveling). Nowhere near as much travel as I otherwise would... but there are amazing opportunities for very little money around and about. Same token, if it's possible to stay with people you know, that cuts the expense down considerably. As does renting a flat for x # of days instead of a hotel. I'm very much a "How CAN one have their cake and eat it, too?" kind of person... so I think it would depend on her opportunities.
Do Both! She can buy an affordable home and travel extensively during school breaks. It can be done, because that is my plan as well.
Her children's emotional needs should always be a priority and respected. World travel is an education in and of itself, but shouldn't be at the risk of her children's emotional development.
Travel can be affordable when planned in advanced. There are so many travel based websites that provide all the tools for family travel. I recommend www.TravelingMamas.com, It's a great source of information for a MaMa like your friend!
I would travel - but this isn't what the kids want. She needs to talk with the kids and explain her dreams to them - where she wants to go and what she wants them to experience in life.
It doesn't mean that she can't do both - seriously - has she considered buying a home and then taking an equity loan out to do the traveling - then she can compromise with the kids - give them the "stability" they are seeking and she can't get the experience she is wanting to give them.
I guess I need to understand if she's considering taking them out of school for two years and traveling around the world or if she's planning 3 full months of summer traveling and then a month in the winter....guess I need more information!!
