Success in an unfair world
Making your house become a strong financial tool, not a burden
I remember back in 1970, working people with just one job could afford to buy a nice home and a car. That person could have a family and a few of the luxuries of life while still being able to have one parent stay home to raise the children. The average sized house cost around $25,000. An average sedan cost around $3,000. The average baby delivery, free of complications, cost around $500. Life was manageable with one average income. Minimum wage was $2.00 per hour.
Let’s dash ahead 36 years later to the modern day. Here we are in 2006 and the world is an incredible and wonderful place for certain. But amidst the financial successes of so many, remains a class of less fortunate people that is ever widening. Common people are playing the game of life using old-fashioned methods for managing money taught to them by their parents. In the industrial era, hard working people with integrity could get by with one income.
Now, in the information era, that same type of home now costs around $200,000. An average sedan now costs around $30,000, and a baby delivery, free of complications, costs around $8,000. The real kicker is that minimum wage has only risen to an average of $5.15 per hour.
So, the cost of homes has increased to around 900 percent it’s cost from 1970. The cost of a new car has increased to around 1,000 percent, and the cost of a baby delivery has increased to a staggering 1,500 percent. Minimum wage however has only risen by about 275 percent.
The ratio of income to expenses is no longer manageable with one income. Usually both individual’s work and children are raised in daycares or school. This isn’t anyone’s fault, but it is everyone’s problem.
Ten years ago, I was a low-income wage earner. My wife and I really wanted to buy our own home, but we got turned down every place we went to ask for a loan because of our low income. It was then that I learned from my friend that homes have a high price tag only when contractors build them. He told me his story about building his own house by himself and saving almost two-thirds the cost of the home.
After following his advice, my wife and I were able to scrape enough money together to start the foundation and make the walls and roof. Every paycheck we would buy building materials and do our own work on the house. We reached the point where our home was far enough along to have enough value to get a construction loan to finish it.
In the end, all the materials for our home cost us only $60,000, yet the home appraised for $140,000.
We figure that in the long run over thirty years, the difference of financing a contractor built home, compared to only financing the materials at ten percent interest will save us around $240,000 in finance charges.
We have low monthly payments and we moved into our home with over fifty percent equity in it. That’s a point that takes most homeowners close to twenty years of mortgage payments to reach.
Building our own home has given us more financial options to help face an unfair world. We have been able to use the equity to start a business and get an education. It has turned our home into our biggest financial tool instead of our worst financial burden.
This doesn’t work exactly perfect for everybody though. There are a few areas where the homeowners can’t do their own work. In these cases they can always do their own general contracting and save around thirty percent the cost of the home. This is where the owners are in charge of finding sub-contractors like Electricians and Plumbers to do the work. It’s still a good savings.
Now, after helping several people do the same thing we did, I realize that most of us only need a gentle push in the right direction to be really successful. Most of the time, they only need to know how to build their own homes and then it all falls into place. I love helping people reach their goals of building a nice home, especially when they otherwise had no chance of getting ahead in life.
Larry Angell www.make-my-own-house.com
About the Author
In the midst of his struggles as a low income wage earner, Larry Angell learned how to build a home with very little money. His methods have become popular and he has helped many people reach their dreams to become homeowners when they otherwise would have had no chance.
Tell others about
this page:
Comments? Questions? Email Here