Is your investment portfolio similar to this?
Have you ever heard of the saying "Don't put all your eggs in one basket" I'm sure you have! Today I'm thinking of it in terms of your overall investment portfolio. Previous to real estate I was in banking and financial services. If I made the statement that "real estate is a good investment" I think most people would agree with me that most of the time it is. However what would you say if I told you that I can recall 3 times in my own experience where it wasn't. When was the last time you heard a real estate agent say that! All 3 times were before my days as an agent. The point I wanted to make though is that real estate like any other investment can have its risks. In the booming market we are currently enjoying in Markham I've been getting more concerned about people I see who are more than willing as I said earlier to put all their investment eggs in the real estate basket. A neighbour of mine who is a mortgage broker told a story of how a young couple came to him to get qualified to buy their first home. They had been out looking and wanted to buy a home that was over $600,000 and they had 5% as a downpayment. My neighbour asked them if they realized that the mortgage payments would be about $3,000 a month and they were shocked. Even if there downpayment was bigger if you're spending more than about 30 to 35% of your gross income on mortgage payments it's too much! Putting a roof over your head is only one area of financial planning and your plan should include more than just buying a house. What about having money to live on? Put groceries on the table, pay the utilities, maybe buy some furniture and some real blinds instead of the paper home depot version. What about saving for your kids education? What about retiring some day? If you don't create a retirement fund for yourself (most of us aren't lucky enough to have a corporate pension) what will you do at retirement? Will you sell your house to live? Where will you live? Do you want to become a renter at that point? If you don't have a financial plan and don't know where to start I can whole heartedly recommend my own financial advisor who I have been with for 10 years now. His name is Bill Bell and his company is Bell Financial and Bill can be reached toll free at 1-888-367-7450. You can also check out Bill's book "One Step to Wealth" at www.onesteptowealth.com . Bill helped to guide us through the latest meltdown in the markets and with a diversified portfolio we came out OK, thank you very much! Any comments or questions I can be reached at firstname.lastname@example.org.