- Don’t rush into hasty financial decisions—especially real estate and relocation—that can be hard to undo.
- Considering relocating or buying a second home? Spend a month or two living there as a resident, not a vacationer, before you buy.
- Review your cash flow, balance sheet, assets and taxes closely before making important decisions.
*** Don’t miss our free panel discussion about evaluating risk in today’s new economy on January 21.
My grandmother never drove a car. So after I would give her a ride someplace and drop her off, she’d say, “Thanks for the buggy ride!” I thought that was cute, but she also said something else that stuck with me whenever my siblings and I were behaving impetuously. “Now, Gary, remember: there’s always another streetcar.” Her point was to be patient and to avoid making hasty decisions that would eventually have to be undone.
I think of my grandmother’s advice whenever I’m facing a major life decision. Now, we’re in January in Chicago. It’s not fun here in the winter, and a lot of you might be thinking about going someplace warm for the wintertime—if not permanently. Now you’re talking about two households instead of one, and it’s really a three-step process:
- Review finances.
- Spend a month or two physically living in your desired location before you buy.
- Execute your plan, both from a financial standpoint and from a living standpoint.
Finances. This is all about your cash flow. And your cash flow is related to your balance sheet, your assets and your taxes. If you’re going to take on another residence, the general rule of thumb is to add about an extra $25,000 in expenses, this may vary greatly depending on the condo or single-family home you might purchase there. You really want to run the numbers to make sure you’re not making a decision that you’ll have to undo. Remember, real estate is illiquid. Meaning bad decisions aren’t that easy to undo.
Location. Once you decide on a location, live there for a month or two so you can get a sense of what it’s like to be a resident, not a vacationer. This will give you a much better sense of the people, resources, amenities and social life. Very important if you’re thinking of making this your sanctuary.
Execute your plan. Now that you’ve identified the geographic location where you want to live, it might take you one, two or even three “try out” residences before you feel like you’ve settled into the right home. Only then can you really execute your plan. If you live in Illinois, you might have to sell your home and buy a smaller home to make the finances work out. We’ve seen many clients go through this process the hard way because they bought the wrong place and had to redo everything.
Speaking of decisions, we’re hosting a free panel discussion on January 21 about evaluating risk in today’s new economy. It’s at the Wyndham in Glenview. Reservations are required and seating is limited. If you’re making, or thinking about making, an important life decision, you don’t want to miss this event.
To reserve your seat, call (800) 480-7913 or register here.
Until next time, enjoy. Gary
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