And worry I did.

After settlement, I was a wreck. Not normally rattled, I was bombarded with the idea that things needed to be fixed, improved, maintained. I had a hard time working because I would think about painting a room, or having the foundation checked, or…well the list went on. Such uncharacteristic behavior really made me wonder if I had made a huge mistake. Thankfully, after a few weeks, the worry subsided. This was my house and, come what may, I was going to do my best to make it a home. We made a lot of purchases in the first few weeks, but that has slowed down as well. I have a general list of what needs to be done, and we’re going to fix things as they come. It isn’t always perfect, but I’ve settled into home ownership, new responsibilities and all.

So, here are my thoughts, if you are considering buying a home in the near future:

Pros

• Ownership: Despite all of the finance posts you will read about being a slave to your mortgage, buying a home should not be treated as an investment. You are buying a home. A base of operations that allows you to mold the place into your image. As long as you plan properly and only buy a place you know you can readily afford, the financial aspects of purchasing should fall into place.
• Customization: When you rent, you have to get permission to do just about anything. When you own, you can do whatever you want with your new property. This opens up a lot of possibilities if you want to make adjustments, renovate rooms, etc. There’s a certain amount of fun to be derived from such projects, even as the process itself can be stressful.
• Light at the End of the Tunnel: When you have a mortgage, you also set an endpoint. If you rent, you will always need to pay someone for the space you live in. When you are working toward home home ownership, you know that somewhere down the line, you are going to live mortgage free. That is a very liberating thought, and certainly reinforces the idea of financial freedom. If your mortgage payment is modest, you can accelerate the payment of your loan, and the tunnel gets that much shorter.

Cons:

• Worry: Being responsible for your own property comes with a lot of upkeep. You have to mow the lawn, pay taxes on your land, make sure that all of the structural aspects of your home like electrical, plumbing, etc. are in tip top shape. Failure to do so can have serious financial consequences, and that can weigh on anyones mind, especially when you are first starting out.
• Mortgage: Paying a mortgage, simply put, isn’t fun. While you are working toward the end goal of owning your home outright, the bank will be bombarding you with interest in the interim. As far as I am concerned, the sooner you pay it off, the better.
• Other Costs: There is a certain element of randomness to owning a home in terms of the financial costs. Things may break that are completely out of your control, but will deal a significant blow to your bank account. These costs exist no matter how well you maintain your property, so owning adds a variable cost that can be hard to predict.

In terms of finance, the recent downfall of the U.S. stock market and, indeed, markets worldwide, has continued to shake the resolve of even the most stalwart investor. Everyone is convinced that they are willing to ride out the ups and downs of the market, right up until the realize just how far down those downs are capable of going. 600 point drops on the Dow are going to happen, especially in an age of economic uncertainty.  The solution, then, is rationally gauging how capable you are of handling risk, and adjusting your portfolio accordingly.

Going with a less aggressive portfolio composition shouldn’t be considered a sign of weakness or a weak stomach, but rather an honest evaluation of your tolerance for volatility. If you know that you are going to hit the panic button once the Dow drops off a cliff and sell at the worst possible moment, you can protect yourself by changing your investments to something that better fits you and stop you from havinf to make that decision in the first place. This will take adjustments of your savings rate as well, since less-risky investments offer a less attractive rate of return, so you will need to save more as a result.  As always, consult with your financial advisor before making any changes to your portfolio, or whoever you happen to confide with for financial advice (ie. not me).

So, now you can expect a post every Tuesday and Thursday! I’ll be back to focusing on personal finance stuff despite my recent swing to microbusinesses. Stay tuned!

There are some things I understand about the $700 billion dollar bailout plan. The financial markets were, in fact, in a state of total chaos. The government needed to do something that would assuage the general fear in the marketplace and provide some government support to a rapidly deteriorating market place. It would hurt to shell out $700 billion to companies that should never have gotten to overleveraged and taken on so much risk, but in a lot of ways it had to be done (this last point is arguable).

With that mind, however, I can’t help but wonder who is watching Uncle Sam’s tolerance for risk and spending. We’re shelling out hundreds of billions of dollars that will be tacked on to an ever increasing pile of debt. All told we’re staring at the bottom of a $53 trillion dollar hole.

So what’s next for Uncle Sam? There’s going to be some decisions to be made. In particular, we’re facing some tough love in the near future. It’s likely we’ll have to raise taxes, cut benefits like social security and medicare, or both. No one wants to do either one of these things, but that’s the reality we face.

I came across a great clip today that ties into how I’ve been feeling lately. I haven’t been a big proponent of the bailout, and in fact I’ve been giving my representatives a call to let them know I’d prefer they not pass the estimated $700 billion dollar package to bailout financial institutions, and I understand that could mean some serious pain in the short term as well. Regardless enjoy the clip (though I could do without the cut sequences in between the cartoon, I thought it spoke well on it’s own).