Help me thru a Dilemma - live in GREAT place, or live financially free on the cheap?

[jasonwisdom]

Hi,

I am having a bit of a crossroads dilemma, and I am reaching out for support and advice.

2 years ago, I moved to New York City and one of my top reasons for moving here was to focus on my entrepreneurial ambitions.
By the end of this month, September 2009, my apartment lease will end, AND my main client project will end.

Which means... I'm at a bit of a crossroads!

During the last 7 years, I've saved up a decent bit of cash - more than I've ever had before!!

Come October 1st, I am considering two paths:
Option 1) use this cash as a down payment on a nice studio condo in the Financial District of NYC. There is a place I have in mind, and it is SWEET. It would easily be the nicest place I lived.

Option 2) use this cash to buy an income-generating investment vehicle. Minimize my expenses, move into modest digs (a spare bedroom of my friend's house - still clean, safe, and not far from Manhattan), and I am very nearly "passive income financially free" as defined by Robert Kiyosaki's Cash Flow game.

1) is a dream, and 2) is very close to another dream.
I want to live in a beautiful place, and real estate that I own.
I also want, as one of my life's very top goals, to "have enough money so I never have to work again a day in my life."

Here are some pros&cons of each:
In Favor of Option 1):
- It's a NICE place. The energetic vibe would be as close to top-notch as I could get without having a full-floor penthouse suite.
- I could have friends over, parties at my house, etc.
- It is presentable to women (thinking both single life & LT girlfriend). Whereas if I live in some spare bedroom of a share, girls are going to say, "Shouldn't you have your OWN place?!"
- Real Estate in Manhattan's FiDi is SO cheap right now!! Buying a condo could have some serious appreciation value, if I stay there 3-5 years.
- A friend wants to start an events business using my space.. if I don't move here, the biz opportunity will be gone.
- I am good enough at what I do (freelance Database Administration & Business Analysis), that I'm not too concerned about being able to fund the mortgage.
- Owning Real Estate is the ultimate inflation hedge... and if/when all this government "greenback emissions" causes another round of double-digit inflation, I will be covered.
- If the investment vehicle I have in mind, for Option 2), collapses (unlikely but still), I won't lose my shirt.
- I'll be living in Manhattan, in my favorite area the FiDi. (If I go cheap, I'll have to be a long bus or train ride away)
- The vibe & location may just inspire me to create something bigger & greater.

In Favor of Option 2):
- After mortgage, utilities, building common charges & property taxes, I'll be paying about $3,100 per month - !! (Compared with $650/month after utils at my friend's house!)
- If I put my money into income-yielding investments...I will be so close to "financially free" I can taste it. (easily there within 1 year)
- I can do "mini retirements" a la Tim Ferriss. I can relax and breathe!!
- I'll be free to travel for work - if a company in L.A. wants me onsite for 3 months, I can do that & just bill them the extra $650 per month to cover my NYC rent.
- If I don't take on the big mortgage of Option 1) above, I wouldn't HAVE to do corporate DBA and Biz Analysis work in NYC for the next 3-5 years. This is work I don't LOVE - it's okay, I even LIKE it at times....it doesn't ignite my passions and make every day a pleasure to wake up to.
- Option 1) would basically force me to work work work, squeezing in as much overtime as I can, in a field that I don't LOVE.
- Time. I could work very little (I could work none after putting my nose to the grindstone for 1 more year), and have LOTS of time to do whatever I want.
- If I don't have to work for money.. I could do anything. I could spend all day at the library studying demographics for a new info product idea I have. I could work as a friggin bartender 2 nights per week just to save up for that 1-week cruise I've wanted to take.
- My life would not be super-upscale posh with this move. But it would free me to be able to do whatever I want.
- If opportunities come up, in other parts of the world... Las Vegas, Shanghai, etc., I will be available to take them if I am living on the cheap. If I have a $3000/month mortgage, I will not be free to take them.




I realize this is a good problem to have...I also, years ago, designed my life so I would have these kinds of "good problems". I still seek out guidance, for I want my life to allow the very highest options possible.

Any thoughts??

Much gratitude,
Jason

[Craig Wanderer]

Hey Jason,

Congrats on the cool dilemma

I'm not you but if it were me, I'd take door number 2 and plug into option number 1 at a later date.

You're gonna get there eventually so why not take advantage of the passive income opportunity that has presented itself? Kiyosaki is totally correct... passive income is the best kind. It gives you more options.

Just something to ponder, but I'm sure you'll make the decision that is right for you.

Cheers,

Craig

[Brutha]

- Option 1) would basically force me to work work work, squeezing in as much overtime as I can, in a field that I don't LOVE.

Does that sound like a fullfiling life?

[Dimond]

I always say choose the option that will make you happiest whenever possible. It's always good to meditate/pray and use your intuition for decision-making.

[jasonwisdom]

Thanks all for the sugg's.

I was just telling a friend this today - it took me well over the usual 4 years to graduate college, because I hated the academic learning environment. Force me to read Emily Dickinson or Henry David Thoreau and I'll thoreau-up.
When I finally graduated (with something like a 2.01 GPA), I relaxed, let out a big breath and thought to myself, "NOW I can start learning!!"
And I've been absolutely inhaling knowledge & experience ever since.

It's the same with making money. I "hate" having to go to a job. It just doesn't vibe with me.
I have said, so many times, that I can't wait to no longer have to work, because then I can start making money!
I do enjoy consulting, but when I have a big expense attached to my bottom line... like when I had credit card debt, a big monthly rent or maybe soon a mortgage, it starts to feel like I have a job & must make ends meet first, then enjoy myself second.

On the other hand, one friend (who is encouraging me to buy) said I'm just having first-time-buyer jitters, it's natural and everybody feels that way.
There is also the argument that living in a nice place will "up my game" and I'll end up earning so much more than I would be earning, if I were living on the cheap.


Craig - I'm definitely considering Door #2. I may even be leaning toward it. Haven't made a decision yet.

Brutha - yes you quoted the one line about which I feel the most charge. The question is, does this line represent the crying out of my heart, revealing my true calling, or is it just me being a crybaby?

Dimond - Yes, intuition, prayer and meditation are all useful. I will certainly be meditating on this during the next week...


I am getting the sense that it is from this point of sitting on the fence, that right now I am deciding the future of my life. Of course, we all hear "you are the creator of your life" - usually applied to something that happened in the past. I have the rare luxury of recognizing that I am sitting at the fork in the road - complete with beachchair and pina colada - and I can lounge here for at least a few more days!

It may sound glamerous. But at this moment, as I type this, my adrenaline is really pumping overtime.

[Ekb]

Well I suppose if you want to learn more, we often learn more from the harder option. So which seems more difficult to you?

[skinnyninja]

I vote for the passive income route.

Debt is slavery.

Having to work is slavery.

The goal for me is time freedom + reasonable accommodations in life. Nothing lavish. But no day job required either....

[jasonwisdom]

Originally Posted by Ekb

Well I suppose if you want to learn more, we often learn more from the harder option. So which seems more difficult to you?

The living bare-minimums would definitely push me out of my comfort zone.
I have ideas for making (non-by-the-hour) income.
My challenge is not coming up with ideas, or even turning ideas into production-quality reality.
My challenge is marketing those ideas and profiting from them.

The "work work work" option is harder in the long-term...it's what I know how to do and again it often feels very creatively unfulfilling - my creativity is at the mercy of corporate middle-management....and we all know how that goes.

[jasonwisdom]

Originally Posted by skinnyninja

I vote for the passive income route.

Debt is slavery.

Having to work is slavery.

The goal for me is time freedom + reasonable accommodations in life. Nothing lavish. But no day job required either....

Thank you for weighing in.
The only difference is that I do like "nice things" - I used to drive a BMW, etc.
I got rid of most of them.. there are 3 things I spend money on - food, health (supplements, bodywork, etc), and education.
Well, 4 actually if you count investments.

Giving up these 4 things (which I'd need to do if I want to be as close as possible to passive income financially free) is going to be difficult.

[Brutha]

Brutha - yes you quoted the one line about which I feel the most charge. The question is, does this line represent the crying out of my heart, revealing my true calling, or is it just me being a crybaby?

You know what's this place is about?
Steve doesn't happen to write articles about "how to take up a mortage to be forced to work at a job that you don't like" but on "10 reasons not to have a job".

[jasonwisdom]

Originally Posted by Brutha

You know what's this place is about?
Steve doesn't happen to write articles about "how to take up a mortage to be forced to work at a job that you don't like" but on "10 reasons not to have a job".

Yes I was looking for the "how to rise up to meet your new mortgage" blog post, and was unable to find it.

Over the last 24 hours, I have read through the
10 Reasons You Should Never Get a Job
Living Paycheck to Paycheck
Love Your Work or Don’t Work at All
What Do You Need To Feel Secure?
...and at least a dozen other posts. And that's just on this site.


Okay. To be complete, here are the reasons FOR making this purchase:
- What the broker is saying, that if I hesitate, the opportunity will be gone, Manhattan FiDi prices are going to go up, and I'll have missed my chance to get in while prices were low.
- I really should have a place of my own. Living with roommates...while it's cheaper, I really am sick of it. I could tolerate my 2 friends who offered me their 3rd bedroom, and for the money it's a great place. However, their financial mindset is nowhere near where I want my finances to be.
- I like living in Manhattan. It's convenient, there's a low commute time for me to get to my clients & appointments.
- If I were to rent a place of my own, I'd still be locked in (just 1 year instead of 3-5 years), would save on the down payment but would miss out on any appreciation if it happens.

[Sam kovacs]

I'd say go for it, buy it since you can.

And if over the years you don't like it that way, sell the condo in a few years and make profit since the prices will go up.


You look like you are wanting to go in this direction so just do it. And don't look back, once you make a decision. Look forwards.

[Rae of Light]

Couldn't you buy the apartment, and then rent it out shortly, while moving into your friends apartmen and let the condo pay for itself? That way in a way you can have your cake and eat it to. And eventually u will be in that condo maybe after 6-12 months?

[jasonwisdom]

Hi all,
I have just about let the apartment go.
The "catalyst", the sign from God, was that my main client suddenly ended my contract and so I don't have the income I would need to support the mortgage.

However... The key factor is that I don't LOVE the place. I do love the building... and the place is definitely "not bad". And....it isn't a place I LOVE.

If I loved it, I would buy it and just the energy rush would push me to new heights. I do believe in such things...
I'm not going to be "financially free"...although I could probably go for the next 6 months and not work a single billable hour.

Now I'm facing the agony of what to do with free time.
I'm not gloating - this is seriously a challenge. I wasted 8+ hours last night, staying up until 9:30am, on STUPID stuff.


(btw I thought of the buying & renting it out...at today's rental rates I'd be looking at a -$800 per month cash flow - and that's not counting vacancy rates or mortgage insurance!)