UNCOMMON CENTS 46

HAPPINESS IS THE GOAL OF MORAL ACTION ACCORDING TO ARISTOTLE, BUT WHAT CONSTITUTES MORAL ACTION - OWNING A HOME OR RENTING AN APARTMENT WHERE NO EQUITY IS BUILT UP? WHAT ABOUT PAYING OFF A MORTGAGE EARLY BECAUSE YOU HAVE EXTRA MONEY? THE GOOD, IT SEEMS TO ME, RESIDES IN SAVING MONEY, EVIDENCE OF SELF-RELIANCE. CONSIDERED IN THE ATMOSPHERE OF MODERN UNDER SAVING, YOUR FINANCIAL RETURN IS GREATER IF YOU OWN YOUR HOME. IT IS ALSO GREATER IF YOU INVEST IN A RETIREMENT ACCOUNT LIKE A 401K (WITH EVEN A GREATER BENEFIT IF THE EMPLOYER MATCHES YOUR CONTRIBUTIONS) RATHER THAN PREPAY A MORTGAGE IN HOPES OF ELIMINATING IT EARLY. FURTHERMORE, IN LIEU OF A 401 K, YOU COULD CONTRIBUTE REGULARLY TO A STOCK INDEX FUND. SINCE YOUR ONLY MAJOR DEBT SHOULD BE YOUR RESIDENCE, ANY CHOICE YOU MAKE FOR INVESTMENT STILL RESTS ON THE SECURITY OF OWNING YOUR OWN HOME. THE REAL ESTATE INDUSTRY STIPULATES THAT YOUR MORTGAGE PAYMENT INCLUDING TAXES AND INSURANCE SHOULD NOT EXCEED 30% OF INCOME. ASSUMING NO EXTRANEOUS DEBT, BY DOING THE MATH A $60,000 A YR. INCOME ALLOWS FOR A MORTGAGE PAYMENT OF ABOUT $1666 A MONTH.

HINT: PRE-OWNED OR NEW HOME? LET YOUR BUDGET FOR SAVINGS BE YOUR GUIDE.