With life stretching out in front of me like an unending road, financial advice and opportunity seemed like it would always be there. In my twenties, I had chances to make choices that would pay handsomely in the future. Unfortunately, my wisdom left me, and those chances fell by the side of the road. In the middle of my third decade of life, a friend of a family member offered me a house for $8,500 in 1975.
I passed on a house that was the price of a family car.
The house had a lot of character. It had hidden stairways and odd shaped rooms. The basement was not perfect because it was an older home in the middle of St. Louis. It was sound structurally and had enough room for my wife and me. The location was acceptable in an area that was not in obvious decline.
Besides the price, the deal was nice, too.
The owner was willing to accept a small down payment and carry the note privately. He even offered low interest and payments. With the money in the bank for the down payment, all that was left was to say yes. But, I did not. The thought of a long-term payment (it was only 10 years) scared me off.
In the meantime, a family member bought a house in a lesser neighborhood.
Since he bought it from someone in his wife's family, he got a steal. It was a declining neighborhood, and the house cost $6,000. I thought he was making a bad decision until he sold it 15 years later for $72,000 pretty much the way he bought it.
A friend bought a more contemporary house a year or so later in the suburbs.
The cost was higher, but it was only $27,500. I remember thinking how hard it must have been to sign a 30 year mortgage on that amount of money. Another line of thinking emerged when he sold the house two years later for almost $50,000.
It took almost 30 years before I was able to buy a house.
All houses went from an average price of around $17,000 to $20,000 dollars to over $40,000 and later over $60,000. The price of houses outstripped my earning power as my family grew and became more expensive. People around me, who took the plunge early, were able to buy and sell houses and move up to better and better residences. When I finally bought a house, it was in need of major repair and still cost me plenty.
Buying a house would have made a positive impact on my family finances.
Had I purchased that first house, it is very likely, that my investment in that property could have doubled or more before I moved. The housing market around St. Louis was pretty hot over the next decade or so. I could have entered the fray and perhaps have increased my net worth significantly over a short period of time with real estate.
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