From: "John A. Weeks III" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Down payment strategy
Date: 25 Oct 2004 21:20:01 GMT
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In article <1gm7u7s.h39er9b8higtN%michael@bcect.com>, Michael Sullivan
 wrote:

> If that is the situation, and purchasing a home looks like the right
> idea for other reasons, why not try to reduce the spending on your house
> *now*, rather than 2-3 years from now when they've built up the
> necessary 20%. 

It is too bad that the original poster did not give any info on
the type of houses that they were looking at.  While you could
certainly be right, and they might be buying a home that costs
less per month than their current rent, I got the impression from
the tone of the message that they were trying to buy something
way over their head, and were looking for someone to help them
justify something that they knew in their heart was wrong.

BTW, this was a great example of someone who cannot afford to
have an "emergency fund" sitting around.  They have $15K in
credit card debt that explodes at the end of the month, and
$15K sitting around earning just about zippo.  They cannot
afford a luxury like that, rather, they have to maximize how
their money works.  Once someone gets out of debt and has a
good chunk of equity in their home, then they can afford an
emergency fund.  Until then, they would be better off paying
off the cards, trying to avoid emegencies, and if one happens,
borrow back from a credit card or get a short term loan from
an IRA or 401K.  If worse comes to worse, and they use this
credit, they then have to work like the devil to pay it back
and not make this new debt permanent.

-john-

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John A. Weeks III            952-432-2708         john@johnweeks.com
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