Written by I.K Adusei
Covid 19 has affected many individual and organizational coffers globally. With its resultant effects on jobs losses, project delays and salary slashes, there still can be a glimmer of hope for people who want to own their dream homes.
The desire for one’s dream home cannot be sacrificed on the altar of this pandemic. Amid every chaos there is opportunity.
Here are some tips to owning your dream home today.
1. Prioritize your expenditure. In the middle of a global pandemic such as Covid 19, the first thing people would focus on would be their survival. However, people who will be preoccupied with survival will miss out on the numerous opportunities which this pandemic presents especially in the area of housing.
If you are property conscious, you will notice that this pandemic like others before it, will more likely predispose struggling property owners to sell off their properties for quick cash in order to improve their liquidity situation.
Banks are also more likely to foreclose on a number of properties in your area or a neighborhood you may prefer to live in.
Therefore, with a stable income and further advice from your bankers and attorneys, you can talk with your mortgage provider for a loan to purchase your dream home at a much better price.
You are certain to come across cheaper credit to purchase your dream property, and also financially constrained property owners willing to sell off their properties in order to shore up their liquidity situation in the middle of a pandemic than in any other time.
2. Set a budget. If you are burnt on owning your dream home, then you need to make ample financial allocation for its realization. A monthly direct financial allocation from your monthly salary or income will be recommended for such a purpose.
You need to setup a special savings account. You can code name it, ‘Dream Home Fund’ or something more appealing. For this purpose, you may decide to open a personal bank account or an electronic mobile money account to keep your savings.
Once you reach a specific amount, you will be able to leverage your money to make more money through prudent investment. The easiest way to mass up capital for your dream project is through consistent saving.
Rather than saving what you will have left after spending, spend what you have left after saving. This way you are sure to secure your financial future and thereby keep the goal of owning your dream home alive.
3. Invest your money. To own a dream home is a desire of almost every adult. However, a better predisposition to realizing this dream is taking action.
Saving money for a down payment or the purchase of a plot to build your dream home is a worthwhile activity. Investing your savings into a proven investment vehicle which promises a reasonable return on your principal overtime, will accelerate your dream home agenda.
There are several ways to invest your money. You are however advised to invest in investment products which you fully understand. The more complicated the investment type, the more likely it would not be for you. Once you are sure of how soon you can get back your money, the amount of return you will have on your investment over the period and the type of risk associated with the investment product, you are good to opt for that investment.
Every investment you make to grow your savings will involve some degree of risk. A higher risk will not always guarantee a higher return, so first invest in financial education before you invest your hard-earned money.
4. The power of compound interest. If you are in your 20’s or 30’s your best bet to owning your dream home in your early or late 40’s or 50’s is the power of compound interest.
Albert Einstein, the world-famous Physicist is credited to have said that, “The compounding effect of money is the eighth wonder of the world.”
Compound interest refers to the accumulation of interest on a principal amount over a given period. This comes about as a result of reinvesting both the earned interest and the initial principal sum repeatedly over time. The power of compound interest has been proven as the most potent tool for the rapid accumulation of capital for any future capital-intensive project.
The consistent compounding of your principal and interest in your chosen investment vehicle being it treasury bills, bonds or fixed deposits will be vital in the accumulation of funds to get you closer to owning your dream home.
5. Control your expenditure. Most people desire to spend more than they earn. However, if your desire is to own your dream home this year or in the near future, you need to cut down on your expenditure in order to create surplus.
This surplus when invested and compounded over time will provide you with a reliable income to start the construction of your dream apartment.
You can similarly use your accumulated surplus to purchase needed building materials like sand, stones, wood, nails, roofing sheet, iron rods etc.
By acquiring your building materials gradually, you build momentum and set your dream of owning your dream home in constant motion.
I.K Adusei is the author of the book, How To Start Small: Financial Skills For Business Success