should i sell my stocks to buy a house

Should you ever sell your stocks to buy a house, or should you ever save for a house by investing your money into the market?

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1. If I sold my investment, what would that cost me
– Well that 260k investment, at 10% return over a 30 year period
– Turns into roughly 4.5M dollars
– So obviously it looks like its not a good choice

However:
– That’s 260k in a home is saving me money on rent or a mortgage
– So the mortgage on a house like that would be somewhere around $875 per month for the next 30 years ( and also the 20% down payment plus closing cost add up to $65,000)
– This means I can invest 875 a month / 10.5k a year ( which is 30 years at 10% return is around 1.8M
– Which makes it look like the wrong choice

Tip: this question is obviously a personal one
– And it depends on the type of person you are
– Because in 30 years a lot can happen, you can lose your job, you can not even be alive anymore ( term life insurance is extremely important)
– So if you care about security, buying a house for cash and restarting your investment is a good choice
– Or you can buy a house for 20% down, and keep investing, while you through all your extra money towards mortgage to finish faster

2. However ( this answer changes when we talk about retirement accounts )
– If you have a 401k account or Roth Ira or whatever you have
– Usually, these accounts have penalties and taxes on the gains
– So when It comes to those accounts it makes no sense to liquidate them

The way I see it is like this:
– My retirement account is for Tommy in the future
– My taxable account is a little more flexible ( but only under big circumstances )
– My overall goal is to invest and hold for the decades so no selling involved

3. What Exactly I’m I going to do
– I’m going to leave that 260k inside that account, and keep adding more and more money to it
– I’m also going to rent for a while, this way my cost stay lower temporarily because as we know renting is cheaper short term
– But while I rent, I’ll save up the money for a down payment and closing cost of the house ( so if those fees are 60k, I save for 5 years around $1000 per month )

Once I’m ready to buy the house:
– Well my investment has grown a lot more
– I can also pay extra towards the mortgage ( and finish in 3-7 years )
– But again It will be a household with 2 incomes, so that’s going to help a lot too

4. Never save for downpayment and closing cost with the stock market
– The money I save is going to be in a normal savings account
– Because in 5 years if the market crashes
– I don’t want to have to sell my investment at a discount to buy a house ( so although your money is not earning anything, it’s still a safer choice )

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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