Q. I've tried to get opinions from different people on this question and all the opinions differ. I have a home and 80 acres in the country. Recently, I inherited another 240 acres adjoining my property. Everything I have is paid for. When the housing market picks back up again, I think I would like to sell and move to the city (maybe Dallas).
Then I would rent an apartment, or condo, for the rest of my life (I am 58 now). I get so many pros and cons on the renting thing— but my pro is no property taxes, no maintenance, no yard work, no upkeep, etc. The only con I can think of is that at the end of my life I'll have spent thousands of dollars on something that isn't mine. Actually, I'm wondering if that matters.
I'm widowed, have no children, siblings, nieces, or nephews, and I have no close relatives or anyone except a charity to leave my money and things to.
I think I have enough money to last my lifetime, but who knows? Will I wake up years from now and wish I'd put money into a home to sell, so that I can pick out a nice nursing home? This is a dilemma for me because I like the renting idea. I wonder why most people don't rent. I see a lot of people out here in the country who suffer hardships just to live in the country. It doesn't make any sense to me. I know all about the peace and quiet argument— but I have to drive 24 miles for a gallon of milk and tank of gas. What’s your perspective on the rent vs. buy question? —B.H., Dallas, TX
A. Most people don’t think the way you’re thinking today, but I believe more will be thinking your way tomorrow. One reason more will be thinking your way is that home equity is the largest single item in the net worth of most households. Indeed, you really need to be flat-out rich before personal real estate is only a small part of the pie. As a consequence, most retirees discover that the largest single lever on their retirement standard of living is where they live, and whether they rent or own.
Most people buy a house because they want more space for raising their children. They want outdoor space and they want indoor space. They get that by buying a house. Most rental apartments are relatively small. Apartments with more than two bedrooms are hard to find. Owning a house is important for young families, but it is optional for single people, empty nesters, retired couples and widows. Some will be like you and prefer the ease and convenience of renting. Others will prefer the space and individuality of home ownership.
Q. My husband is a very conservative investor (CDs and bonds are his style). But last night he asked me to read an article touting gold and uranium investing, with the intent to persuade me to begin buying gold (specifically, gold coins).
I am more of a risk taker. I am also the financial manager in our home. I am not sold on buying gold, but want to thoroughly vet his request. Your thoughts on buying gold coins? —M.C., by email from Austin, TX
A. There are brief periods when gold is a good speculation, but it is never a good "investment." Gold is never a good investment because an investment is something that produces an income return. A bond or CD produces interest payments. A stock produces rising earnings and dividends. A real estate investment produces rental income. Something is in motion and changing.
Gold is a reflex investment. You buy it because of things that are happening to something else, like money or global peace. You buy it betting that the world is in a rapidly moving hand-basket.
Does that mean you should never own gold coins? No. It only means you should limit it to an "insurance" position, not more than 5 or 10 percent of your financial assets.