Should I Buy An Investment Property Or Go On A Holiday? (Ep100)
I was on Twitter the other day simply talking to some people about property. If you want more information on the tweeter marketing that I do then just check out episode 79 by going to OnProperty.com.au/79.
I was on tweeter talking to people about investments, I was just finding people who were talking about property, just giving some encouragement and there was someone on there who was asking the question “should I buy an investment property or go on a holiday?”
And I thought that is a great question to ask and I bet that there are a lot of people out there who are wondering whether they should buy an investment property or whether they should go on a holiday? It’s not an easy decision to make so I wanted to create a video again with some ideas to help you make this decision.
So should you buy an investment property or go on a holiday? Go either on local holiday or go overseas? Definitely a good question to ask.
Studies have Shown That Choosing Experiences Over Things Makes You Happier
The studies have shown that when choosing between items and experiences, experience adds to our long-term happiness more than items do. These studies that have been done in psychological studies show that whether if you want to buy a car or you want to go on a holiday almost always going on a holiday will make you happier as a person.
And one of the reasons for that is that overtime our memory changes from short-term to long-term memory and the longer that it has been, the more we remove the negative experiences from our memory and we just remember the positive experiences.
So if you go back and try and remember a holiday that you went on that you really enjoyed I bet you would struggle to find out to remember bad things about that holiday. That’s just that most of our minds work is that we remember the good stuff and overtime we tend to delete that bad things.
I’m just thinking now, me and my wife had this horrible holiday when we went to New Zealand and I remember it was horrible but I can’t remember anything specific about that holiday that was horrible. Everything that I looked back on, the cold nights in a wicked camper van and all of that sort of stuff now just seems like a great experience.
And so I can’t remember negatives as well. So, that’s proof in the putting that it actually happened. That’s something to consider, the fact that when we choose experiences over stuff it is going to lead to our long-term happiness.
Think About Delayed Gratification
But obviously you need to think about delayed gratification as well. Because, maybe you take this holiday now and don’t buy a property but that means financially in the future you’re going to be more financially stressed, you are going to have to work harder because you took the opportunity now rather than having delayed gratification and choosing to invest in your portfolio first so that could then have fun holidays in the future.
Why Not Do Both?
And that leads me to a question that I want to get you to ask yourself which is what I talked about in the last episode which is whether you should buy property or have a baby and that is, why not do both? We can find ways to do both.
And I get this idea from Robert Kiyosaki who is the author of ‘Rich dad, poor dad’ and his Rich Dad banned him from saying ‘I can’t’ or ‘I can’t afford it’ and he said “do not say that to yourself, do not say I can’t afford it, don’t say to yourself I can’t afford to do both, say how can I afford to do both.”
And maybe the reality is that you can’t do both right now in the time frame that you want to but you might be able to find a way to do both within a reasonable time frame.
Purchase A Property That Pays Itself Or Use Equity To Fund Your Trip
Maybe you could purchase a property that pays for itself and that funds your trip. So maybe you invest in a positive cash flow property which I love to talk about.
One that spins off extra cash flow, maybe that extra cash flow could be used to go towards paying for your holiday or maybe you could purchase a property and do a renovation or purchase a property below market value so you’ve got instant equity. And maybe you could access that in 12 months time or whatever time frame and then you something that equity for personal reasons to go on holiday.
So this is a couple ideas or ways that you could do both. But great question to ask which should you do. There is obviously benefits to going on a holiday and that experience is going to make you happier over the long term but then there’s also the benefit of getting your own property and starting a portfolio because, as it grows in value and you continue to invest, those properties may be able to find future adventures and overseas travel and maybe instead of backpacking you can go around in five star luxury.