Other than your house, can you sell, trade, or downsize any assets? Do you own cars, boats, jet skis, or expensive furniture? What about that no-longer-pursued stamp or coin collection? I recently talked with one of my readers who wanted to invest in properties but said she lacked cash.
"What would you recommend?" she asked. When I queried her about assets that she could draw on, she admitted that she and her husband owned a vacation property at Lake Tahoe with $150,000 of equity.
Do you see the problem here? All of us love our possessions. We don't want to give them up. But ask yourself whether those assets are truly worth the price you pay to own them. Several years back, I owned a Porsche 911. Obviously, that's a car that I
Nearly everyone owns assets that they could sell to raise investment cash.
loved to drive. But when I calculated my out-of-pocket costs of ownership plus the money I could earn by investing the cash that I had tied up in the car, the decision to sell became a no-brainer.
Your decision to sell wasteful assets becomes even more important when you're shelling out money for monthly payments. Possessions you finance not only eat up your cash, they also drag down your credit score and borrowing power. Get rid of those unnecessary assets now. The returns you earn over time will permit you to later replace them many times over. (Also, as I have noted, you may find that cutting back on your costly toys and material possessions actually leads you to a higher quality of life.)
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