The Two Houses on Pleasantville Avenue | Series 8.5

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Welcome to the Enjoy More 30s Family Finance

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podcast. The only podcast dedicated to making life more

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enjoyable for young families by hitting on the financial topics

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that tend to weigh on us, stress us out, and distract our focus

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from simply enjoying life.

Joseph Okaly: 00:00:16

Hello, and welcome back to the Enjoy More 30s

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Family Finance podcast. Our series this time around is

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called The Financial Parables of Your Life. So each week, I'm

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coming out and talking to you about what may be a story you've

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probably heard before, but maybe a somewhat altered version of

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the story. Because stories are just an easier way to remember

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things that are really important, whether it be

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information about our family or finances. So as always, before I

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begin, please share and like please leave reviews. I'd love

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to reach and help as many young families out there just like you.

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So today please join me for our story, The Two Houses on

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Pleasantville Avenue. Identical twins Johnny and Jimmy Smith had

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just sold their parent's home and received an equal share.

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They were both about to move into identical houses on

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Pleasantville Avenue, having both obtained identical jobs at

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a factory just down the road. Johnny said to his brother,

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"Isn't it fortunate we received just enough to buy our houses?"

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Jimmy replied, "Well, I decided not to buy my home outright."

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"Not buy your home outright? Ha! You must enjoy paying interest

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for no reason. You always were the fool between us." As his

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brother was clearly not looking for much of a discussion on the

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matter, Jimmy simply replied, "You may be right. So we will

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see." Some time passed and the factory was unexpectedly shut

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down. Johnny and Jimmy both lost their jobs. "What are we going

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to do?" shouted Johnny, "we can't buy any food, we can't pay

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our taxes, we're going to have to sell our homes!" Jimmy

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replied, "Well, I'm not going to have to sell for some time since

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I only put a small amount down, I still have plenty leftover to

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buy food and pay my taxes. In fact, the extra that I invested

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has actually done quite well."

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Most people out there make their decisions based upon the things

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that they've learned up to this point in time in their lives.

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Other ways you can make different types of decisions,

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though, would be by learning something new. Now, there's a

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lot to be said about creating a flexible situation financially.

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Paying off your mortgage was taught to us as a positive going

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back to the Great Depression kind of mentality. For most

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people though their home is one of their biggest if not the

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biggest asset that they have. And when you have a home that's

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paid off, that's a lot of money that you can no longer touch.

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Taking out a mortgage, which is obviously not wanted to begin

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with in a situation where somebody tried to pay off their

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house, and it's not even a possibility if you've lost your

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job, or selling the home are the only ways of accessing the money

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a mortgage or selling it. That's

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it. So there's a lot to be said for then keeping assets outside

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of the home. Maybe Jimmy from the story would eventually have

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to sell his home but he would not be put into a forced duress

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situation like his brother Johnny was. And depending on

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mortgage rates at any specific time, the last few decades have

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shown historically low interest rates, so funds invested outside

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the home may have the opportunity to grow much more

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than the interest rate being paid out on the mortgage,

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especially if it's a tax deductible interest charge for

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your situation. So I'm not saying this will 100% make sense

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across the board for everyone but it also never hurts to maybe

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learn something new.

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So thanks for tuning in today and join us for next week's

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story, The Crow and The Pitcher. I hope you enjoyed today's

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story. Please remember to review and share for others. And if you

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need any help, don't hesitate in reaching out. I probably have

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helped someone just like you. Until next week. Thanks for

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joining me today and I look forward to connecting with you

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again soon.

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The conversations on this show are

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Joe's opinions and provided for general information purposes

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only. They do not constitute accounting, legal, tax, or other

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professional advice for your specific situation. You should

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always seek appropriate advice from a financial advisor,

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accountant, lawyer, or other professional before acting upon

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any content or information found here first. Joe is affiliated

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with New Horizons Wealth Management LLC, a branch office

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of TFS Securities, Inc., and TFS Advisory Services an SEC

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Registered Investment Advisor, Member FINRA/SIPC.