This Part 5 of a 7 step series applying teachings from the famous book “The Richest Man in Babylon” to Bitcoin as a revolutionary savings technology.
The fifth principle in The Richest Man in Babylon encourages you to own your home, considering it an investment in your future.
This principle certainly is one that you could go either way on as a Bitcoiner, and instead of dogmatically defending it, this article will present the pros and cons from each side of the fence. Today government policy has make housing extraordinarily expensive in many areas with current Fiat Standard we are living under.
Lets take a look at this principle today.
The American Dream - Just a Dream in Many Locations
Since the end of the Great Recession, housing prices have steadily gone up - but you know that already.
The big question is will they ever come down?
Really, nobody knows - this has been an area highly manipulated by the government in the US, and we all know anytime there is a perceived “crisis”, the Fed and Washington are going to panic and draft new policy to “fix it”.
Additionally, the debt based fiat system we live under crumbles anytime the price of assets (stocks, bonds, real estate mainly) drops in any significant manner. Tax revenues plummet, and more printing must be done to keep the system chugging along.
This fact alone should make a Bitcoiner hesitant to jump into an overpriced market just to grab any old property.
With 3,500 Satoshis available for every dollar you can scrounge right now is the time for accumulation of as much Bitcoin as possible.
That said, if your all in housing costs aren’t that much different then renting, proceed with caution.
Home Ownership is Still a Good Investment in Other Areas
There are of course incredible benefits to owning your own place, especially if you have a family.
Your children have their own place to play. Your wife enjoys time in the garden. Your husband enjoys fixing things up in the garage. You have a workout room where you can get your routine done without having to spend time going back and forth to a gym.
The “happiness” factor that comes into play cannot really be measured in dollars, or Bitcoin.
Additionally, if you lock in at a decent rate or pay cash, your housing costs are basically fixed. This has been a huge advantage, especially for those who locked in mortgages under 3% a few years ago. Now they are set with a fixed rate in an inflationary environment where the value of their property keeps going up but the payment is the same. Its a debt jubilee of sorts, but only if you own your home.
Expect values of homes to match the inflation rate going forward, you aren’t going to increase your purchasing power, but you’ll keep up and have a place to live.
Careful Analysis - Buying Bitcoin or Home Ownership?
If you aren’t in a home of your own now, the dilemma on what to buy can be immobilizing.
It certainly can be disconcerting to see housing prices continue to rocket (in dollar terms) while you are renting.
One simple trick is to change your unit of account. Start tracking housing in Bitcoin prices, and of course buy Bitcoin every time you get paid. After stacking for two or three years, you should see how Bitcoin levels the playing field, housing prices continue to drop when denominated in Bitcoin.
This trick isn’t intuitive at first. All of us have been on the Dollar Standard for our whole lives, so the mental switch to a different currency takes some time.
In time with careful accumulation of your Bitcoin, you may then want to diversify a little of it into a home of your own, making thy dwelling a profitable investment.