AT SOME POINT IN LIFE YOU
MAY REALIZE, YOU HAVE TOO MUCH
STUFF.
MAYBE TOO MUCH SPACE
TONIGHT WE WILL GET ADVICE
ON WHEN AND HOW TO DOWNSIZE,
OUR MONEY EXPERT DUSTIN SMITH
FROM THE WEALTH ENHANCEMENT
GROUP JOINS US VIA SKYPE.
GOOD TO SEE YOU.
THANK YOU.
LET'S TALK ABOUT SOME OF THE
FACTORS THAT GO INTO THIS.
MY IN-LAWS ARE RIGHT IN THAT
PHASE OF LIFE WHERE THEY HAVE
BEEN TALKING ABOUT DOWNSIZING.
BUT ACTUALLY DOING IT IS MAYBE
MORE CHALLENGING THAN YOU THINK
ABOUT ON PAPER ANYWAY.
FOR SURE.
PEOPLE'S HOUSING NEEDS CHANGE
OVER TIME RIGHT?
WHEN PEOPLE ARE IN THEIR 30s
AND 40s THEY WANT THE SPACE.
THE KIDS ARE AT HOME, THEY WANT
A PLACE FOR THEM TO RUN AND A
PLACE FOR THEIR STUFF.
BUT WHEN PEOPLE BECOME EMPTY-
NESTERS THEY START STANDING
AROUND IN THESE BIG ANTI-HOMES
GOING, WHY DO I HAVE ALL THE
SPACE?
THE KNEE-JERK REACTION IS THEY
WANT TO DOWNSIZE.
THAT MAY BE THE APPROPRIATE
THING TO DO BUT I TELL PEOPLE
TO PUSH THE PAUSE, THINK ABOUT
THEIR SITUATION.
MAYBE THEY MAY END UP WANTING
TO TAKE CARE OF THEIR FUTURE
GRANDCHILDREN, AS PART OF A
DAYCARE ROUTINE TO HELP THEIR
KIDS.
MAYBE THEY WANT THE SPACE FOR
LARGE FAMILY GATHERINGS.
SO ON AND SO FORTH.
DOWNSIZING MAY BE APPROPRIATE
BUT IT MAY NOT BE RIGHT AWAY.
YOU ALSO HAVE TO REALIZE,
MOVING COSTS MONEY.
FOR SURE.
I THINK WE ALWAYS OVERESTIMATE
HOW MUCH WE MIGHT GET FOR OUR
HOMES.
WE UNDERESTIMATE THE COST OF
MOVING FREIGHT?
OFTEN WE WILL SEE THE HOUSE
THAT SELLS ACROSS THE STREET
AND WE GO OH MY GOSH THEY GOT
THAT MUCH?
BUT WE HAVE A NICER KITCHEN SO
I'M SURE WE WILL GET AN EXTRA
$20-$30,000 MORE THAN THEY
WHAT.
AND THEN WE FORGET ABOUT THE
COSTS, REALTOR EXPENSES,
CLOSING COSTS.
A NEW MORTGAGE EXPENSE.
AND ALSO MOVING EXPENSES.
FOR EXAMPLE, IF YOU WANTED TO
MOVE TO FLORIDA, YOU MIGHT END
UP FIVE TO $10,000 JUST MOVING
YOUR OWN STUFF DOWN THERE.
IT COULD BE QUITE EXPENSIVE.
THE OTHER FACTOR IS MOST
PEOPLE IN A POSITION TO LOOK AT
DOWNSIZING, A LOT OF THOSE
FOLKS FRANKLY PAID OFF THEIR
HOME.
TO GO FROM NO MORTGAGE, THE
OTHER THING THAT HAPPENS, I'M
SURE YOU SEE IT WITH YOUR
CLIENTS.
MAYBE YOU ARE HAPPY WITH THE
$300,000 HOUSE YOU BOUGHT 30
YEARS AGO.
AND NOW, YOUR TASTE AND SUCH,
YOU ARE IN THE $600,000,
$700,000 AND YOU THINK, HOW DO
I MAKE THIS WORK?
IT IS CHALLENGING TO MAKE THE
NUMBERS WORK, RIGHT?
FOR SURE.
SOMETIMES DOWNSIZING DOESN'T
ALWAYS TRANSLATE TO BEING LESS
EXPENSIVE RIGHT?
PEOPLE MIGHT SAY, I WILL
DOWNSIZE, TO MAYBE A TOWNHOME,
IN A COMMUNITY OF SOME SORT.
BUT THEY FORGET ABOUT THE COST
OF THE HOMEOWNERS ASSOCIATION
COSTS.
THAT CAN BE QUITE EXPENSIVE.
AS YOU ARE SAYING, WHEN YOU
LIVE IN A HOUSE THAT IS PAID
FOR, THAT CAN BE PRETTY NICE
AND KEEP YOUR EXPENSES LOW.
ALSO THE DISCUSSION OF, DO
YOU RENT OR BUY?
WHEN YOU MAKE THAT DOWNSIZING
DECISION.
I OFTEN RECOMMEND THAT
PEOPLE CONSIDER RENTING RIGHT
AWAY.
ESPECIALLY IF THEY ARE LOOKING
TO MOVE TO LOCATIONS THEY DO
NOT KNOW.
OFTEN WHAT WE WILL HEAR IS
PEOPLE SAY, I WANT TO MOVE DOWN
TO FLORIDA BECAUSE IT IS
WARMER.
WELL, WHERE EXACTLY IN FLORIDA,
IT IS A PRETTY BIG STATE RIGHT?
THERE ARE LOTS OF POCKETS.
RENTING CAN BE THE BEST THING
TO DO AT FIRST, TO UNDERSTAND
THE AREA.
ONCE AGAIN THE COST OF MOVING
AND BUYING A HOME IS SO
EXPENSIVE RIGHT AWAY.
RENTING CAN NARROW IT DOWN