I don’t know much about the world of finance. The fact that I consider musical comedy my actual career offers ample evidence that I’m not just saying that. My name is Daniel Friedman, not Milton Friedman. And yes, that’s a Jewish surname, and yes, the fact that I’m Jewish and a musical comedian, as opposed to a Nobel-prize winning economist, or at least a lawyer or a doctor, is even more reason not to take me too seriously when I start talking economics.
But this is a finance related blog, so as much as I want to waffle on about my predictions for Game of Thrones season 5, I need to make an effort to stick to the topic.
They say you should write about what you know, and I just bought my first house, so, here’s some advice.
DISCLAIMER: Like I said, I’m a singing comedian. Take this advice with a pinch of kosher salt.
1. Renting is underrated
People will tell you all sorts of things about why renting is wrong. ‘You are throwing your money away,‘ they will tell you. ‘It’s stupid’. But what they won’t tell you and, having experienced both buying and renting a home, I can verify, is that there are some serious perks to renting.
Sure, shell out a few thousand rand a month to help some other guy pay his bond. But we live in a world full of danger, and if you’re renting somewhere and someone drives a car through your wall, or the roof decides to cave in for no apparent reason, or the toilet spontaneously explodes, do you know who’s going to fit the bill? That other guy, the same one who feels superior over you because you’re helping pay off his bond. Renting means that all the most difficult aspects of maintaining a home are not your problem. It’s a carefree existence perfect for those who like avoiding responsibilities, and avoiding responsibilities is one of a musical comedian’s favourite things…
2. Don’t quit your day job
You know how everyone dreams of quitting their 9 to 5 and going off on their own to become, just as a hypothetical example, someone who makes his living by singing comical songs? Maybe you manage to go for your dream, and maybe you even win hypothetical awards and appear on hypothetical television and just maybe your hypothetical mother finally concedes that it’s ok that you didn’t study law as a back-up plan.
But even if everyone, even your success-loving mother, is impressed that you have managed to follow your dream, there are people that do not find the notion of managing to succeed at what you love comforting at all, and these people work at banks. For some reason, and if you know what it is, please let me know, the banks would trust you more if you were making half the amount of money, but with a regular paycheck. Never mind the fact that people in permanent positions could get fired or retrenched at any time, especially if, like me, they possess only one worldly talent, which is writing parody songs.
If you are a freelancer, an entertainer or someone whose life follows a different trajectory from the 9 to 5 lifestyle in any way, get ready to beg and plead for a bond. Get ready to jump through more hoops than you have ever jumped through in your life, unless of course the reason why you are struggling to get a homeloan in the first place is that you ran off and joined the circus.
But getting that bond is not impossible, and after tons of hard work, you get the email or phone call you’ve dreamed about. Congratulations! You are a homeowner. Or are you?
3. Homeowners don’t own their homes
The term homeowner sure sounds pretty, and it may even impress your friends; you know, the ones who are renting and don’t realise how lucky they are. But the truth is that you have a new landlord now: the bank. And while it isn’t going to come over to your house and fix your leaking faucets, it will get more than a little upset if it stops receiving your monthly payments.
But, on the bright side, it is the only landlord who will eventually turn around, after years of receiving your ‘rent’, and say, ‘it’s all yours buddy’. For now, I’m a bit more of a home-loaner than a homeowner. But I’m on my way, and for a singing comedian, that’s no small miracle.