Archived files for
Aren't Worth Much
copyright 1996 by Single Scene Newspaper
When single people die at eighty and have been single for some time, they seem to leave an estate of either a tremendous fortune, or very little at all - most often very little at all. More singles end up being supported by the country in their old age than marrieds.
Why? Because most long-time singles put their money in things over a lifetime that depreciated instead of things that appreciate.
Conversely, if they got the other habit early, they would amass a fortune.
When they are single, they think they may meet Mr. or Ms. Right next week so there is no need to buy a house or other property that would "tie them down." Result: they live in apartments and spend their money on cars and other things that depreciate.
An example would be a single who puts $5,000 down on a new car.
They pay out another $10,000 over three years in interest and payments and wind up in ten years with something worth $1,000. The car depreciates and becomes worthless.
A married couple at the same time put down $5,000 on a house. In ten years that $50,000 house could be worth 75,000. They owe $40,000 at this point, have paid no more total payments on the house than Mr. Single paid average rent for his apartment (remember, his rent has gone up every year for ten years; their payment has stayed nearly the same). His $5,000 original down payment plus his $10,000 in payments has become $1,000. Their $5,000 down payment has become $35,000 equity in a house they can readily convert to cash anytime.
Mr. Single has a misfortune and has no cash value or reserve to borrow or fall back on. They do.
Had Mr. and Mrs. Married Couple bought a trailer house with their $5,000 down, it would also be down to little in value after ten years. Trailers depreciate in value (go down), usually, and houses appreciate (go up in value) as time passes.
Singles need to own and get involved in property and things that appreciate in value. Spend less on things that become worthless over time.
If you kept the house after your divorce, though maybe a little more difficult initially, it will get easier and easier as inflation goes up but the house payment rises only very slightly. Your $50,000 house again rises in value in ten years to $75,000. This, along with your former $5,000 equity and paying down on your mortgage for ten years, will give you an improvement in your net worth. Your net worth increases primarily through owning property, not beating your brains out on your job.
1. Keeping or owning a house ties down and keeps your housing expense from going up as fast as inflation. (My four bedroom Scottsdale house payment is under $300 a month.)
2. Interest is deductible from your income tax, and the majority of your house payment is interest. You get credit on your income tax now; you get to keep more of your income.
3. Your net worth increases yearly with no additional effort on your part.
Singles are freer to move about and have less tendency to take roots by buying property. With inflation, you should keep the house and latch on to any other real property you can that is self-supporting through rental, etc.