All-Pro Advisors

Excited to announce the launch of our Financial Planning Packages for Newlyweds!

After meeting with 288 prospective clients over the past three years, a common trend from our millennial and Gen Z clients was that they were seeking direction when getting married and buying homes.

According to the US Census Bureau, the average age at first marriage is between 28 and 30 years old. Higher education, career aspirations, and a hint of YOLO are keeping people busier in their 20s than their parents. What that means, is that by the time the “big day” comes, the bride probably doesn’t come with a dowry, but more than likely an income higher than their future spouse, expensive travel habits, and a Venmo trail as long as the yellow brick road.

Most families stick to talking about politics around the holiday dinner table and avoid the money talk at all costs...and if they do, they likely won't tell you about the Target card balance.

That leaves you to Instagram, TikTok and Dave Ramsey for best practice advice on managing your day to day household finances together. Although we generally love Dave's MO, his blanket advice can be somewhat extreme. This service is designed to be an affordable introduction to the value of working with a Certified Financial Planner™.

https://www.all-proadvisors.com/planningpackages

Financial Planning Packages Affordable financial planning packages designed for specific life events that young professionals encounter. Starting with newlyweds and homebuyers.

I don't envy my first time home buying clients right now. Many are looking forward to upgrading from renting to owning but are continuing to lose bidding wars due to low inventory, overpriced houses, and high interest rates.

All situations are different but I wanted to throw out some facts on why it is ok to be a renter in the current market. Here is an example of buying a $450k house with a 20% down payment ($90k down, $15k closing costs and $360k loan).

Monthly payment is $3,326 which includes PA local property tax (Allegheny county average). Many think that this is a good way to build wealth (and in many cases it is), but take a quick look at these numbers.

$2,412 in monthly interest + $600 in property tax + homeowners (vs renters) $50 premium = $3,062. Of your total payment of $3,326...$3,062 is going to your bank, your local government, and your insurance agent.

If you think you might be in your home for 5 years or less...it might make sense to find a comparable home to rent. All real estate markets are different, but it is possible to overpay for a home. 8% interest rates are designed to make house prices decrease.

Imagine selling your starter home in 5 years for what you bought it for...you have to pay realtor fees, transfer tax and parts of the closing costs (added up to 7% conservatively). You walk away with about $76k after paying off your mortgage...when you paid $105k for your down payment (+ closing costs) and made about $17,500 in principal payments. This doesn't include excess cost of home maintenance.

Opportunity cost of owning vs renting = $105k invested in a 5 year CD (5% YTM) = $134,009 ... which puts you ahead by about $58,000 if you paid $3,326 per month for rent over the next 5 years.

Real estate on average increases by about 4% annualized over long periods of time. There are periods of time with no (or negative) price appreciation and shorter periods of time increase your risk of that occurring.

Can't predict the future, but you can learn from the past. Happy Monday!