Unmarried Sisters in 30s, Realistic Advice for Home Ownership

A single woman in her 30s, living with her sister in a rented apartment, focused on increasing her salary and saving money, achieving 100 million won. However, after accumulating her target amount, she felt lost on how to grow her assets and expressed concerns about home ownership.

She is currently considering purchasing a villa but is worried about potential difficulties in selling it later. She believes she needs to buy an apartment around 800 million won, considering commuting and living environment.

The applicant is considering living with her parents in the future, as they do not own their home. Accordingly, she believes a house with three rooms and two bathrooms is necessary.

However, she expressed concern about housing plans due to a large discrepancy between her available assets of 100 million won and her desired house size.

The applicant's annual travel expenses are 4 million won, which constitutes a significant portion, equivalent to about one month's salary. In addition, she spent an extra 1 million won annually on gaming and performances.

The host meticulously analyzed the applicant's insurance premiums and other fixed living expenses, reviewing her overall financial status.

The host pointed out that it is realistically difficult to buy an 800 million won house with 100 million won in assets. While it might be possible to purchase using a credit loan, the high loan amount could lead to a heavy burden of maintenance.

The host suggested purchasing a house in the 400-500 million won range as a realistic alternative and emphasized the importance of not being overly ambitious with high-priced homes for the purpose of supporting others.

The host emphasized that while the desire to care for others is understandable, the actual ability to do so is a separate issue. He stated that one can only truly care for others when one's economic capabilities support it, otherwise, it is more rational for individuals to live independently.

He explained that choices for family support come with an economic cost, so it is crucial to objectively assess one's situation and plan accordingly.

The applicant stated that she would no longer travel after her already-paid-for Shanghai trip and planned to reduce unnecessary expenses. She admitted that travel spending increased due to a compensatory mindset after the COVID-19 pandemic, implying that this led to difficulties in financial management.

She expressed her intention to organize her financial items, including travel expenses, to manage her finances more efficiently in the future.

Builnam advised not to stop traveling altogether, but rather to cut other expenses to fund travel, while preventing additional spending. He emphasized the importance of reducing travel expenses, which amount to several million won annually.

He explained that it is crucial to adjust the frequency of travel, curb unnecessary additional expenses, and maintain the current savings rate.

Builnam strongly suggested that the applicant should cancel her whole life insurance, which she had been paying for over 10 years. He judged that a whole life insurance focused on death benefits was inefficient for her current situation.

He advised considering a strategy to reinvest the surrender value elsewhere to grow assets more efficiently.

Builnam pointed out that the applicant does not currently possess high enough economic power to support her parents. He emphasized that her own asset formation should be prioritized over supporting her parents, and that it is desirable for parents to live independently according to their economic circumstances.

He recommended clearly setting financial boundaries among family members and focusing on one's own asset formation.

Builnam advised that if sisters purchase a home together, it is more rational for one person to purchase it under their name rather than joint ownership. He explained that it would be better for the person who buys the house to register it in their own name and then receive a low rent from the sister to share living expenses.

He added that this method prevents the complexities of joint ownership and allows for efficient sharing of housing costs between siblings.

He added that school districts and the presence of entertainment facilities significantly affect residential satisfaction, so it is important to consider these when choosing a home.

This is because older apartments (guchuk) have higher liquidity and are easier to sell compared to villas.

Considering the balance between commuting convenience and asset protection, he recommended choosing an apartment near a subway station in a major city, even if it means some commuting inconvenience, especially in one's youth.

He emphasized that while direct walking access might not be easy, one could sufficiently use the GTX-A via local buses.

He stated that although Ilsan might have a lower apartment appreciation rate due to high supply, this is not a major issue for residential purposes. He added that a pleasant living environment is an advantage of Ilsan.

Builnam emphasized the importance of first securing residential stability through real estate. He advised resolving housing issues with an apartment in a good location, even if its investment value growth rate might be slightly lower and less preferred by family, before seeking other methods of asset growth.

He explained that stock investing provides psychological stability when done in a stable living environment and warned that focusing solely on stock investing without resolving housing issues could lead to forced selling risk in a declining market.

Therefore, he described a strategy of achieving residential stability first, then combining it with stock investing, which the applicant is currently doing, to grow assets as rational.

Builnam recommended that if the applicant has the possibility of getting married in the future, she should not buy a house right now. Instead, he advised consistently saving and investing primarily in stocks.

He explained that housing type and asset management strategy can vary significantly depending on marriage status, so even if one maintains a single lifestyle, it is necessary to adapt flexibly to changing circumstances.

He emphasized that keeping marriage possibilities open would be advantageous for securing cash assets and growing assets through stock investment, thereby expanding future options.

Builnam pointed out that the anxiety about not owning a home might not stem from an actual need for housing, but rather from relative deprivation felt by seeing others make money from homes. He stated that if the applicant could live in a gosiwon (small, inexpensive room) without issue, the essence of her anxiety lies in asset growth.

Therefore, he explained that it is sufficient if she can secure market average returns through other asset management, such as stocks, beyond what others earn from houses. He advised that purchasing a home would be more rational when a clear housing purpose, such as marriage, arises.

Builnam recommended index investing over individual stocks if one cannot achieve higher returns than the composite stock price index. He emphasized that diversified investment in various indices such as NASDAQ, S&P 500, and KOSPI, while focusing on one's main job, is effective for long-term asset growth.

He explained that index investing shows competitive returns even when compared to the average appreciation rate of Gyeonggi-do apartments, and it is an alternative that can reduce the risk of failure that can occur with individual stock investments.

Builnam proposed quickly organizing unnecessary fixed expenses, such as insurance premiums, which are sunk costs. He emphasized that reducing current and future expenses is much more important.

He also recommended switching to an affordable mobile plan to save on communication costs. He explained that switching to an affordable mobile plan allows for more leisure activities like attending performances or domestic travel with the saved money, thereby improving the quality of life.