I like to think that I’m ‘immune’ to most luxuries in the world.
I don’t own a car, and I take either the bus or the subway practically everywhere I go. I use a 3-year-old Herschel backpack for almost all occasions. My iPhone 6 is 3 years old, and counting.
But the one thing that makes my heart flutter? Apartments.
Where I come from, land is scarce. Because of this scarcity, you pay through your nose for housing. A tiny studio apartment in the far-flung corners of the city would set you back $500K. “Tiny” meaning about 500 square feet, or 46.5 square metres. “Far-flung” meaning it’ll take you 2 hours to get to work by public transport. That means you’re looking at a 3-4 hour commute every single day.
A while ago, my girlfriend and I were eyeing an apartment. It was incredibly remote, and would take me at least an hour and a half to get to work. But it was one of the cheapest apartments we could find. It was a 2-bedroom, about 750 square feet, or 70 square metres.
The cost? About $800K. And that’s considered to be cheap.
The first issue was the downpayment. Our downpayment of 20% amounted to $160K. No small sum of money, but we knew we could do it.
At the time, we already had savings of around $60K or so. Which meant that we had only $100K to save. My girlfriend’s 5 years older than I am, so the plan was for her to save $60K, and for me to save $40K. Manageable.
We knew that we could afford the entire downpayment within a couple of years. Or maybe even less.
The Monthly Repayments
We needed a bank loan of $640K ($800K – $160K). The interest rate was 1.8% per annum at the time. A 25-year mortgage meant that our monthly repayment would be $2,651 a month.
‘That’s not bad!’, we told ourselves. The interest rate was at an all-time low, and the apartment was the cheapest 2-bedroom we could find. ‘What a steal!’
I was earning $2,800 a month. My girlfriend was earning $3,700 a month. Our combined monthly income was $6,500.
We did the math, and here’s what we would spend every month.
Maybe you’re thinking “hey, savings of $1,700 a month? That’s okay!”
But that’s for two people. Which means that we’re saving only $850 a month, per person. Far from ideal.
And what I listed above includes only monthly expenses.
What about property tax? Property insurance? Income tax? Travel expenses?
Essentially, we would have close to zero savings. All our net worth will be tied up in the apartment.
Sure, our paychecks were stable. But so were our expenses. Whatever money comes in, would flow right out.
But we were bright-eyed, and unrealistically optimistic. And we wanted that damn apartment.
So, the plan was to live paycheck to paycheck, at least for a while.
We told ourselves that things would get better as we slowly rose through the ranks, earning bonuses and increments.
We worked our butts off to save up as much as we could. Full-time job. Multiple side hustles. Living a simple lifestyle. And we made steady progress. Everything was going smoothly.
Until I Started Hating My Job.
I was never a big fan of my job, right from the very beginning. But I somehow convinced myself that I could do this for the next couple of decades, at least. I mean, it was an easy life. Work 9 hours a day, relax upon getting home. After a 5-day work week, you get to take the weekends off.
But as time went by, the resentment grew. Maybe it was the meaninglessness of the work. Maybe it was the complete inflexibility of the 9-to-5 routine. Maybe it was the time-consuming commutes. Maybe it was the endless bitching. Maybe it was the fact that you’re not allowed to disagree with your boss, even if you’re the one making more logical sense.
Maybe it was the belief that I was destined for greater things than to just sit at a desk.
I think it was everything put together. It takes a while for the small things to get to you. To wear you down. A few months in, and I was all worn out.
Not a day went by, that I didn’t think about quitting.
And it was excruciating, thinking about how I had to endure 25 more years just to service my entire mortgage.
I was incredibly stressed, wondering how I would be able to service my mortgage if I got fired. Or if I just quit. Money issues overwhelmed me, day after day, and turned my dreams into nightmares.
I eventually got to wondering – was this apartment even worth it? I was always stressed about money. The constant dread of picking up my feet and going to work wasn’t doing much to help my situation either.
Could I live this way, for the next 25 years?
Was this apartment worth the best years of my life?
Would I even be alive at the end of the 25 years to enjoy my freedom?
No, no, and I doubt that I would.
It took a couple of months for me to accept that my dream apartment was going to slip through my fingers. That I wouldn’t have a place to own and to call home. But I knew that it was better for my sanity this way.
Eventually, I let it go. I gave up my dream apartment.
And you know what? I never regretted it.
In fact, I’m so thankful that we didn’t have enough for the downpayment. That we needed some time to save up for it. That we hadn’t gone in and dumped a huge wad of $160K on the real estate agent’s desk. It was the fact we didn’t have enough money yet, which allowed us to escape the shackles of having an expensive mortgage to service for 25 years.
I’m grateful for that.
I still think about quitting my job, every single day. The only difference between now and back then, is that I only have a few more years on my timeline. I know I’ll be staying in my job till end-March 2019, at least. Because that’s when my company gives out bonuses. That’s only 7 months from now. After which, I could extend my stay to 1 more year. Or even 2-3 more years.
A lot more bearable than an excruciating 25-year wait.
Hell, I could even quit at the end of this year, which is what, 4 months away? By then, I’d have a six-figure nest egg to tide me over for years.
It’s truly liberating, this freedom.
And I know that this freedom is only afforded to me because I don’t have an expensive mortgage to service. Or any other extravagant responsibilities to tie me down, for that matter.
Would I want a fancy-ass apartment that requires me to stick it out at a job that I dislike for 25 years? Or would I rather have the freedom to quit and chase my dreams? Chase the passions that truly matter to me?
I think my answer is clear.
Freedom trumps everything else.
I don’t know yet when I’d quit. But one thing’s for sure – a few more years (at most) and I’ll hand in my resignation letter to chase my dreams all over the world.