What would you do if you are faced with this dilemma?
Jack stays in a rented accomodation. Jacks longs to stay in a house of his own. However:
1. If he takes a home loan there is a danger that he might never invest enough for retirement due to the EMI. He has only considered houses very similar to or even lower in facilities than his rented accomodation. He has considerd all possibilities of loan durations etc.
2. If he chooses to stay on rent forever he will have to treat rent as an expense in retirement. If he does, the amount he needs to invest is way more than he can manage.
3. He has considered increase in investment due to income increase down the line.
4. He has considered taking a loan, closing it early and investing all he can later.
The problem remains:
Thats is even if the emi equals the rent and emi stops says 15 years from now, the probabilitiy of achieving the retirement corpus needed is low.
Of course possibilities like working longer etc. is possible. However Jack is 30. No one can predict if he can or cannot work 30 years from now.
What would you do?
Note: I am not Jack. I am considering making a rent vs. buy calculator. But no calculator will help solve this dilemma. Hence looking for opinions.