Chapter 1: The Decline of Ownership

“You will own nothing and be happy.” This slogan from the World Economic Forum in 2016 is increasingly reflecting our current reality. The trend of renting homes is on the rise, car financing is gaining traction, and debt levels are escalating. Collectively, our ownership is diminishing, and this is a concerning trend.

Why Is Ownership Vanishing?

Reflecting on the world half a century ago, it's clear that while many aspects of life have improved, the average person's situation hasn’t necessarily followed suit.

Fifty years ago, acquiring a new home or vehicle required purchasing it outright. Back then, personal belongings were a direct indicator of wealth and living standards because they were the only options available.

Today, however, with the advent of credit, financing, and monthly payment plans, individuals can "own" items they couldn't have afforded in previous decades. Access to credit enables people to:

• Reside in pricier homes.
• Drive more luxurious vehicles.
• Enjoy an upscale lifestyle.

The trade-off for this enhanced lifestyle? A decrease in ownership.

Initially, this doesn't seem too negative; in fact, it may appear advantageous. But is it truly worth sacrificing ownership for improved living standards? For me, the answer is no.

What Should Be Your Priority?

For instance, I could visit a BMW dealership today and drive away with a new M Sport on finance for just a few hundred pounds monthly. However, I choose not to.

Why? Because I adhere to a different principle than many of my peers. I don't seek the most appealing option available at the moment; rather, I focus on what makes the most financial sense.

And does financing that car make sense? Absolutely not. Committing to a 60-month contract at £500 per month for a vehicle that will lose half its value in three years and will never be owned outright is a poor decision.

Yet many seem more concerned with appearing affluent in a brand-new car, perpetuating this cycle of sacrificing ownership for lifestyle.

Instead, my vehicle is:

• A few years old but still feels new when driving.
• Fully paid for, allowing me the freedom to use it as I wish.
• Not subject to rapid depreciation like a new car.

It's still a respectable vehicle, and I often receive compliments about it.

Ownership vs. Living Standards

Am I sacrificing my living standards for ownership? Not at all. The only difference is that I recognize the significance of owning assets and how they contribute to my:

• Net worth.
• Financial stability.
• Mental well-being.

I have less financial anxiety because I possess assets, while others worry more as they accumulate liabilities.

Is it truly worthwhile to drive a car that, under normal circumstances, would be out of reach? For me, it’s not.

Three Reasons to Value Ownership

1. Enhanced Net Worth

While net worth isn't the sole measure of life’s value, it remains a crucial indicator of personal success and retirement readiness. Ownership contributes to net worth by increasing disposable income, whereas lack of ownership leads to longer work lives.

2. Reduced Financial Anxiety

Knowing that my vehicle has a value of £30k provides peace of mind. In emergencies, I could sell it for cash. Owning major items like your home and car serves as an extension of your emergency fund, significantly reducing financial stress.

3. Greater Flexibility & Control

Financing a vehicle or renting a property may be more accessible, but this convenience often comes at the cost of control. For example, many financing agreements impose mileage restrictions, which can be quite limiting.

In most cases, people finance cars to drive models that are beyond their means. Renting poses challenges, too, especially for those struggling to qualify for a mortgage. However, whenever ownership is an option, I strongly advocate for it.

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Chapter 2: The Reality of Wealth-Building Today

The first video, "It's Over: Homes Won't Make You Rich in 2024," discusses the shifting dynamics of wealth accumulation in today's housing market, emphasizing the challenges faced by individuals seeking financial stability.

The second video, "The Time to Build Wealth for Millennials has RUN OUT," explores the urgency for millennials to adapt their financial strategies in light of current economic realities.