Why Young People Shouldn’t Rush to Buy Homes, According to Simon Squibb

In a recent LinkedIn post, Simon Squibb challenges the conventional wisdom that homeownership is the ultimate financial goal for young people. Squibb, an entrepreneur and investor, argues that the pursuit of buying a house, particularly with a mortgage, can be a significant impediment to wealth creation and personal growth.

Squibb begins by addressing the societal pressure to buy property, suggesting that the dream is often sold without a full understanding of the realities involved. He states:

“Buying a property is essentially buying yourself debt. When you get a mortgage, the bank still owns the house. If you miss a few payments, they can take it away. They become your boss. You work for them in order to pay them back.”

This perspective frames a mortgage not as an asset, but as a form of servitude, where the buyer’s financial freedom is surrendered to the lender. Squibb contrasts this with his own experience, noting that he purchased his home outright at age 45 without any bank involvement, and prior to that, he rented.

The Hidden Costs of Homeownership

Squibb elaborates on the broader implications of tying oneself to a mortgage, extending beyond just financial debt. He contends that the commitment to a mortgage often necessitates a “stable” job and restricts geographical mobility, which can stifle opportunities for career advancement and personal development.

According to Squibb, the flexibility afforded by renting allowed him to relocate for opportunities, a path he believes would have been blocked by the obligations of homeownership. He highlights:

“Without that flexibility, I would have stayed in England. I would have had to get a “stable” job to ensure I paid off the mortgage. I would have never got rich and would have had to give up on my dream.”

In Squibb’s view, the perceived value of owning a house is often overstated when compared to the immense value of opportunities, time, and experiences that can be gained through greater flexibility.

Prioritizing Income and Investment

The entrepreneur suggests an alternative strategy for young individuals considering homeownership. Instead of rushing into a mortgage, Squibb advises focusing on building income first, investing in oneself, and maintaining the freedom to move as opportunities arise.

He elaborates on this approach:

“If you can’t buy a house outright, but are thinking of getting a mortgage. Build your income first. Invest in yourself. Move freely. And when you eventually buy, buy it outright.”

Squibb’s core message is that investing in oneself and maintaining flexibility are far superior investments than acquiring property through debt. He concludes by reiterating that owning a house is not as paramount as societal narratives suggest, and that personal growth and financial independence should take precedence.