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WISH FULFILLMENT

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									      WISH FULFILLMENT
      By Suze Orman
      If getting the house you long for requires the appearance of a fairy godmother, an inheritance
      from out of the blue, a winning lottery ticket, or stretching your finances to the point that the
dream is destined to become a nightmare, then you need to reshape your dreams. What good are they
if they have little chance of coming true or will lead you into a financial mess? The best are the kind we
can make a reality. And I'm here to tell you that you can make them happen—if you learn how to
dream the right dream, the one that makes sense for you. What I call practical dreaming.

It wasn't so long ago (okay, 33 years) that I graduated from living in a van—yes, yours truly once
called a Ford Econoline home—to renting an apartment. As great as that move was, I had bigger
ambitions. I wanted to own a home. But at the time, I was earning barely enough to cover my rent and
other basic living expenses. That's when my first practical dream came to me: I realized the only way
I'd be able to get a place was if I partnered with someone else. So I bought a house with a friend and
her mother. Well, to be accurate, all the money came from the mom—we just split the mortgage
payments with her—but it was a start. And it worked.

Practical Dreamer
So I bought a house with a friend and her mother…. A few years later, I focused on the next step in my
incremental dreams: still owning with my friend but minus her mom. With our share of the gain from the sale
of the first place, we were able to make the move—the new house was a modest 1,000 square feet, but as
far as I was concerned it was a palace. Sure, just a few blocks away were majestic dwellings with sweeping
views of the San Francisco Bay, but those were other people's dreams. People with a lot more money than I
had. I was thrilled with what I could afford.

Jump ahead to today, and even though I'm wealthier, I'm still a practical dreamer. I don't need some fantasy
mansion. I buy what I need, as opposed to what I can afford. That approach has never let me down, and I'm
certain it can work for you.

Be Realistic
Sure, it's fun to check out luscious magazine spreads, but don't base your housing dreams on someone
else's. If what you can swing is a $1,500 monthly mortgage, there's no point in setting your sights—for now,
anyway—on the $5 million Malibu beachfront property or the 10,000-square-foot Central Park penthouse.

Create a dream you can achieve, the next step that works for you. If you're renting a small studio, dream
about a condo of your own. If your family has grown and your house hasn't, dream about a place with one
more bedroom and a backyard big enough for the jungle gym your kids want.

Be Patient
Even the most clear-eyed dream takes money. And money is typically what keeps us from converting
dreams to reality. If you really want to change your housing situation, you need to commit to saving, and that
demands patience as well as discipline. Depending on your current financial situation and the scope of what
you want, saving enough for a down payment may take a few years.

But remember: Your dream starts coming true the minute you commit to socking away money. Every month
you put something aside, spending less in order to save more, puts you a month closer to the dream. One
benefit of the recent rise in interest rates is that your savings can earn more. Check out the deals offered by
online banks such as EmigrantDirect.com, where you can earn about 4.5 percent these days.

It's a matter of wanting the dream badly enough. Set aside $100 a week, earning 4 percent, and in three
years you'll have more than $16,000 toward a down payment.

Be Smart
Don't go in over your head all the while praying that conditions you can't control will adapt perfectly to your
needs. Your mortgage or renovation budget should not be based on the hope that at some vague, blissful
moment down the road you'll have a higher income so you can pay off a loan, or you'll be able to sell at a
huge profit because real estate values have soared.
There is simply no guarantee that's how things will work out. A scheme that requires holding your breath for
the financial planets to align in your favor can become a disaster.
Be Creative
Most of us want more space than we have. We hit the listings in pursuit of our bigger and better place. I say
slow down and take another look. How about dreaming of turning what you have into what you want—that
is, renovating rather than moving? It can make great financial sense. For instance, if you bought a house or
refinanced a mortgage in the past few years (and assuming you had a strong FICO score at the time), you're
probably paying about 5 percent on a fixed-rate mortgage.

Trading up now for a new home would push the interest rate on the loan to 6.5 percent. Add to that the
commission to the broker who sells the old place and the closing costs on the new one, and you're talking
serious outlay. And don't forget moving costs, or the fact that a more expensive house means higher
property taxes and insurance. Not so dreamy after all, eh?

So before you make the open-house rounds, sit down right where you are and consider what you have. Do
you really need a new house—or would the problem be solved by a beautifully redone bathroom or an extra
bedroom for guests? Renovating rather than relocating can be the smarter financial move, with one caveat:
Don't go too far beyond the neighborhood's basic level, upgrading to the point where you have a Taj Mahal
bursting its boundaries on a block of ranch-house subdivisions.

The rule still applies. Go for what you want, but don't go overboard. Find your practical dream.

								
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