Personal Finance & Money Asked by user4884 on September 25, 2021
I live in Pakistan, have worked hard to save for a car but I have realized I have bigger financial troubles to deal with than just buying a car.
I live in my parent’s house and I need to buy my own house ASAP in like 3-4 years. I can live without a car.
Should I invest my money in a car or in a plot of land? The plot of land definitely is going to give better results in long term.
Your question has an interesting mix of issues. ASAP and 3-4 years doesn't feel like the same thing. ASAP results in bad decisions made in haste. Four years of living very frugally can create a nice down payment on a house.
A car is only an investment for Uber drivers and those who are directly financially benefitting from a car's use. For everyone else, it's a necessary expense.
What I'd focus on is the decision of buying a plot of land. Unless this is a very common way to do it in your country, I don't recommend that order. Having land and then trying to finance the building of a house has far more complexity than most people need in their lives. In my opinion, the better way is to save the 20% down, and buy a new or existing home you can afford.
In the end, spending is a matter of priority. If you truly want to get out in the least time, I'd save every dime I can and start looking for a house that your income can support.
Correct answer by JTP - Apologise to Monica on September 25, 2021
“The plot of land definitely is going to give better results in long term.”
Will it? Land is not guaranteed to go up in value. And a car can provide more employment opportunities for you.
You need to look at your specific situation—with specific numbers—rather than using rules of thumb as hard guidelines.
Answered by Grade 'Eh' Bacon on September 25, 2021
I think that it's a good idea to buy a land plot rather the car coz we can slowly save more money that we be able to build our own house. If we have car and no house to put it in, it's such the headache matter. We can live without car but we cannot live without a house. Thank you.
Answered by Ousa Chhoeu on September 25, 2021
In a comment you wrote:
land prices are rising at very high speed here. People usually buy plots and sell them afterwords for a profit
This sounds like there might be an investment bubble which is about to burst. If it bursts while you are holding land, then you have a huge problem. Signs which point that there is a bubble:
If you notice that anything like that happens, then there is very likely a real estate bubble in your region. If it bursts while you own a plot of land, you are going to lose a lot of money. If you need a place to live in such a situation, then it is usually smarter to pay rent for now and buy a home after the crash.
On the other hand, it is also possible that the reason why real estate prices are raising in your region is because there are actually many people who want to move there. When your region is experiencing an economic boom in other sectors than real estate, and there is reason to believe that this economic growth is sustainable for a few decades, then it might be a smart move to buy land as early as possible.
Answered by Philipp on September 25, 2021
I think it depends on the current situation. Suppose you have no any alternative of getting money, i.e. a job en then buy a plot. How will you build in it? Contrary, if a car presents your face value, and it can put food food on table, then buying a car fits, because it can fetch money as well and a plot is bought to.
Answered by Felix on September 25, 2021
Here's how to choose -
Buy the land!
There's just no contest.
Land is an asset
Land makes you rich
A car is a complete waste of money
A car makes you poor
There is nothing, at all, good about buying a car. The day after you buy it, you will have 100 expenses. Forget the car idea.
Answered by Fattie on September 25, 2021
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