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TSI #38: A simple strategy to save up for a house

Mar 19, 2023

Hello Stoic Investors,

Today I want to focus on something we all need. A place to live. 

Your home will probably be the biggest purchase of your life. So, let’s make sure you do it right.

But before we start, I want to point out one very important thing.

Most people get this wrong.

Your house is not an investment

You may be inclined to think that by buying a house or an apartment, you’re investing.

Well yes, if that property brings you money. Then you can call it an asset.

But if you plan to live in it yourself, then it’s not an asset in the original sense.

Therefore, some choose to rent instead. Which also gives them a lot of mobility.

However, if you plan to settle down and have a family, here is how you save up for a house.

Your house strategy

Let’s say you want to buy a $300,000 house.

The very first step is for you to decide. Will you buy it in an all-cash deal, or will you take advantage of a loan? 

Unless you have a pile of money lying around, you’ll probably go with option number two.

Here is how I would save up for a down payment:

Set a savings goal: Determine how much you need to save for a down payment and closing costs. A 20% down payment on a $300,000 house is $60,000, so your total savings goal should be around $80,000 to cover closing costs as well.

Create a budget: Review your current spending habits and find areas where you can cut back to increase your savings. Identify your fixed expenses, such as rent and utility bills, and your variable expenses, such as dining out and shopping.

Automate your savings: Set up automatic transfers from your checking account to your savings account. This way, you can save without thinking about it.

Low-risk investment options: Once you have a solid emergency fund, you can consider investing your savings in low-risk investment options such as savings accounts, CDs, money market funds, and short-term bonds.

Diversify your portfolio: Diversifying your portfolio by investing in a mix of different assets can help to minimize risk. 

Keep track of your progress: Keep track of your savings progress by monitoring your bank account regularly, and adjust your strategy if you are falling behind. There are tons of free excel trackers online.

Set a deadline: Give yourself a deadline to reach your savings goal. This will help you stay motivated and focused on your goal. 

This is awesome. Can you show me an example?

An example

An average home cost $348,079 in 2022. Assuming you have used the low-risk investment options, you would need to set aside $650 every month and invest it into an investment yielding 3% every year.

This way, you would need roughly 10 years to get the $89,615 for a down payment.

Or less if you save more. Maybe you could also consider a side hustle? You can read more on that here.

I know 10 years seems like a long time, but remember, everything is easier with a partner that shares your passions and interests.


So, note down these points and start saving today: 

  • The house you live in is not an investment
  • A good saving strategy will help you reach your goal faster
  • Saving is easier when you have a partner with a common interest



See you again next week.


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About Me

I am Vittorio Rigato, the Investing Coach behind Stoic Money.

I invested for more than 8 years, both for myself and by managing the 7-figures retirement account of my family.

After my Master Degree in Finance & Management, I worked in the FinTech industry in Frankfurt (Germany) and managed financial products with value up to €100 Millions.

In 2021 I have founded Stoic Money to teach employees and professionals worldwide how to invest to reach $1,000,000 Net Worth and beyond. Many of them reviewed Stoic Money service with a video testimonial here.

Multiple Finance News Websites like Yahoo Finance, MarketWatch, and Euronews talked about Stoic Money mission and services.

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