Re: Financial structure advice needed for forming group
From: Andrew Netherton (andrewnethertongmail.com)
Date: Sat, 25 Nov 2006 11:35:57 -0800 (PST)
I must admit, this is an interesting approach to looking at a large cash outlay:

I understand that young families are putting up a
larger amount of their ready cash, but they stand to
reap a much higher benefit: a very much longer period
of their lives living in the community.  I would have
given almost anything to raise my children in
cohousing, and I may have only a 15 year lifespan to
live in the community based on actuarial tables.  In
contrast, a young family is receiving an incredible
experience for their children and a chance to live in
the community for 40-45 years.  In my mind, this
advantage for the young families balances out the
higher percentage of their available funds that young
families need to contribute.

Yes, what you say is true, my young family and I could benefit for a
much longer time.  Unfortunately, there are two problems with this
assumption.  First, there are no guarantees.  My wife may hate
cohousing, or I may get a new job in a far off land in three years.
So there is nothing guaranteeing a longer payback period that what you
(actuarially) will be getting.  Second, just because the benefit is
bigger doesn't mean that we're actually able to put up more.  Although
you may be pulling in only a moderate retirement income, you probably
have more disposable income than I hope to ever have in the next two
decades, as I'm paying both a fairly new mortgage (15 years to go),
two vehicles (hope to lop that in half soon), two RESP (educations
savings - and we're not done having kids), not to mention all the
clothes that my kids outgrow every 4-6 months that have to be
replaced.  Yes, my kids, my wife, and I will lead a much richer life
in cohousing, but that doesn't do squat for the monthly bills.

Having said that, if I had access to the equity in my home and was
still able to live in my home, without increasing my monthly payments,
I'd happily invest it all in a low-risk cohousing development.

Regards,
Andrew Netherton
Laurel Creek Commons (forming)
Waterloo, ON, Canada

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