There is a theory in behavioral economics that states that a lot of what we believe in emanated from a thought that was first introduced to us.  This thought became our belief even though it was not our preference.

There is another theory in behavioral economics that says we put more value on the things we own even though another person would probably own the same thing.

Now allow me to explain and apply the above theories.

In the Philippines, the number 13 is believed to be an unlucky number.  Did you know that 13 is a lucky number in Thailand and India?  So why do Filipinos believe that 13 is an unlucky number; because everybody else in the country was saying so, including our parents.  Did we prefer the number 13 to be unlucky? Not really.

So look at the buildings in Makati.  There is hardly a building there with the 13th floor. Look at the rows of seats in an airplane.  There is no row number 13.  While the 14th floor and 14th seat row number are actually the 13th floor and 13th row, respectively, we consider them still the 14th because we refuse to be unlucky.  We grew up thinking that 13 is an unlucky number.  In fact, we grew up thinking and believing that there is such a thing as luck. The same is true with the beliefs on “pasma”, “bangungot”, and putting on “bigkis” on a newborn child.

On the other hand, would you rather be renting a car instead of owning it? Renting just adds expenses without leading to ownership. Plus, owning a car gives the confidence that we have greater purchasing power.

Aha! So that’s why our parents taught us that it is better to just use the rent money as amortization to buy a house. But many times, the amortization will be much larger than the rent expense, not counting the required equity that we need to put up.  We will end up shelling out more cash just to own a house.

I am not saying that people should not work at buying their own house.  The point that I am trying to make is that lenders and property developers may unwittingly be encouraging us to buy our house too early.  And because of budget constraints, we will probably end up selling that prematurely bought first house to buy that second house that we would want to live in for the rest of our life.

That is why there is a saying among financial planners that we should buy our second house first. There is wisdom in shelling out fewer cash in the form of rent so that we can save enough to buy that dream house later on. There is no need to rush.

And please remember that we do not say come house to our loved ones, we say come home. No matter how small our house may be, it can still be our home if we live in it harmoniously and with all the love that only a family can give.

(Originally written by Efren Ll. Cruz, RFP at

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