Owners aghast at how much money they throw away
Homes are a good example but this can apply to all building types

Investing in quality architecture by using a good architect can transform your life. Your property will be worth more, you will have more money in the bank, and you can invest more in other things like the stock market to build even more wealth. Why not leverage your hard earned money while reducing your risks? You can do it easily, but first, an example of investing small amounts of money and reaping big rewards over the long-term.

$100 invested in the stock market in 1946 would be worth $31,000 in 1996.

$10,000 invested in 1956 with Warren Buffett, with all proceeds reinvested, was worth $80,000,000 in 1994.

If it's so lucrative to invest in the stock market why bother building? Well, we need shelter, we need to invest in other areas for some diversification, and we need another good hedge against inflation which has been running about 5 percent annually. Why not invest in quality architecture and, with the money you save by doing it right, invest in the stock market, too?

Buying a home is the biggest investment an average person makes in his lifetime. The average person doesn't use an architect so they can save money, thinking they don't need the Taj Mahal. Using this logic the average person saves 12 percent on architectural fees but pays 20 percent higher construction costs because of no competitive bidding from the contractor. Maybe this is why they call them average.

Wasted and inefficiently utilized space costs homeowners an additional 15 percent in construction costs. A good architect can provide everything you need in 3,400 square feet instead of 4,000 square feet and you will enjoy your lifestyle more with a better floor plan. Underutilized rooms, because of adjacency problems and poor planning, are a hallmark of inexperienced "cheap" designers and costs you big bucks throughout the life of the building. Add energy bills to these wasted areas for 30 years and your eyes will glow like a runaway Russian Nuclear Power Plant.

Future Tip: Energy prices will be going up quite rapidly with deregulation and outages are predicted within four years. Foreign companies are buying up American energy companies. We're not in Kansas any more and if we were, the utility company would probably be owned by Scottish Power. In the very near future people will be forced to conserve. Smart people will direct their architect to design it into their building today. Good architects will insist on it.

Without a good architect specifying quality building products and construction details people do not know what the quality of construction is or whether they are being ripped off by unscrupulous contractors. Poorly constructed buildings using inferior products have 10 percent higher maintenance costs. Owners lose their inflation hedge by continually spending new dollars to finance and fix bad buildings. Leverage old dollars by building quality and taking care of it. Only short-term thinkers build poorly and let their buildings go.

Poor planning and design can cost you 20 percent of the value of your home when you sell because of poor location, bad siting on the lot, ugly design, and poor floor plan layout. Not all people are idiots and these items are important to many buyers. They should be important to you if you value your money. In a competitve market, you need all the advantages to maximize your investment. Let the others put their life on hold for two years trying to sell a "contractor special". You've got more important things to do with your life.

I've seen people drive up and ask to buy well designed homes that are not even for sale. Your asking price will be much higher this way and you won't have to put it on the market and pay 9 percent in realtor fees. What would you do with $25,000? Invested in the stock market it could make your family millionaires in 50 years - or the realtor's family, whichever you choose.

Future Tip: The information revolution and the emerging global economy are changing people's lifestyles. You may be required to work on your own rather than for a big company. If your house is designed well by a knowledgable architect, it could be a simple matter to utilize a portion for a home office. Poorly designed homes by amatuers make this option exceedingly difficult. If you have a nice home office you can save money lots of ways: No office rent and utilities, no daily commuter costs, less money on food, save time and have less stress. Also, if you can't utilize a home office, you can't write off 25 percent of your house and utilities for business use on your Federal taxes.

Go where the puck is going, not where it is - Investment advice from Wayne Gretzky

Please add interest to the higher construction costs above to get a true picture of the actual money being thrown away. Then write down the amount that could be earning you dividends in the stock market. Instead of compounding your mistakes you could be compounding your investments. Following our strategy you could pay the same amount monthly while living better and pay off your home in 20 years instead of 30 years - you will also save hundreds of thousands of dollars in interest and construction costs.

Still think a good architect is a waste of money?
jb@redfly.com

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