‘I Have No Intention of Buying in Israel’

A financial planner on turning a reaction into a decision

By Aaron Frolich

“I have no intention of buying a home in Israel.”

That is what a client told me, almost word for word, in one of our first conversations. She had owned a large ranch in Texas and was ready for something different—less maintenance, fewer responsibilities and more flexibility. What she wanted now was liquidity. She was still working, and she wanted her money available while she settled into life in Israel.

I told her that was a good plan. Better than good. Liquidity buys options, and options have real value.

About a month later, my phone rang.

“Aaron, I have to buy a home.”

Her circumstances had changed. She was uncomfortable with her landlord and wanted the stability of knowing where she would live.

My first response was simple: Breathe.

Not because buying a home was a bad idea. Quite the opposite. Homeownership can provide something that a financial analysis cannot fully capture: stability, belonging, and the freedom to make a home truly your own. And, who does not have the dream to own land in Eretz Yisrael?

The question was whether she was buying because she had found the right home—or because she felt she had no choice.

SHE WAS NOT WRONG

Renting offers flexibility, but flexibility has a price. So does uncertainty. For someone who has moved countries, built a new life and is trying to put down roots, the uncertainty of renting can become exhausting.

There is a point at which the question stops being simply, “What is the financially optimal choice?” It becomes: “Where do I want to call home, and what would that certainty be worth?”

Those are financial-planning questions too. My job was not to convince her to keep renting. It was to make sure that if she decided to buy, she could do it confidently.

SLOW IT DOWN, THEN PRICE IT

First, we established a budget before she went looking at homes—not after she found one she loved. That sequence matters. A number established in advance is an analysis. The same number established afterward can easily become a justification.

Liquidity. Buying a home requires a substantial commitment of capital, particularly for someone whose assets are primarily outside Israel. We wanted her to retain enough to maintain flexibility and handle the unexpected.

Retirement. A home is a different kind of asset from a portfolio. It may appreciate and provide enormous lifestyle value, but it does not typically produce retirement income and can be leveraged in retirement (need to downsize, etc.).

Currency exposure. Much of her wealth was held in U.S. dollars while her life was increasingly becoming shekel-based, and buying here moved a meaningful portion of it into a shekel-denominated asset. That was not necessarily a risk to avoid. If she planned for Israel to be her final home, her expenses would increasingly be in shekels, and owning an asset in that currency could actually strengthen her plan.

Conversion timing. The shekel had strengthened significantly and quickly, so the dollars she needed to convert bought fewer shekels than they would have not long before. No one can reliably time a currency, so we managed the conversion thoughtfully rather than trying to pick the perfect day. You cannot control the exchange rate. You can control how you approach it.

The next seven-to-10 years. She was still working, and those years mattered. Money left invested has the potential to compound, while money committed to a home provides a different kind of return.

THE HOUSE WE DID NOT BUY

At one point, the pressure almost got the better of her. She found a home she was seriously considering, but it was in a different city from where she really wanted to live. The sellers were difficult and the process had become increasingly stressful.

It would have been easy to say, “Let’s just make it work.”

Instead, she listened to her gut (and to me).

She walked away.

Thank God she did. She had been about to make a major, long-term commitment under pressure.

Then she found the right property, in the right city, where she could see herself living for years.

It cost more than the original budget, so we went back to the numbers. This time we weren’t reacting. We knew exactly where we stood and what the additional cost meant for her investments, liquidity, currency exposure and retirement plan.

We also built a financing plan for the retirement she wanted tomorrow, not just the purchase she was making today. Rather than simply asking, “Can you afford this mortgage?” we asked, “What does it take to have this mortgage paid off by the time you retire?”

We built an accelerated mortgage-paydown strategy around that goal, so the mortgage became part of her retirement plan rather than simply another monthly expense.

And, baruch Hashem, she moved into the home she wanted this month, in the city she wanted, with a financial plan that still worked around it.

She had made the decision deliberately, not just hoping it would work out—she knew what she was gaining, what she was giving up, and what the purchase meant for the years ahead.

YOU DO NOT HAVE TO DO THIS ALONE

A major purchase in Israel spans several areas of expertise. The right team around you—a lawyer, a mortgage professional, a banker, a real estate agent, a financial adviser—helps you see the pieces, ask better questions and decide with your eyes open.

The right home is not simply one you can afford to buy. It is one that fits the life you want to build.

MY RECOMMENDATIONS BEFORE YOU START LOOKING

→ Establish your budget before you fall in love with a property.

→ Understand the impact on your liquidity and your retirement.

→ Consider how the purchase changes your currency exposure.

→ Build a financing plan that fits your long-term goals, not just today’s payment.

→ Never let pressure push you into buying the wrong home.

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Aaron Frolich, CFP®, is the founder of Green Peak Advisors, a cross-border advisory firm serving those with financial lives in both Israel and the United States. He is a licensed investment adviser in Israel and a registered investment adviser in the U.S. He made aliyah in 2006 and lives in Tzur Hadassah with his wife and four children.