My friends are buying land back home. Should my savings go there or stay here?

The question

An illustrative letter.

The answer

My dear, I understand being pulled both ways. Land back home is never only about money. It is belonging, a place for your family, proof that you made it. I spent years working on housing finance across Africa, and I have seen land bought from abroad become a family's pride. I have also seen it become a family's heartbreak. The difference was almost never luck. It was how carefully the buyer checked, and how much they risked.

Why does land feel safer than a 401(k)?

Because you can stand on land. You can show a photo of it to your friends. A 401(k) is a number on a statement, rising and falling, and nobody at a party is impressed by it. But the number on that statement is real money, invested in many companies at once, growing with tax advantages and, if your employer matches, with free money added every paycheck. Your friends can see your plot. They cannot see your 401(k). That does not make it worth less.

What can go wrong with land back home?

Three things fail most often, and they can fail together.

• Titles. Plots are sold twice, titles are forged, and land promised as freehold turns out to be leasehold, or to belong to someone else entirely. Reports from Kenya and elsewhere describe diaspora buyers who paid for homes on land the developer did not own.
• Relatives. Even loving family can mismanage money sent for building, sell or use land without permission, or simply move in. When you live thousands of miles away, you depend on other people's honesty and other people's judgment.
• Currencies. Your dollars become local currency the moment they land, and currencies can fall hard. Between June 2023 and February 2024 alone, Nigeria's naira lost about two thirds of its value against the dollar. Land may hold its value in local terms while losing much of it in dollars, the currency you will retire in.

Land also cannot be sold quickly, earns nothing unless you build or rent it, and brings its own costs: legal fees, taxes, a guard, a fence. None of this means land is a bad idea. It means land is a serious investment that deserves serious checks.

How do I check a title from here?

Hire your own lawyer back home, someone who works for you and not for the seller or the agent. Ask them to carry out an official search at the land registry, to confirm who owns the plot and whether it is free of claims, mortgages or disputes. Have a licensed surveyor confirm the boundaries on the ground, so the plot on paper is the plot you will build on.

Pay through your lawyer, in stages, never in cash to an individual, and never the full amount before the title is verified. Once you buy, make sure the transfer is registered in your own name, and keep the original documents somewhere safe, preferably with you here. If you give anyone a power of attorney to act for you, make it written, specific to this purchase and limited in time. The checklist further down gathers these steps.

Why keep the 401(k) growing?

Because it is how you will live in your later years, wherever you choose to live them. If your employer matches your contributions, that match is part of your pay, and leaving it unclaimed is leaving money on the table. Over the twenty or more years before you retire, steady contributions can grow into a substantial sum.

And please, never take money out of your 401(k) to buy land. Before age 59 and a half, withdrawals usually mean income tax plus a 10 percent additional tax, and the money loses all the growth it would have earned.

How much of my $30,000 could go home?

Never all of it. Many people work in this order: first, an emergency fund here, three to six months of essential bills, because a lost job in Worcester cannot be paid for with a plot in your home country. Next, keep your 401(k) contributions going, at least to the full match. What remains can be your land budget, money you can afford to tie up for years, and could lose without harming your retirement.

If three months of bills comes to $12,000, that leaves $18,000 to work with. You might buy a smaller plot now and build later, in stages, paying for each stage only after someone you trust, ideally independent of the family, has confirmed the work with photos and a visit.

What do I say to my friends?

You can smile and tell them you are building on two continents. They see the plot, but not always the title disputes, the missing building money or the currency losses, and some of them may quietly wish they had kept a 401(k) as well. Your path is slower and steadier. In twenty years, you may have both: land at home you know is truly yours, and the savings here to enjoy it.

One thing to do this week

Work out three months of your essential bills, set that aside first, and decide what is left that you could tie up in land for years.