Money thoughts?
Comments
-
fatchowmein wrote: »Have we as a nation toppled over the purchasing pinacle? Was the period before this latest economic malaise the zenith of American purchasing power?
That pinacle was funded mostly by borrowing. I have read that aerrage income has actually been dropping for over a decade when inflation is taken into account.
Cathy,
My home is also paid off, about ten years early. I'm glad we did that now, but we still could become homeless if were unable to pay the taxes. And then there's all the utilities. Houses don't survive long here without heat in the winter. -
Gordon makes a very good case. Its all about the balance in life. You dont' want to live so poorly it makes others go without their basic needs, yet you don't need to go to the point you have 50K in CC debt and no money in the bank to pay for something.
This thread makes me feel like I'm back in accounting class lol.... -
cheif pontiac wrote: »On a side note I see elsewhere in the thread were someone mentioned if you mortgage has an interest rate low enough one would be better off investing extra monies in a higher interest earning venture. Sounds like someone with a PHD in selling forclosure mortgages. That was the catalyst and basis for the non conforming mortagage market and interest only loans. The logic being, why pay into equity on a home, especially if you plan to be there less than 5 years when through appreciation you will gain equity.
This is a great idea in a inclining market when the appreciation will give you security to sell or refinance with the apreciation equity. The problem is a home as an investment is a realitively new concept. Traditionally homes were purchased with cash or built by hand by the owner as a homestead, a place to have a roof over ones head.
No person financially wise would buy a home with an interest only loan because they expect the equity to go up. The only way an interest only loan makes sense at all, to me at least, is if you're flipping a house. I can't think of another example off the top of my head where it would make financial sense.
The great thing about the stock market is that over long periods of time, it always goes up. 5 years is not a long period of time. At least if youre flipping a house, its usually done fairly quickly, so the market you bought into isnt much different than the market you're selling out of.cheif pontiac wrote: »Regardless of what expenditure cost you more in the long run. Paying for and owning a home outright will outweigh any investment one could ever think of. Take it from one that has been homeless.
Disagree. If you invest the money you would spend on your home, you are going to make more money over the length of the term 99% of the time. Now say you lose your job...its not like "man, if i would have invested that money in my house instead of the stock market, id be ok because the house would be paid off". You still have the money...its right there where you invested it. You draw what you need out of that account each month, while the rest is STILL accruing interest.
It is pretty awesome you misspelled your username....haha. But I wont hold it against you;)cheif pontiac wrote: »P.S. yes my username is misspelled as I am sure what I wrote has plenty of typos.
-CodyMusic is like candy, you have to get rid of the rappers to enjoy it -
exalted512 wrote: »No person financially wise would buy a home with an interest only loan because they expect the equity to go up. The only way an interest only loan makes sense at all, to me at least, is if you're flipping a house. I can't think of another example off the top of my head where it would make financial sense.
The great thing about the stock market is that over long periods of time, it always goes up. 5 years is not a long period of time. At least if youre flipping a house, its usually done fairly quickly, so the market you bought into isnt much different than the market you're selling out of.
Disagree. If you invest the money you would spend on your home, you are going to make more money over the length of the term 99% of the time. Now say you lose your job...its not like "man, if i would have invested that money in my house instead of the stock market, id be ok because the house would be paid off". You still have the money...its right there where you invested it. You draw what you need out of that account each month, while the rest is STILL accruing interest.
It is pretty awesome you misspelled your username....haha. But I wont hold it against you;)
-Cody
BUTTTTT with what happened if you had say several thousand in stock and now try and pull it out its not going to give you any decent return on investment due to the stock probably going down to a point that your negative at this point. So now you pull out less money than what you thought you had.
Also depends on the "investment". Stock is an aggressive investment, you can lose you can gain. Say someone put money in at the peak of the market when they were in good standing, had a job ect. 10K in the market. Ok now the market is down they lost their job ect now that stock is only worth say 5K. You just cut yourself a 50% loss. Also if your behind on a mortgage by 2 months with a 2500 dollar payment...that "savings" only caught you up for two months rather than say the 4 months you could have already paid ahead on it. Which if you paid ahead then maybe for those months your unemployed you could find another job ect and save some more money for the next couple of payments. Granted thats not what always happens but is a possiblity.
I'm not saying that investing is a bad thing, people should do it for the future. its WHAT and HOW you invest which is the important thing. At what point you are in life, how much, what its going into, ect ect can all make a huge affect on the outcome. -
Ok now the market is down they lost their job ect now that stock is only worth say 5K. You just cut yourself a 50% loss. Also if your behind on a mortgage by 2 months with a 2500 dollar payment...that "savings" only caught you up for two months rather than say the 4 months you could have already paid ahead on it.
You can pay extra on a mortgage, that's what we did to pay it off 10 years early. But you cannot pay ahead. Even when we sent double or triple payments, there was still a full payment due each month. I believe most mortgages work that way. -
I see where you're coming from...But in that case, even when losing money...you're still better off. Why?
Because in that short period of time, your house is NOT paid for....so you're still making payments. Well, you put all your extra money into the house. You now have no extra money. At least with investing...you still have money, maybe less...but you still have it.
What you're comparing is more like saving money vs investing. No argument from me...you should have a few months put back before investing in your house or in stocks/bonds...or anything for that matter.
-CodyMusic is like candy, you have to get rid of the rappers to enjoy it -
You can pay extra on a mortgage, that's what we did to pay it off 10 years early. But you cannot pay ahead. Even when we sent double or triple payments, there was still a full payment due each month. I believe most mortgages work that way.
Correct. I didn't see this because I loaded it on my phone, then went to work, then typed my reply.
-CodyMusic is like candy, you have to get rid of the rappers to enjoy it -
Paying off the house by putting extra towards the balance scares me a little. Its like throwing money away until the date the house is paid off. For example I owe 150K still. If I had 100K sitting around and threw it towards the balance and lost my job tomorrow then I still have the same payment and no 100K to tide me over.Vinyl, the final frontier...
Avantgarde horns, 300b tubes, thats the kinda crap I want...
-
You can pay extra on a mortgage, that's what we did to pay it off 10 years early. But you cannot pay ahead. Even when we sent double or triple payments, there was still a full payment due each month. I believe most mortgages work that way.
Some nonconviental mortgages you can pay ahead on, just depends on the loan and the bank and what product you got. For us we do offer a mortgage you could pay ahead and then not have to make that normal monthly payment for the following months. -
Paying off the house by putting extra towards the balance scares me a little. Its like throwing money away until the date the house is paid off. For example I owe 150K still. If I had 100K sitting around and threw it towards the balance and lost my job tomorrow then I still have the same payment and no 100K to tide me over.
But you'd save an ****$load in interest....:DTNRabbit
NO Polk Audio Equipment :eek:
Sunfire TG-IV
Ashly 1001 Active Crossover
Rane PEQ-15 Parametric Equalizers x 2
Sunfire Cinema Grand Signature Seven
Carver AL-III Speakers
Klipsch RT-12d Subwoofer -
Some nonconviental mortgages you can pay ahead on, just depends on the loan and the bank and what product you got. For us we do offer a mortgage you could pay ahead and then not have to make that normal monthly payment for the following months.
A good option - and one that a lot of people don't seem to know about - is to pay your mortgage bi-weekly. It's the same net total payment per month, but it can shave up to 5 years off the life of the mortgage and save a lot of money in interest.Speakers: Polk LSi15
Pre: Adcom GFP-750 with HT Bypass
Amp: Pass Labs X-150
CD/DVD Player: Classe CDP-10
Interconnects: MIT Shortgun S3 Pro XLR
Speaker cables: MIT MH-750 bi-wire
TT:Micro Seiki DD-35
Cartridge:Denon DL-160
Phono Pre:PS Audio GCPH -
Paying off the house by putting extra towards the balance scares me a little. Its like throwing money away until the date the house is paid off. For example I owe 150K still. If I had 100K sitting around and threw it towards the balance and lost my job tomorrow then I still have the same payment and no 100K to tide me over.
Depending on what your interest rate is and your personal income, you mortgage is the cheapest money you have. For example, my mortgage is at 4.125%. With the last bracket that we pay for fed taxes, that money is really at 3%. So in my case if I can find an investment with an expected (or better yet, garaunteed) return higher than 3%, I should do that rather than pay down the mortgage. In fact, given most years inflation is higher than the 3% effective rate... Which kind of implies that if I get a windfall, I should buy that toy I had my eye on over paying down my mortgage...There is no genuine justice in any scheme of feeding and coddling the loafer whose only ponderable energies are devoted wholly to reproduction. Nine-tenths of the rights he bellows for are really privileges and he does nothing to deserve them. We not only acquired a vast population of morons, we have inculcated all morons, old or young, with the doctrine that the decent and industrious people of the country are bound to support them for all time.-Menkin -
exalted512 wrote: »No person financially wise would buy a home with an interest only loan because they expect the equity to go up. The only way an interest only loan makes sense at all, to me at least, is if you're flipping a house. I can't think of another example off the top of my head where it would make financial sense.
The great thing about the stock market is that over long periods of time, it always goes up. 5 years is not a long period of time. At least if youre flipping a house, its usually done fairly quickly, so the market you bought into isnt much different than the market you're selling out of.
Disagree. If you invest the money you would spend on your home, you are going to make more money over the length of the term 99% of the time. Now say you lose your job...its not like "man, if i would have invested that money in my house instead of the stock market, id be ok because the house would be paid off". You still have the money...its right there where you invested it. You draw what you need out of that account each month, while the rest is STILL accruing interest.
It is pretty awesome you misspelled your username....haha. But I wont hold it against you;)
-Cody
Unfotrtunately Exalted stocks have never gone up for me. There is no gaurantee that they always will. We recently bailed Wall street out and there was the little thing called the great depression. There was even a crash in 1890 or so that wiped people out. That seems to be more of a regular phenomenom of people losing moning or being wiped out than making money. Anyway how do you make money? Where does it come from? LOL I'll stick to paying on my house. I have a payment that I can make on a $10-$12 hour job. Plus I am single and could easily have two renters. I have one right now.
I see buying a house and investing as two different things. As I stated before buying a house as an investment is a relatively new concept.
Pulling money out of investments is not a good way to acquire money to live on pre retirement. There are fees, penalities and taxes to withdraw on most investment early. Even a mortagage can have a prepayment penalty.
Ultimately, it is nice to have a cash reserve that is easily accessible and will allow one to live until employemnt is found. Exalted you are right if one paid ahead on the house without the cash resrves they would still lose it. I had 20K cash reserves and still had to sell my house.
Exalted you would not believe the amount of people that were foolish enough to take an interest only loan. Especially when the expectation was that your home would go up in value. Markets like Florida, Las Vegas and California saw great increases. Home values were artificially inflated by bankers handing out non-conforming loans allowing people to buy more than they could afford. The moeny ran out, the market crashed and our govenrment was so kind to rewrad all the fools with a bail out.
That is the real solution. Petition your Senator and Congressman for a bail out when you run out of money, spend it all screw investing.
Wait what was the arguement now? Oh yeah to invest or pay your mortagage. If everyone does both or either or within their means I am sure we will all be fine.
P.S. Where is teh spellcheck ?System:
Samsung LN46C630
Receiver: Yamaha RX-V1
DVD/Blu: Denon 2910/Playstation 3
Front mains: RT16
Front presence: F/X 500i
Center: CS400
Rear surrounds: RT1000p
Rear center: RT7
Subwoofer: PSW505 X 2
2 Channel
Marantz 2252B
Technics SL-Q2 turntable
Kef Q50 -
Everyone needs to do what's best for them and no one solution will fit all situations and problems.
What my wife and I did to get ahead was max out all retirement savings vehicles and put even more into savings/paying off debts until our take home pay was the same as if either one of us lost a job. Now that my wife isn't working in the paid worlds (raising a toddler is harder work IMHO) we didn't have to change our spending habits, just our saving habits. Now, if I do lose my job (knock on wood) we have that 10 years of savings to act as a buffer (enough for ~4-5 years at current expenditure rates) and our house and current monthly expenditures as our only debt. The biggest problem is most people don't have the discipline to stick to a plan like that.
If you're young, I'd HIGHLY reccommend it. If you can live like a college student but buying a house for 5-10 years straight from college, you'd be suprised how far ahead you'll be by your 30's. The key is it's really easy to just spend more and more, and REALLY hard to cut back so to stick with the lower lifestyle you had in college.There is no genuine justice in any scheme of feeding and coddling the loafer whose only ponderable energies are devoted wholly to reproduction. Nine-tenths of the rights he bellows for are really privileges and he does nothing to deserve them. We not only acquired a vast population of morons, we have inculcated all morons, old or young, with the doctrine that the decent and industrious people of the country are bound to support them for all time.-Menkin -
Depending on what your interest rate is and your personal income, you mortgage is the cheapest money you have. For example, my mortgage is at 4.125%. With the last bracket that we pay for fed taxes, that money is really at 3%. So in my case if I can find an investment with an expected (or better yet, garaunteed) return higher than 3%, I should do that rather than pay down the mortgage. In fact, given most years inflation is higher than the 3% effective rate... Which kind of implies that if I get a windfall, I should buy that toy I had my eye on over paying down my mortgage...
We thought about investing, instead of paying down the mortgage. There were a couple of downsides though. All our investments were tax deffered, if we needed to draw out money to make a house payment, or whatever, we would be charged heavy taxes, and penalties. And now that our investments are worth roughly half what they were 5 years ago, I think we made the right decision. -
No i don't, Don't get me wrong i would LOVE to own a house but it's not in the cards for several reasons.inspiredsports wrote: »Do you own a home free and clear that you paid cash for?
1. I don't have the cash and never will, unless some rich unknown relative dies and leaves me a boat load of it.
2. I won't finance a house because frankly i can't qualify with my monthly income and monthly expenses, more importantly i can't see paying 2 - 3 times the original price by the time it's all paid off and that's if you don't get screwed in the "Home loan paper shuffle" that's been going on in this country for the last 30 years (Thank you Mr. Regan).
3. I've seen and read too many Home Loan horror stories to even think about going down that road.
4. Most financial experts will tell you that if you take that money and invest it that the return of said investment will at least offset the interest of the home loan. Maybe, that is if some wall street **** doesn't abscond with your investment, Oh and by the way he's the same guy who 6 months ago sold the paper on your house (unbeknown to you) to 3 different mortgage houses who have been holding your mortgage payments so they can jack up your rates or foreclose your loan. No thank you, Financing these days is a crap shoot at best and investing is nothing more than hi stakes gambling, if you don't think so just try asking for your money back.
Now i know i sound VERY negative about this but have you really looked at the state of the financial institutions in this country, I'm mean REALLY looked it's all built on a house of cards and someone has lit the bottom row of cards on fire. This last fiasco (AIG, City Bank, Lehman Brother's etc.) was just the tip of the ice berg. Our government over the last 30 years has de-regulated (Thank you again Mr. Regan) the financial institutions to the point that these people think that they can get away with anything and if they screw up they just get the tax payers to bail them out and then pay themselves a big fat bonus for doing so.
So when it comes to financing and investments, NO thank you i'll pass. I'll just pay my bills on time every month and be happy and if it takes me 6 month to a year or more to save enough to buy that widget i want so be it. At least i wont be paying more for something than if i just waited and paid cash for it. I spent almost 20 years saving up 50k for a van i needed/wanted. That may seem like a long time but at least it's paid for and i don't have to worry about not being able to make a payment and having the repo guy showing up to take my van.cheif pontiac wrote: »P.S. Where is teh spellcheck ?
Right click any word, Found that out by accident:o.“The two most important days in your life are the day you are born and the day you find out why.” ~ Mark Twain -
Don't forget your mortgage is compound interest and as an investment it goes up according to yearly cost of living increase and this plays in your favor. While your interest portion of the mortgage decreases, your equity increases, your investment effort is in direct relation with your gain (no middle man gains from your effort) and I don't know about the US but here in Canada money invested in your home isn't taxable! :cool: On the other hand, typical investment first work to benifit your bank or investment firm, doesn't always fluctate according to cost of living and of course your tax man will eventually put his hands on a substantial portion of that money :eek:=exalted512;1391292]...But depending on the interest rates of purchases (home/cars), it doesnt always make sense to pay stuff off immediately or sink a lot in to your home when you could be investing it somewhere else.
If your interest rate is low enough, it is almost always more beneficial to invest in a IRA or something along those lines as you make more in interest on the investment than the interest you pay on the purchase.
Meaning...and extreme example just to clarify.
You have a 7% yield on investment A. You're car note is 0%. You have enough to cash right now to buy the car out right. The car is $30,000. Or you could invest the $30,000 making interest, then slowly depleting that after you make payments on the car. I dont have my financial calculator with me, but it makes a lot more financial sense to put your money in investment A than to spend the $30,000 out right.
Same goes with the house, yes, you're paying it off faster, yes, you're saving interest, but are you saving more interest than you could be making by investing that money somewhere else?
Great post! A typical investment can be quite uncertain but paying your debts (IE: Mortgage) is a sure and sound investment no matter what even furthermore, it will protect you against outside moves of the economy (what you can't control).Opportunity costs. Anytime you spend or do something instead of something else, there is a cost associated in not doing the other thing. There is an immediate effect in that any dollar spent on the gear is a dollar not invested or used to pay down debt. It is not a straight line effect. There is value in the gear and the use of it...so no...it did not cost you $2,000 - $3,000. It may have cost you the DIFFERENCE in the future value of what you didn't do vs the residual value of what you did plus the value of the use. Again that is not an easy thing to determine on the front end. That $1,000 invested may or MAY NOT be worth more than the value of gear. The investment could actually go down in value...not even considering inflation eating away the future value. You may have purchased a piece of gear that actually appreciated in value...so much so that even with inflation the future value exceeds the value of the investment. Paying down debt? Same thing. You don't know the ultimate outcome.
The immediate opportunity cost is simple. You can only spend the dollar one way. Once gone the opportunity to do something else is gone...but again...it is only the difference inthe expected value of one vs the other at the time the dollar is spent.
Again, investments in such as gold, oil etc is at the mercy of the investing firm which will take a good chunk of your profit but guess what, in the case your investment goes down that firm will NOT take any portion of the lost, it is YOUR lost :eek:inspiredsports wrote: »...but don't underestimate the strength of gold and oil in an economic storm, and don't overestimate the strength of that roof in a tornado.
I agree with you therefore the necessity for balance.some people save like a **** for retirement...then leave this world early...i say: live for now, like today is your last...don't be a fool, tho...cause if you're still here tomorrow, you'll have to live with your crazy self.
During tough times your "fast cash payments" on the home will be much lighter and moderate then during good financial times. One of the big problem with most people is when good financial times are around they will more likely spend the extra cash and get used to the present life style and when bad times are around, they are not able to cope with it and the downfall is even bigger.OK, so I tend to agree with your whole post. The above thought is one I haven't been able to trust in my own mind but would like to. What keeps eating at me is right now the mortgage seems like a lot of money but I know in 15 years it will seem like nothing due to inflation. Why would someone pay it off right now when it is much tougher to get the cash to do so? BTW, I currently have an account building up trying to decide whether to dump it on the mortgage. I really want to knock this thing off in the next 5 years but I'm not sure that is the best idea.
As inflation go up and if the income doesn't match the inflation (income lower than inflation) than the investment in your home provides you some leverage, power to keep living according to your usal pattern.DARE TO SOAR:
Your attitude, almost always determine your altitude in life
-
Great post! I am a good example of such, I was unexpectedly hospitalized early this year (February 1st) and lost big chunk of my income (about 400$ every 2 weeks). I also had waiting periods before getting some money from un-employment. Am I glad I had a little money aside, no debts (I can't imagine hefty car payments) and low mortgage payments (lower than typical home rent). I was a little more cautious with the money but I could still do most of the things I enjoy and even find ways to remain an active consumers (I spent big $$$ on health equipment and threatments too). Since the company I work for was not ready to take me back right away after sickness I was nearly a full month without incoming money but didn't really suffered from it....Being in debt is a very bad thing especially in todays economy. You can't know if you are going to keep your job, nor can you know when you will get another one.
And paying for something over & over again because you can't pay off a credit card makes zero sense to me.
Always live within your means, put money away for emergencies, pay your bills in full so that if disaster strikes, you will have one less worry.
Actually, saving money and staying debt free was the norm in prior generations. I can recall budget training and knowledge to be spread around in my younger days... You do not hear about budgetting and saving nowadaysfatchowmein wrote: »...Have we as a nation toppled over the purchasing pinacle? Was the period before this latest economic malaise the zenith of American purchasing power? Are we heading towards a simpler life less filled with material needs? Is the material girl dead or is this merely a bump in the road and we'll be back to, "Don't Worry, Be Happy" once we get out of? Ultimately, are we just temporarily tightening our belt during this lean period or are we experiencing a paradigm shift?
Is Cathy becoming the new normal?
Actually you can do the same with your home equity and eventually you get that equity back but the money you yanked out of your investment is simply gone and costed you money to yank it out.exalted512 wrote: »...The great thing about the stock market is that over long periods of time, it always goes up. 5 years is not a long period of time. At least if youre flipping a house, its usually done fairly quickly, so the market you bought into isnt much different than the market you're selling out of.
Disagree. If you invest the money you would spend on your home, you are going to make more money over the length of the term 99% of the time. Now say you lose your job...its not like "man, if i would have invested that money in my house instead of the stock market, id be ok because the house would be paid off". You still have the money...its right there where you invested it. You draw what you need out of that account each month, while the rest is STILL accruing interest....
You are right but the equity gives you leverage and you can easily renegociate during hard times because you are actually WORTH something and your bank knows this, knows you are NOT a GREATHER risk! Personnally I have an open mortgage (can be renegotiated at any time, can be closed at any times, paid fully at any times and this without any penalties what so ever).You can pay extra on a mortgage, that's what we did to pay it off 10 years early. But you cannot pay ahead. Even when we sent double or triple payments, there was still a full payment due each month. I believe most mortgages work that way.
You do not see that your home is an investment and actually is LIQUIDITY. The paid capital on your home is ASSETS, ASSETS is MONEY!!!exalted512 wrote: »I see where you're coming from...But in that case, even when losing money...you're still better off. Why?
Because in that short period of time, your house is NOT paid for....so you're still making payments. Well, you put all your extra money into the house. You now have no extra money. At least with investing...you still have money, maybe less...but you still have it.
What you're comparing is more like saving money vs investing. No argument from me...you should have a few months put back before investing in your house or in stocks/bonds...or anything for that matter.
As I pointed out, your bank would take you seriouly since you have assets (MONEY) and would easily renegotiate with you. If you have money sitting there, you should invest it in your home, not the whole amount (keep let's say a couple months of your normal budget expense) but as much as you feel comfortable. I had about 10K available when I renewed the mortgage, I went half way and dumped 5K at renewal and kept the other 5K for emergencies and debts payments. I now probably have a month ahead sitting in my account and go over each month and dump money on the home according to the budget surplus. No surplus, no extra payments but if there is a surplus I put it to good use and dump it on the mortgage.Paying off the house by putting extra towards the balance scares me a little. Its like throwing money away until the date the house is paid off. For example I owe 150K still. If I had 100K sitting around and threw it towards the balance and lost my job tomorrow then I still have the same payment and no 100K to tide me over.
The main reasons I'm up to this:
Lost big $$$ investing...
My house is NOT paid yet and should have been a few years ago...
At 54 going on to 55, I realize pension is coming much faster then expected and I want to be ready for it.
To me, having a paid home at retirement is like having extra pension $$$ but without having ties with any firms (which charge us to control our money) or government (income taxes). I want to enjoy retirement (travel and do things I like) not simply waiting for death. However, in the mean time I still want to enjoy life according to my mean and fine this is the best solution to do so.
Cheers!
TKDARE TO SOAR:
Your attitude, almost always determine your altitude in life -
Gim
Uh, actually, you sound very uninformed and idealogical. Don't drink the kool-aid...There is no genuine justice in any scheme of feeding and coddling the loafer whose only ponderable energies are devoted wholly to reproduction. Nine-tenths of the rights he bellows for are really privileges and he does nothing to deserve them. We not only acquired a vast population of morons, we have inculcated all morons, old or young, with the doctrine that the decent and industrious people of the country are bound to support them for all time.-Menkin -
I do that too.A good option - and one that a lot of people don't seem to know about - is to pay your mortgage bi-weekly. It's the same net total payment per month, but it can shave up to 5 years off the life of the mortgage and save a lot of money in interest.
Exactly! Investing in your self through your self is the most cost effective way. You do it through somebody else or some other means well, there is a cost and it is a diminished return not counting the risk of getting s@#$%d (I have been there and done that :eek: )But you'd save an ****$load in interest....:DDARE TO SOAR:
Your attitude, almost always determine your altitude in life -
Hey Gim,
When I bought my first house it was almost like a joke. A friend and I had nothing to do one sunday and he said "Do you wanna buy a house?" We found a realtor at one house and she asked me which one I wanted. I pointed to one up on a hill that we had not even looked at. Surprisingly enough she ran my credit and I was approved for a loan. I was making nothing but I got by with putting 5% down (of which I worked massive overtime for a few weeks to come up with).
In any case another friend had your same view. It turned out that what I did was lock in my living cost, he rented and didn't. Within about 7 years he couldn't afford half the house I had because rent had become so high. At the end I sold mine and made twice what I bought it for, he just moved on to a smaller apartment.Vinyl, the final frontier...
Avantgarde horns, 300b tubes, thats the kinda crap I want... -
We thought about investing, instead of paying down the mortgage. There were a couple of downsides though. All our investments were tax deffered, if we needed to draw out money to make a house payment, or whatever, we would be charged heavy taxes, and penalties. And now that our investments are worth roughly half what they were 5 years ago, I think we made the right decision.
We balanced that out. Roth's you can pull out as much as you put in without penalty, retirement accounts have rules for fee waivers for a reason, and we also have a lot of self directed accounts which are much more liquid.There is no genuine justice in any scheme of feeding and coddling the loafer whose only ponderable energies are devoted wholly to reproduction. Nine-tenths of the rights he bellows for are really privileges and he does nothing to deserve them. We not only acquired a vast population of morons, we have inculcated all morons, old or young, with the doctrine that the decent and industrious people of the country are bound to support them for all time.-Menkin -
No i don't, Don't get me wrong i would LOVE to own a house but it's not in the cards for several reasons.
1. I don't have the cash and never will, unless some rich unknown relative dies and leaves me a boat load of it.
2. I won't finance a house because frankly i can't qualify with my monthly income and monthly expenses, more importantly i can't see paying 2 - 3 times the original price by the time it's all paid off and that's if you don't get screwed in the "Home loan paper shuffle" that's been going on in this country for the last 30 years (Thank you Mr. Regan).
3. I've seen and read too many Home Loan horror stories to even think about going down that road.
4. Most financial experts will tell you that if you take that money and invest it that the return of said investment will at least offset the interest of the home loan. Maybe, that is if some wall street **** doesn't abscond with your investment, Oh and by the way he's the same guy who 6 months ago sold the paper on your house (unbeknown to you) to 3 different mortgage houses who have been holding your mortgage payments so they can jack up your rates or foreclose your loan. No thank you, Financing these days is a crap shoot at best and investing is nothing more than hi stakes gambling, if you don't think so just try asking for your money back.
Now i know i sound VERY negative about this but have you really looked at the state of the financial institutions in this country, I'm mean REALLY looked it's all built on a house of cards and someone has lit the bottom row of cards on fire. This last fiasco (AIG, City Bank, Lehman Brother's etc.) was just the tip of the ice berg. Our government over the last 30 years has de-regulated (Thank you again Mr. Regan) the financial institutions to the point that these people think that they can get away with anything and if they screw up they just get the tax payers to bail them out and then pay themselves a big fat bonus for doing so.
So when it comes to financing and investments, NO thank you i'll pass. I'll just pay my bills on time every month and be happy and if it takes me 6 month to a year or more to save enough to buy that widget i want so be it. At least i wont be paying more for something than if i just waited and paid cash for it. I spent almost 20 years saving up 50k for a van i needed/wanted. That may seem like a long time but at least it's paid for and i don't have to worry about not being able to make a payment and having the repo guy showing up to take my van.
Right click any word, Found that out by accident:o.
umm no. -
Yes and I thank God for it now that I'm out of a job! At least I won't end up homeless.
umm, yeah, but I was kind of aiming that question specifically at gim54pod who wrote, "If you can't pay cash for it, You don't need it. I don't have credit cards and i NEVER will, and never ever spend more than you have.
I was just wondering if he paid cash for his home.VTL ST50 w/mods / RCA6L6GC / TlfnknECC801S
Conrad Johnson PV-5 w/mods
TT Conrad Johnson Sonographe SG3 Oak / Sumiko LMT / Grado Woodbody Platinum / Sumiko PIB2 / The Clamp
Musical Fidelity A1 CDPro/ Bada DD-22 Tube CDP / Conrad Johnson SD-22 CDP
Tuners w/mods Kenwood KT5020 / Fisher KM60
MF x-DAC V8, HAInfo NG27
Herbies Ti-9 / Vibrapods / MIT Shotgun AC1 IEC's / MIT Shotgun 2 IC's / MIT Shotgun 2 Speaker Cables
PS Audio Cryo / PowerPort Premium Outlets / Exact Power EP15A Conditioner
Walnut SDA 2B TL /Oak SDA SRS II TL (Sonicaps/Mills/Cardas/Custom SDA ICs / Dynamat Extreme / Larry's Rings/ FSB-2 Spikes
NAD SS rigs w/mods
GIK panels -
No i don't, Don't get me wrong i would LOVE to own a house but it's not in the cards for several reasons.
1. I don't have the cash and never will, unless some rich unknown relative dies and leaves me a boat load of it.
2. I won't finance a house because frankly i can't qualify with my monthly income and monthly expenses, more importantly i can't see paying 2 - 3 times the original price by the time it's all paid off and that's if you don't get screwed in the "Home loan paper shuffle" that's been going on in this country for the last 30 years (Thank you Mr. Regan).
3. I've seen and read too many Home Loan horror stories to even think about going down that road.
4. Most financial experts will tell you that if you take that money and invest it that the return of said investment will at least offset the interest of the home loan. Maybe, that is if some wall street **** doesn't abscond with your investment, Oh and by the way he's the same guy who 6 months ago sold the paper on your house (unbeknown to you) to 3 different mortgage houses who have been holding your mortgage payments so they can jack up your rates or foreclose your loan. No thank you, Financing these days is a crap shoot at best and investing is nothing more than hi stakes gambling, if you don't think so just try asking for your money back.
Now i know i sound VERY negative about this but have you really looked at the state of the financial institutions in this country, I'm mean REALLY looked it's all built on a house of cards and someone has lit the bottom row of cards on fire. This last fiasco (AIG, City Bank, Lehman Brother's etc.) was just the tip of the ice berg. Our government over the last 30 years has de-regulated (Thank you again Mr. Regan) the financial institutions to the point that these people think that they can get away with anything and if they screw up they just get the tax payers to bail them out and then pay themselves a big fat bonus for doing so.
So when it comes to financing and investments, NO thank you i'll pass. I'll just pay my bills on time every month and be happy and if it takes me 6 month to a year or more to save enough to buy that widget i want so be it. At least i wont be paying more for something than if i just waited and paid cash for it. I spent almost 20 years saving up 50k for a van i needed/wanted. That may seem like a long time but at least it's paid for and i don't have to worry about not being able to make a payment and having the repo guy showing up to take my van.
Right click any word, Found that out by accident:o.
So do you pay rent?
You mention paying a factor of 2-3 times the value of the home due to interest.
My brother has rented for about 30 years, probably to the tune of $300,000.
Based upon his income, he had probably paid more than $30,000 in income taxes because he could not deduct home mortgage interest.
Somewhere around $330,000 with NOTHING, Repeat, NOTHING to show for it.
Now what is the factor my bro has paid for living space ?????????
By the way, had he purchased a home and paid $300,000 in payments and spent $30,000 saved tax dollars to put stuff into that home over the past 30 years, he would probably have a home worth about, are you ready . . . . $330,000. Wow, imagine that.
P.S. Can you name even one "wall street ****" who has "abscond with your investment" ?? Has it happened to you? To someone you know?VTL ST50 w/mods / RCA6L6GC / TlfnknECC801S
Conrad Johnson PV-5 w/mods
TT Conrad Johnson Sonographe SG3 Oak / Sumiko LMT / Grado Woodbody Platinum / Sumiko PIB2 / The Clamp
Musical Fidelity A1 CDPro/ Bada DD-22 Tube CDP / Conrad Johnson SD-22 CDP
Tuners w/mods Kenwood KT5020 / Fisher KM60
MF x-DAC V8, HAInfo NG27
Herbies Ti-9 / Vibrapods / MIT Shotgun AC1 IEC's / MIT Shotgun 2 IC's / MIT Shotgun 2 Speaker Cables
PS Audio Cryo / PowerPort Premium Outlets / Exact Power EP15A Conditioner
Walnut SDA 2B TL /Oak SDA SRS II TL (Sonicaps/Mills/Cardas/Custom SDA ICs / Dynamat Extreme / Larry's Rings/ FSB-2 Spikes
NAD SS rigs w/mods
GIK panels -
I guess I missed the part where you "spent almost 20 years saving up 50k for a van i needed/wanted."
Was that a van you needed to make you more effective in your job? If so, you could have been paying a little interest and hopefully making a lot more money than the cost of the interest over those 20 years.
I agree that reckless borrowing is, well, . . . reckless. But it seems people aren't learning how to properly leverage assets anymore. Fear of borrowing is equally as stupid as reckless borrowing. You just have to have an intelligent plan and execute it.VTL ST50 w/mods / RCA6L6GC / TlfnknECC801S
Conrad Johnson PV-5 w/mods
TT Conrad Johnson Sonographe SG3 Oak / Sumiko LMT / Grado Woodbody Platinum / Sumiko PIB2 / The Clamp
Musical Fidelity A1 CDPro/ Bada DD-22 Tube CDP / Conrad Johnson SD-22 CDP
Tuners w/mods Kenwood KT5020 / Fisher KM60
MF x-DAC V8, HAInfo NG27
Herbies Ti-9 / Vibrapods / MIT Shotgun AC1 IEC's / MIT Shotgun 2 IC's / MIT Shotgun 2 Speaker Cables
PS Audio Cryo / PowerPort Premium Outlets / Exact Power EP15A Conditioner
Walnut SDA 2B TL /Oak SDA SRS II TL (Sonicaps/Mills/Cardas/Custom SDA ICs / Dynamat Extreme / Larry's Rings/ FSB-2 Spikes
NAD SS rigs w/mods
GIK panels -
inspiredsports wrote: »So do you pay rent?
You mention paying a factor of 2-3 times the value of the home due to interest.
My brother has rented for about 30 years, probably to the tune of $300,000.
Based upon his income, he had probably paid more than $30,000 in income taxes because he could not deduct home mortgage interest.
Somewhere around $330,000 with NOTHING, Repeat, NOTHING to show for it.
Now what is the factor my bro has paid for living space ?????????
By the way, had he purchased a home and paid $300,000 in payments and spent $30,000 saved tax dollars to put stuff into that home over the past 30 years, he would probably have a home worth about, are you ready . . . . $330,000. Wow, imagine that.
P.S. Can you name even one "wall street ****" who has "abscond with your investment" ?? Has it happened to you? To someone you know?
Yes i pay rent and have all my life, All i'm saying here is in my situation money wise i can't afford to take the risk on buying a house and then have it taken away because i can't make the payments, same reason for not investing money I just can't afford the risk. as far as your brother go's i don't know his financial situation maybe he just didn't want to take on that kind of responsibility or debt I know i don't. Now don't get me wrong if you can afford to buy a house you should do it. It's most likely a good investment in the long run.
"Wall street ****" Right off the top of my head "Bernie Madoff" for starters.
I don't invest so i haven't been taken.
But then i could just be full of brown stinky stuff. Hope I didn't piss anyone off here i didn't mean to.“The two most important days in your life are the day you are born and the day you find out why.” ~ Mark Twain -
inspiredsports wrote: »I agree that reckless borrowing is, well, . . . reckless. But it seems people aren't learning how to properly leverage assets anymore. Fear of borrowing is equally as stupid as reckless borrowing. You just have to have an intelligent plan and execute it.
+ 1000 to this!Speakers: Polk LSi15
Pre: Adcom GFP-750 with HT Bypass
Amp: Pass Labs X-150
CD/DVD Player: Classe CDP-10
Interconnects: MIT Shortgun S3 Pro XLR
Speaker cables: MIT MH-750 bi-wire
TT:Micro Seiki DD-35
Cartridge:Denon DL-160
Phono Pre:PS Audio GCPH -
Yes i pay rent and have all my life, All i'm saying here is in my situation money wise i can't afford to take the risk on buying a house and then have it taken away because i can't make the payments, same reason for not investing money I just can't afford the risk. as far as your brother go's i don't know his financial situation maybe he just didn't want to take on that kind of responsibility or debt I know i don't. Now don't get me wrong if you can afford to buy a house you should do it. It's most likely a good investment in the long run.
"Wall street ****" Right off the top of my head "Bernie Madoff" for starters.
I don't invest so i haven't been taken.
But then i could just be full of brown stinky stuff. Hope I didn't piss anyone off here i didn't mean to.
No worries and no anger here.
It's just when you write paragraph after paragraph as you did, you might consider making them logical and defensible in a forum like this where you will be taken to task if you don't make sense.
You give advice like, "If you can't pay cash for it, you don't need it." and, "Never ever spend more than you have."
But then you say you would love to own a home, and it seems as if maybe you would consider it, but that you can't qualify for a loan. No problem, but if you would never borrow, the fact that you don't qualify doesn't even figure in to the equation. And if you would never borrow, chances are you will never own a home.
That's when I pointed out you are flat out wasting money if you pay rent, and the 2-3 x factor doesn't apply because you are wasting every penny you spend with zero return, not just half or 2/3 of it. You are actually buying someone else a house if you pay rent.
Last you introduce the nebulous concept that the late President Reagan is somehow responsible. Again, not relevant as you would not ever borrow for anything, so it would never matter who deregulated what.
You also said you would never invest, so it appears you have never personally been ripped off by these supposed Wall Street ****.VTL ST50 w/mods / RCA6L6GC / TlfnknECC801S
Conrad Johnson PV-5 w/mods
TT Conrad Johnson Sonographe SG3 Oak / Sumiko LMT / Grado Woodbody Platinum / Sumiko PIB2 / The Clamp
Musical Fidelity A1 CDPro/ Bada DD-22 Tube CDP / Conrad Johnson SD-22 CDP
Tuners w/mods Kenwood KT5020 / Fisher KM60
MF x-DAC V8, HAInfo NG27
Herbies Ti-9 / Vibrapods / MIT Shotgun AC1 IEC's / MIT Shotgun 2 IC's / MIT Shotgun 2 Speaker Cables
PS Audio Cryo / PowerPort Premium Outlets / Exact Power EP15A Conditioner
Walnut SDA 2B TL /Oak SDA SRS II TL (Sonicaps/Mills/Cardas/Custom SDA ICs / Dynamat Extreme / Larry's Rings/ FSB-2 Spikes
NAD SS rigs w/mods
GIK panels -
Yes i pay rent and have all my life, All i'm saying here is in my situation money wise i can't afford to take the risk on buying a house and then have it taken away because i can't make the payments, same reason for not investing money I just can't afford the risk. as far as your brother go's i don't know his financial situation maybe he just didn't want to take on that kind of responsibility or debt I know i don't. Now don't get me wrong if you can afford to buy a house you should do it. It's most likely a good investment in the long run.
"Wall street ****" Right off the top of my head "Bernie Madoff" for starters.
I don't invest so i haven't been taken.
But then i could just be full of brown stinky stuff. Hope I didn't piss anyone off here i didn't mean to.
You could always buy your own duplex. Then you could live in one side and have someone paying you to live on the other side.
I had a friend who really wasnt sure if he could afford a house, but he ended up buying a duplex after saving up 20% for the downpayment. Even with the insurance, he's paying about $150 less/month than he was when he was renting.
He will end up getting a house later on, and its nice to know for him that all the money he's putting into that house now as far as payments go, will eventually roll over to a house in the future.
-CodyMusic is like candy, you have to get rid of the rappers to enjoy it
