What's the word again? You know you're overpaying once Retail buyers start getting into a market?Originally Posted by Lewkowski
What's the word again? You know you're overpaying once Retail buyers start getting into a market?
Congratulations America
Hmm, just something I've never heard of before. And the kind of thing that seems tied to the health of the bank itself.
What is the overall strategy of the fund? Even passive funds have a strategy after all. If you don't mind my asking (feel free to just send over a ticket symbol if that's easier and you don't mind).
Your low property taxes, mortgage interest deductibility and relatively high capital gains taxes changes the game in my mind-- makes a more compelling case for owning the house that you will want in a few years.
What would the break-even point be for the refinance? IE how long would the lower monthly costs take to cover the fees? Though these days you can sometimes manhandle banks into basically charging no fees at all. My dad did that -- after all, the banks are making a buck off this whole transaction via the interest. They should eat the fees and he walked away from banks that refused until he found a nice local bank that did eat the fees.Maybe I should be asking y'all for investment advice, too.
Should I pay off my home mortgage, or try to refinance at rates less than 3%? Will the money I "save" be "safer" in stocks, bonds, ETFs, CDs, mutual funds, or what? Will the money I use to pay off the mortgage debt be returned if/when I sell the house? Which has the greater ROI? Should I try to age-in-place and use my home as equity, or sell and move?
PS: I'm an unemployed, single, early retiree, with no employer pension or benefits, with paltry SS benefits, and buy my own health care. I have two kids, one minor still in school, another "emancipated" but with investments I'd made as his Guardian. I can't/won't revoke those investments, because that's the decision I made for their education, and their futures. Once my youngest son is in college (or the military) I can use cash to remodel rooms into a granny flat, care-taker quarters, or rent the space to college students.
How should I proceed?
It all depends on the numbers, but can you actually pay off the mortgage and have some kind of financial cushion? Otherwise in a crunch you would end up just using the equity in the house for cash.
I could use today's dividend and capital gains tax frenzy to my advantage, pay off the mortgage, and still have plenty left over....for my "retirement".
In a crunch, that would mean even more home equity for loans (if needed) for my Old Age care. That's worth losing some financial gains, but only if the ACA means lower health insurance premiums and/or Medicare lowers its age eligibility, the housing market recovers, and my property taxes won't continue to escalate at 10-20% per year.
It's not really a "break-even" equation. At my ageinvesting means retaining capital for my (limited) future use, and carrying it forward. I'm not trying to earn tons of profits, but I also don't want to lose what I've already worked and saved for.
OR force my children to pay lawyers in estate or probate fees.
Sounds like it's basically impossible.
Just one question; why do you need to own a home when you are over 65? Is it really necessary to tie up your money in bricks when it makes more sense to rent and use the money as you need it? I really don't get this way of thinking that keeps people in debt-servitude all their lives. The other day I was reading about this 70 year old widow being worried about losing her home, which was worth about $140k with a $130k mortgage on it and a monthly payment of $1300 which she was behind on because of health expenses related to her husbands ill health.
The main difference walking away from her home would make in her life would be that she'd have a hell less of a headache with regards to her living arrangements.
Congratulations America
It sounds like she may have overleveraged.
But also remember that the calculation is slightly different for breeders because you usually have to invest in a home that has some substantial value behind it to raise your spawn. Also, housing is generally a good investment.
Raising yes, but ideally my estate would be zero or close to zero.
Congratulations America
Hazir, you're speaking as a European, with full pension and guaranteed health benefits. No wonder you can't understand the American experience.
That 70 yr old widow isn't necessarily required by law to sell her primary residence, in order to pay for medical debts incurred by her late husband. But the mortgage company can begin the foreclosure process after she's missed a couple of payments. Contrary to the "moocher" label tacked on almost half of Americans, most are loath to ask for assistance, or apply for medical bankruptcy.
That widow probably felt torn between her debt obligations. Hospital or Home? She probably figured (as most elderly do) that paying the medical professionals who treated her husband came first. And that her bank would give her some slack as a long-time client, or figure that it wouldn't gain them much to begin the foreclosure process in a depressed housing market.
Why the nitpicky hostility all over the place?
Fair enough, the benefits of being a non-breeder means no guilt about leaving your kids nothing.
Do you have a plan/list for how to spend a ton of money if you find out you only have six months to live? Lists are fun.
That woman now is paraded as yet another class of people who need to be 'helped' through getting the chance to stick her neck in the loop that once was around her deceased husband's neck. What would really help her would be a financial planner telling her to cut her losses and find herself a nice rental place for the $1300 a month she now has to pay to her bank and have some sanity in her last years on this planet.
I don't have such a list, I hope I don't need such a list because it seems like a condemnation of the years that went before.
Congratulations America
parents don't have this guiltFair enough, the benefits of being a non-breeder means no guilt about leaving your kids nothing.
"In a field where an overlooked bug could cost millions, you want people who will speak their minds, even if they’re sometimes obnoxious about it."
Look when I made my prediction. It was around $350.00 at the time. Nice return in 18 months...
I'm not being hostile. Nitpicking on Hazir and his Euro-centric attitude...of course.Why the nitpicky hostility all over the place?
He's made comments "all over the place" regarding health insurance, not understanding the US health care system. Comments about home loans, and retirement, not fully understanding the US tax codes, banking or housing industries. Commentary about buying home appliances, not familiar with US markets. Those are all investments on some basic level.
What euro-centrism? Stupid systems are stupid where-ever they exist. Allowing people to insure their health care costs only after they have gone without insurance for six months is stupid. Diggin yourself into a deep hole of indebtment is stupid. Not buying a perfectly good and well-priced appliance for no other reason that you have to look at an alternative outlet is super stupid. That's all very basic, too.
Congratulations America
Americans don't need to be reminded where our systems are stupid. When we ask opinions/advice/suggestions, it's because we still have to maneuver and make decisions within those stupid systems.
So I gave my opinion, buy Miele if you can afford it, buy LG if you want to spend less.
Congratulations America
That's a pretty tight calculation. How would you do that...not outliving your money, but not dying with too much money left-over?
As a breeder, the "raising children" part means only a couple of years left. At least in home ownership by school district, and being the "homestead" for my kids. I had planned to sell and move once the youngest had moved out, but now I'm wondering if that's the best choice? I like my home! It's private without being remote, enough land for gardening, lawn and trees, with wood-burning fireplaces (those are hard to find in new construction). It's old enough to have sturdy construction, style and charm -- that couldn't be replaced or replicated. Plus, it's mostly one-level living, with options for a tenant (or care-giver).
Where's the advice and recommendations?
I have no clue what the housing market is like, but based on your other posts it sounds like you could benefit from some downsizing. A tenant is a nice idea, except you would have to modify the house a bit (or accept someone all up in your stuff) right?
The housing in my zip code and township have held up pretty well, according to Zillow's tracking. The house was originally designed for some kind of two family or zoned living -- separate entries, water heaters, electric meters, septic tanks -- one of the bedrooms was used as a living room (no closet) with a Jack-and-Jill bathroom. They shared the kitchen, dining room, "main" living room, and basement "rec room", no door or barrier between the two sides. Hard to explain.
The owner before me integrated the 2 electric panels when upgrading circuitry (probably a building code requirement to be single-family dwelling). The septic tanks failed, now connected to public sewer. But it's still a two-sided house plan, so modifying would be easy and inexpensive. And against code, too.
Thing is, it's exactly what I'd be looking for to "age in place"....with private space for a helper, or caretaker, or some rental income....or an adult child if the economy tanks again. Property taxes are the bugaboo. Trying not to make an emotional RE decision I may regret, and other advice so far has been 50/50.
Major rally since we last talked about this. And now some pullback. I'm tempted to pull the trigger on a few things, but am wondering if it's too soon. What say you all?
Too soon. Panic at the announcement, either this is a minor correction, or people will put in thier big boy pants and calm the f down
Brevior saltare cum deformibus viris est vita
You seem to be suggesting that things will stabilize and asset values will increase once again soon. Isn't that a reason to buy?
I think there's plenty of reasonably concerning evidence that valuations are unreasonably high; it's also questionable how much longer we can achieve this kind of profit growth with rather tepid GDP growth. That being said, there's still a lot of fundamentals supporting asset prices, so it might not really be a peak. Certainly markets have been freaking out a bit lately (as has our own agamemnus), but I think those are mostly transient jitters after the euphoria about Japan and some concern about the pace of Fed monetary tightening. But re: Japan I think the euphoria was overdone, but the current malaise is also a bit much. After the election I suspect they'll implement a more aggressive reform program. Re: the Fed I think there's still plenty of mileage left in QE, and inflation hawks have been consistently discounted in favor of reasonable concerns about employment and growth. If we get a real recovery going, I'm sure the Fed will tighten policy, but I doubt they'll be too aggressive about it.
That suggests to me that asset prices aren't about to crash, and that selling right now - during this mini-correction/panic - is probably a waste. Selling in this general time period, though, given high asset valuations and issues with projected earnings growth, is not entirely unwarranted.
Of course, since my investment time horizon is measured in decades for the most part I have no interest in timing markets, so take my suggestions with a grain of salt. I'm not putting my money where my mouth is.
Sorry, when you said pull trigger I thought you meant get out of the market...I've been exhausted the last couple of days...
Brevior saltare cum deformibus viris est vita
Today I put a decent amount of cash into a variety of low-cost funds in energy, healthcare and a few other mid-cap funds. I generally agree with Wigin and I think there's a reasonable (~50%) chance I will regret this in the short/medium term. But my investment time horizon is very long at this point and I had saved/hoarded too much cash.
If the correction deepens I can put more cash into the market. But it's been doing nothing as cash for too long; the fact that I timed my two previous major investments really damn well has some level of dumb luck to it and I shouldn't be waiting for that to happen again.
Is this a good time to bust the comforting myth that "traditional investors" don't need to "time" the markets?
Put another way....fundamentals have changed so dramatically that Long-Term no longer means buying/holding for several decades. Regular people (aka retail investors) have been dragged into the arena of HFT, Day-Trading, and High Finance, which has shortened opportunity intervals and valuations by time.
Time is valuable. But the new principle favors transitional stages of principal (capital) fueled by uncertainty, fear, volatility. Older people hold the lion's share of physical assets and invested wealth. But they're a dwindling, dying group.
And before anyone calls me a luddite, or fearful of innovation or change....I'm simply saying that today's (young/new) investors should realize that "investing" has changed. It's not your father's Chevrolet, and neither is advice on car care.
Younger folks are faced with a huge challenge. They're responsible for older investor generations (and old models) as well as future generations (and new models).
Investing in stock markets for the long term still seems like a very reasonable "bet" to make, especially compared to all other options being suggested (EG cash in mattress, socialist revolution, etc).
Well, even "Investment" and "Long Term" mean different things today.
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