From the post Worth a look: Play gold without risking your investment - what do you think? a few posts down:
"I think the blog is made up of a bunch renters who are jealous of those around them who have homes and are trying to justify why they don't have one too.
Facts:70% of Americans Own Homes - Their average net worth is $185,000 (yes this includes their home equity) 30% of Americans Rent - Their average net worth is $4 GRAND.
I don't people on this blog have $10,000 to invest in gold. They are better off saving their cash for a down payment on a home, whether it is today, tomorrow, or 5 years from now. "
I believe more than a few HP readers are ones who wisely sold their overpriced homes, cashed in, and are on the sidelines renting, sitting on a pot of $$$.
True?
March 09, 2006
HP readers - defend yourselves from this attack
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58 comments:
I'm a renter and I have about $72,000 cash, another $13,200 in retirement accounts and over $6,000 in my checking account. If I didn't buy my brand new Infiniti G35 I would have had over $100,000 in total assets.
I guess I'm just jealous that I don't own an overpriced condo for half a million dollars here in Orange County, CA. I'm jealous of all those people who aren't enjoying life living from paycheck to paycheck. I turn green with jealousy when I think of them over dinner at Morton's.
I'm envious of those people whose marriages have fallen apart (I'm married to a hot Asian) because they argue over money and how they can possibly swing the outrageous property taxes.
I'm totally wishing I was like the girl in the cubicle next to me who is up to her eyeballs in college debt and has purchased her own condo with an interest only loan, and doesn't have two pennies to scratch together. She won't be saving for her retirement because she'll be too busy paying huge chunks of interest to the bank while gambling property will be going up when it's already starting to go down.
Yeah, I just I'm just a bitter and jealous individual.
I have a house (well, a mortgage) that I have no intention of selling any time soon, I run a popular CA housing bubble blog that argues that there IS a bubble and it is going to blow, and have over a million dollars in various forms (thank you .com bubble!) which does NOT include whatever this insane market says my house is worth.
You don't know what you are talking about. You're just trying to find a way to dismiss the housing bubble bloggers.
Owned for 4 years in California, cashed in last summer for 2.6 times my purchase price. Now I'm renting and waiting, completely debt-free with 100k earning 4.25% in a money-market.
Lets see.. I am 31 years old..I have $70,000 in cash, and about $100,000 in retirement savings. I have a 10 year old car and I have no debt..just paid of my college loans ($45,000K) last year. I currently make $110,000 a year and I am a renter.
My reasons for being a renter in simple: I was really in a position to buy a house over the last 2 years and I felt things were very overvalued. As a long term buyer..I felt that it was better to wait 2 to 3 years..and pay $100K to $150K less for a house and pay $30K total rent then buy now and be down net $70K to $120K.
If prices don't come down..then my thesis is wrong and I am screwed.
brilliant.
I’m ready to fight! FU Anon doubter.
I'm 29 y/o physics teacher and my wife is a 27 y/o engineer we earn a modest D.I.N.K income. Between the two of us we take home $4,500 /mo after taxes. We are happily renting in a Northern Colorado College town for $650/mo; 14% of our take home pay. Maybe we’re cursed by being the only logical thinkers in town, but why buy a house for 35-45% of our take home pay when there are cheap rentals to be found in a college town.
We have never bought a home and don’t plan to here in the next 2-4 years. We have $100k in retirement accounts (401k, 403b and Roths) and $80k in safely in cash (more than enough for a down payment). So these two happy renters have a NW at $180k, equal to that of the “average” home owner. Eat crow.
***Your factoid of the day is that there are 1,983 homes for sale in the city of Fort Collins proper which only has a population of 126,967.
I don't see the point in responding to this cretin. Who cares what he or she thinks?
But in the spirit of defending our brave gang of renters, here's my story.
I sold my SF Condo in early 2004, pocketing a tax-free gain of $200,000 after owning it for three years. I thought I sold near the top, but the market kept appreciating. Because I believed (and believe) there will be a historic buying opportunity in real estate in the next few years, and because renting is clmost comically cheaper than owning in this market, I chose to rent and invest my assets in the stock market. Though the real estate market did well in 04-05, so did my stock portfolio.
I rented a larger house in the same neighborhood for $3500 a month, which sounds like a lot but for big house in SF it is reasonable. Now I am living for a year in Sydney, Australia just for kicks, paying about US$2300 rent for a lovely furnished apartment with a harbor view.
I have about $750,000 in cash, about 2/3 of which is sitting in money market funds. I am an author, so I work for myself (and frankly, I take it pretty easy). I am married with a 2-yr old son. Until he reaches school age, my wife and I feel no particular need to be "settled down". Not owning has allowed us the freedom to pick up and move half way around the world for a year. We are happy, and we have our freedom.
Yes, I believe that over the long term, home ownership is an important component of financial success and independence. We will buy a home in the US in the next 3 years. I believe, as do many of the HP'rs, that we will see a once-in-a-lifetime real estate buying opportunity in the next few years. I also believe that many of the people who bought near the peak of this market (04-05) are going to end up owing the bank more money than their homes are worth. I am determined not to be one of those poor souls. Obviously, someone in my financial position can afford to buy a home, even at the market peak.
Some renters may be jealous of those who bought homes early in this boom and were rewarded. Sure. However, whether there is jealousy is not really the point. The question is: what should people do now. If they rent, should they buy now? That, in my view, would be a grave error. If they own, should they sell now? Depending on life circumstances, I believe that would be a wise decision for many homeowners.
In my case, I am renting because I have studied the market carefully and I am convinced that renting is the smart money. I am not impressed with the "conventional wisdom" that buying is always better than renting. I have seen too many cases in which the conventional wisdom was not only wrong, but perversely wrong. I have seen many cases in which the contrarian instincts were the route to financial success. HP'rs are the contrarians in this market, and we will be proved right. We will bide our time, protect our cash, and wait for the right part of the cycle. If we are right, that part of the cycle will come sooner rather than later.
I sold my CA home in 2002. Rented for a year, then became a buyer (cash) on a foreclosed home in NC. Then bought the house next door (ok, financed this one) when the owner who had moved to CA needed to sell... the lease/option people in it had bailed on her!
Still, I got them both under market, as distress sales, because I was patient and didn't let the "buy now or be priced out" mentality get to me.
Oh yeah, and I rent the house next door now, for more than the mortgage. Try THAT in CA.
The basher is obviously new to the scene and haven't read all the posts from people like me who use to own and sold a few months ago. Not only do I see a lot of people on the message boards who have done so, there are a few coworkers around me who have done the same thing.
We cashed out and are waiting for 2009+ to repurchase. Maybe you don't believe us, but that's fine.
everyone here must make $80k plus and up then.....
Income: $80,000 and up
Owners' average net worth: $451,200
Renters' average net worth: $87,400
Income: $50,000 to $79,999
Owners' average net worth: $194,610
Renters' average net worth: $25,000
Income: $30,000 to $49,999
Owners' average net worth: $126,500
Renters' average net worth: $10,600
Income: $16,000 to $29,999
Owners' average net worth: $112,600
Renters' average net worth: $4,240
Income: Under $16,000
Owners' average net worth: $73,000
Renters' average net worth: $500
does anyone on this blog make real money? making a couple hundred thousand a year is good if you live in ohio...it doesnt buy you sh*t in the new york city area...and you are 30 something and you dont have a million in the bank? what the hell are you going to retire on?
ok ok I'll byte, I am a 39 year old civil engineer in mass., I own a home I bought in 1993 with $10,000 down to the tune of $86,500. Three bedroom colonial 2 full bath you get the picture, in a nice town. I have no credit cards (8 years and going), I owe no one nothing, not even a car payment...bought paid in full (2cars)2 kids, wife home with the kids, I work 2 jobs, and have $25,000 in cash, $80,000 retirement savings, all that on a magic number income of (drum roll please) $76,000 a year. oh and I never refinanced the home, I am all set with being paper rich, life is to good to owe anyone. I'll be at your front door with an offer on a 2 family in about another year or so.
Actually, just got word my neighbor sold her house for 439k. Bought in 1 month before me in 2003 for 217k. 222Gs in 2.5 years is not a a bad piece of chunk change I would say.
Boasting about ones finances is tacky. Enough. It should be private info.
It should be private info.
Your privacy got revoked the minute you clicked that mouse button, why should here be any differen't, IE: patriot act.
but we americans are up to snuff on that issue right...(ya right)
So, can everyone answer this:
1) what you make
2) how much in the bank
3) did u cash out, if so, how much
4) what type of work u do.
many thanks.
"So, can everyone answer this:
1) what you make
2) how much in the bank
3) did u cash out, if so, how much
4) what type of work u do."
Like my dad says, if you have to advertise it, you prob dont have it. Real richie riches keep it on the down low.
this is the internet. people lie. Only believe 75% of whats being posted. Same guy prob has a myspace.com page picking up lil girls.
A $650,000 dollar home with no money down is a lot of mooola. Do these folks really expect to ever pay this back?? I don't feel rich when I'm $650K in debt.
Also, how can the price of a house double in 5 years? The house is 5 years older and nothing has changed. This is just inflation to me. Isn't money worth anything anymore?
Ok, I'm in. mid 40's couple with a small child and dog. We sold several rental properties and a couple of upper end homes over the past few years. I built and sold a condo complex as well. The only thing we own besides a 98 jeep is a rock star motor home we travel the country in (I'm retired, raising my child,until further notice), no rent except for various RV park charges,no state taxes. We have a few million invested in gold, silver,mining stocks and treasuries. We'll build something as soon as I suspect a bottom has been put in (08-09?) and we find a location that meets our criteria for living. We are still enjoying the traveling so certainly no hurry. I've really enjoyed this blog and am mostly a lurker although I sometimes throw in my 2 cents. I also worry about friends and family who haven't positioned themselves for this historic downturn. Good luck to all
i just want to understand who reads this blog...it sounds like the typical person is male, mid 30s, making 50-75k year, most likely recently sold real estate, 100k in the bank, blue-collar or operations worker, and probably lives in the midwest, or non-urban areas....does that sound about right?
doubling in 5 years is inflation...? what planet do you live on...? jack @ss!!
Yup, I pocketed $475K from selling my house in October; I'm renting a comparable house now for probably half of what my buyer's monthly payment is.
I'm aggressively playing the stock market in hopes of building my cash in preparation for building a nice big place in the woods in a year or so.
I agree that discussing personal financial information is in poor taste. However, to do so anonymously for the purpose of making an argument or sheding light on an issue (like rent vs own) is fine.
The original troll got the correlation/causation equation wrong. Of course owners are richer, on average, than renters. But in most cases, they are rich for other reasons, and the poor are poor for other reasons. Lower income, primarily. But for those who really have gotten rich by owning homes or trading up, I think you will see a lot of people actually get poor as a result of owning real estate, while many renters, including people on this board, will manage to save their cash through the bust.
I tried to buy the condo I was renting, a year ago. Being a recent college grad with basically no net worth, I was totally shut out of the market. I happened to know the price had appreciated 50% in the prior 4 years. For a 1200ft condo, this struck me as extreme. So rather than bending over backwards to buy, I stayed away, and simply moved to an apartment.
I don't regret it.
I am an owner upstate NY forced by my wife to build an addition with about 250K construction costs. Plenty of cash but I felt terrible about paying for construction near the peak so hedged by going short HBs. Gravitated to your board as a great educational tool, thanks.
all these responses are idiotic........
like anyone will say "i make $65k a year, pay $700/month in rent, and have less than $3000 in savings"
oops - i just said it
i wish i owned a home but honestly i am not going to put less than 20% down.......does anyone know where I can buy a $15,000 home?
at least the troll had his facts right.....found this on bloomberg.com
Homeowners had a median net worth of $184,400 compared with net worth of $4,000 for those who didn't own homes.
Here's the link:
http://www.bloomberg.com/apps/news?pid=10000087&sid=aiA0uhk_KmOI&
refer=top_world_news
I bought in '97 (orange county ca) for $120k (foreclosure), sold too early in 2003 for $575k, place is now worth $750-$775k(??), but I have no regrets. I currently live in a place worth (!?!) $1.45MM and pay just $2000 in rent, not such a bad deal since the interest in t-bills on the cash raised from the house I sold now generates most of my rent in interest income. Kind of like living rent free. I'll buy it back after a 50+% fall.
You should hear my young co-workers who "had to get a starter condo last year". They are so broke and paying for food with credit cards. Always stressed about money, talking about selling but knowing she cannot get what she paid last year in San Diego.
I feel bad for her, living in a horrible area just to afford a condo. Meanwhile I live on the beach for 1/4 what she pays to live in the ghetto.
She doesn't own a condo, the condo owns her!
Just for the record:
42
Lawyer
About $105,000 per year in a secure position (not working for developers)
Bought a house in Phoenix near downtown for what I thought might be a top of the market price in 2003.
Thought about selling last year when I realized it had doubled. Probably the most rational thing to do, but decided to stay because I like it here and I've put a lot of work into the yard.
Substantially cash-flow positive. Refinanced into a 15 year fixed last year and planning to pay it off. Installing solar electric system this year.
Hedging against housing panic by shorting the crap out of homebuilders, mortgage lenders, etc. Doing pretty well with that.
Borrowed everything I could out of the 401K because the fund options suck. The super safe short bond fund is actually mortgage securities, etc.
Net worth (aside from the house) is probably only about $20,000. Cash and gold on hand plus investments are offset against long-term, low-interest student loans. Don't want to pay off all the debt because there's a good chance inflation will take care of it for me.
I worry about people who aren't prepared for what's coming, but not very much. I figure America voted for an old school Argentinian strong-man type system, and that's exactly what we're getting.
I'm a millionaire myself - and I'm renting. I sold my house. I didn't get rich doing stupid things and I don't plan to go back to being poor anytime soon.
I am renter with 190K in cash and adding 40K per year (on average)
plus another 50K in retirement accounts. I am renting rather than buying simply because I am not stupid. It's as that simple as that.
Here's the simplified version of the no-way-to-lose move for the middle of this decade. It will basically set you up for life, if you have lots of home equity right now.
Sell your overpriced real estate, find a nice place to rent, and put all your money into commodities and natural resource companies, with a big emphasis on precious metals.
There are two basic scenarios and a whole range of possibilities in between:
1. The best case scenario for real estate is that it will be flat for the next five or ten years, in which case commodities will soar because it will take Herculean dollar creation/debasement to keep real estate from imploding.
2. If housing really tanks, that means we've got a big recession or worse and precious metals hold roughly steady while many other commodities fall back.
Either way, in three to five years convert some of the commodities back into real estate and you'll be in fantastic shape.
I'm a renter. I'm not jealous of my friends who own homes. I'm glad I don't have to clean a house, take care of a yard, furnish a house, and spend 1/2 to 3/4 of my take home pay a month for housing related expenses. This weekend I'll be taking a fishing trip while my homeowning friends are sitting at home watching TV because they can't afford to go out or have to do yard work.
I'm not wealthy in any sense of the word, but I have enough cash to live at my current level of expenditures for 22+ months without taking in another dime.
My deal... I make between 150k and 200k per year. My girl makes about the same. We live in Manhattan Beach. We don't own because we can't afford to own. 350k a year does nothing around here. Instead we rent a very average place and tuck away over 12k a month.
One day the market will turn and we probably still will not be able to afford anything around here, but we'll find something nice in the surrounding area. The one wild card is if we can pull enough money out of the equity markets as the knife falls.
I rent and have about $600K in a couple of stock portfolios (mostly in the bankruptcy industry, divy plays, and value stocks), in savings instruments, and in one overseas rental property that cash flows. I quit my day job a year ago, have been living off the cash flow and portfolio gains and spend my time with my kids. I have no need to defend myself. Mass delusions frighten me. Unfortunately, I've begun to accept that self-delusion on a massive scale is part and parcel of the corporatized modes of being that have people spending their lives in cubicles "for my children!" and converting the hours of their day into things to go into landfills. We live in a Brave New World where we've internalized the notion that feeling good is much more important than actually living. Many Americans actually believe Bu$hco's foreign policy can accomplish something other than radicalizing many many new terrorists--an absolutely absurd belief in any rational world, pure self-delusion. I think our culture of mass delusion leads to bubble after bubble. When this one bursts, how far behind will the next one be? Nobody buying houses in California in 2006 could possibly be making a reasonable cost benefit analysis. It costs half as much to rent, and when one considers the obvious depreciation, it probably costs 10% as much to rent. AND the real difference between renting and owning has been reduced to paying rent to a landlord or paying rent on a pot of money from a lender. The decision making process for home buying is clearly 100% emotional and 0% rational at this point. This is why real estate adverts show photos of Buffy the Realtor(tm) instead of meaningful data one might use in a cost benefit analysis. This scares me. I used to call it stupidity, but now I call it mass delusion. It is more basic than simple stupidity and more dangerous. I won't defend my fear of mass delusion. That fear is justified. The mechanism behind the current delusional beliefs that real estate can just keep rising when current prices are already unsustainable is no different than the mechanism of the mass delusions that resulted in 100 million deaths during the 20th century. Grossly irrational behavior will be the undoing of my society. So far in the 21st century, we seem to be at a point of open rebellion against reason.
By the way, just to elaborate on how ridiculous prices have become in Manhattan Beach. Empty lots semi-near the water that are 30' x 90' feet are well north of 2 million dollars. Building costs are in excess of $300 sq foot. I can't explain why building costs are so high, but they are.
I keep hoping the slow down will hit this area, but so far it hasn't. An absolute dump down the street just sold for $2.7.
waiting bubble rubble...
What bankrupcy companies?
1) what you make
1.2MM in 05, on pace for 700k in 06
2) how much in the bank
430k in retirement, 225k in market, 4.5k in bank
3) did u cash out, if so, how much
cashed out in 98 for 300k, purchased current home in 98 and rental property in 02
4) what type of work u do.
investment banker
I read the blog to keep track of housing as I have a strong interest in business and the economy and I think the housing slowdown will be a huge drag on the economy.
I am well into the top 1% of earners as a business owner. I made good money selling my home in late 05 (bought in 01) so I'm definitely not a jealous renter. I do rent now and will look to buy again in a year or two.
What do you guys do with all this money? I am 37 and I live in Silverlake Ca (hollywood) and I make.......30,000 a year. My rent is 365.00 a month for a one bedroom hard wood floors, great view. I got in before the rents went up and I also do part time managing so my rent is low.
I work as little as possible 4 months a year, doing organic garden maintence and painting in Hollywood film. I am into organic gardening in order to weather the upcoming petrol collapse. Food production in cities is going to become very important.
I would love to have all of the money, but like someone said earlier I was not in a position to earn a lot of money, so I did not have the problem of rent vs buy.
I have a great girlfriend and we play in the garden in the courtyard of the apartment with our cats. It is very nice. My only regret is not having more growing space. I come to this space HP to learn when all of the nuevo rich are going to become adjusted.
So the bubble is just a hassle I have to deal with because my rent goes up, but my pay doesn't.
I pray for the pop so people can come back to reality.
All this talk reminded me of this great column by Bill Bonner, entitled "The Lonely, Dorky Renter":
http://www.lewrockwell.com/bonner/bonner85.html
Pity the poor renter. He might just as well drive an old economy car and buy his clothes at the Goodwill. He is the sort of man you wouldn't want your daughter to date, let alone to marry. He is the poor loser who forgot to buy tech stocks in the late '90s...and now he is missing the real estate bubble too. He is the quiet, lonely dork who never gets invited to parties...and has nothing to say...except an, "I told you so" he has been holding onto for years...waiting for the right moment.
But, his time will come.
Money issued at interest by the Fed
This is part of a transcript of a conversation between Dan Benham (realdemocracy.com) and "Mr. Ron Supinski of the Public Information Department of the San Francisco, Federal Reserve Bank … on October 8, 1992."
CALLER - Where does the Federal Reserve get Federal Reserve Notes from?
MR. SUPINSKI - They are authorized by the Treasury.
CALLER - How much does the Federal Reserve pay for a $10 Federal Reserve Note?
MR. SUPINSKI - Fifty to seventy cents.
CALLER - How much do they pay for a $100.00 Federal Reserve Note?
MR. SUPINSKI - The same fifty to seventy cents.
CALLER - To pay only fifty cents for a $100.00 is a tremendous gain, isn't it?
MR. SUPINSKI - Yes
CALLER - According to the U.S. Treasury, the Federal Reserve pays $20.60 per 1,000 denomination or a little over two cents for a $100.00 bill, is that correct?
MR. SUPINSKI - That is probably close.
CALLER - Doesn't the Federal Reserve use the Federal Reserve Notes that cost about two cents each to purchase U.S. Bonds from the government?
MR. SUPINSKI - Yes, but there is more to it than that.
CALLER - Basically, that is what happens?
MR. SUPINSKI - Yes, basically you are correct.
CALLER - How many Federal Reserve Notes are in circulation?
MR. SUPINSKI - $263 billion and we can only account for a small percentage.
CALLER - Where did they go?
MR. SUPINSKI - Peoples mattress, buried in their back yards and illegal drug money.
CALLER - Since the debt is payable in Federal Reserve Notes, how can the $4 trillion national debt be paid-off with the total Federal Reserve Notes in circulation?
MR. SUPINSKI - I don't know.
CALLER - If the Federal Government would collect every Federal Reserve Note in circulation would it be mathematically possible to pay the $4 trillion national debt?
MR. SUPINSKI - No
CALLER - Am I correct when I say, $1 deposited in a member bank $8 can be lent out through Fractional Reserve Policy?
MR. SUPINSKI - About $7.
CALLER - Correct me if I am wrong but $7 of additional Federal Reserve Notes were never put in circulation. But, for lack of better words, were "created out of thin air " in the form of credits and the two cents per denomination were not paid either. In other words, the Federal Reserve Notes were not physically printed but, in reality were created by a journal entry and lent at interest. Is that correct?
MR. SUPINSKI - Yes
CALLER - Is that the reason there are only $263 billion Federal Reserve Notes in circulation?
MR. SUPINSKI - That is part of the reason.
CALLER - Am I mistaking that when the Federal Reserve Act was passed (on Christmas Eve) in 1913, it transferred the power to coin and issue our nation's money and to regulate the value thereof from Congress to a Private corporation. And my country now borrows what should be our own money from the Federal Reserve (a private corporation) plus interest. Is that correct and the debt can never be paid off under the current money system of country?
MR. SUPINSKI - Basically, yes.
CALLER - I smell a rat, do you?
MR. SUPINSKI - I am sorry, I can't answer that, I work here.
I laugh at all you so called six figure savings people, taint worth shit in reality!
Anonymous said...
Money issued at interest by the Fed
There is no doubt in my mind that ALL currencys are fiat script.
However, you can test its value by going into any establishment and demanding some of the "worthless" paper. Or better yet, test the muscle behind the currency. Trust me, it is backed.
Jealous renter?
Not quite.
I bought a house in San Diego (small & crappy but reasonably central) in 2000 for a then outrageous $279k.
Original rate 8.125, refi'ed to a 5-fixed ARM at 5.5%. Starting to read the "bubble blogs" and getting more edumacated got me to re-fi at 30-year fixed for a fantastic 5.25%, which I think was the bottom. No money out.
Substantial investment account---though it was made entirely during the Clinton years and has stagnated with fluctuations from 2000.
bad: newly unemployed for the first time in my life ever, and I'm in a very difficult to place field (theoretical physics/statistics). New wife also unemployed.
I absolutely can't wait until prices collapse in SD to get a somewhat nicer house. Problem is that I doubt the rate would be anywhere near as good.
Of course a good job would be nice. In best case I *was* making $63k 10 years out from PhD. Future looks much worse.
My wife and I make 200k a year, mid 30s.
Assets: 150k saved in 401K (mix of mutual funds and bonds). 5k in cash for emergencies. 70k in stocks. We are paying on a modest home (1450sqft, 3/2/2) and have about 55k equity in it. We own both cars outright.
Debts: 85k in student loans. 8k in credit card. 95k mortgage balance left on house.
We are glad we bought our house and no longer rent one. It has not appreciated much over the 6 years we've owned, but it is no more expensive from a cash flow perspective to purchase than it was to rent it. But purchasing it, we gain about 6k in equity through mortgage payments every year and maybe another ~3k a year in appreciation. So for the same negative cash flow (1300 a month includes hazard and taxes), we get to build equity over the long haul.
I am still bullish on housing in my area, since we haven't experienced the same sort of housing bubble the rest of the country has seen. In a couple of years, I'll purchase my next home.
Just sold my home 2 weeks ago I bought end of 2003 for a profit of almost 240k. Paid off my student loans, new SUV, credit cards, completely debt free. Rest is invested. I am renting a new house in the hills for less than I was previously paying on my mortgage. Waiting for the bottom to get back in.
Software Engineer making 90k year, 2 small kids and a stay at home wife.
I sold my overpriced unimproved two flat in Chicago last October and walked away with $175,000 cash. I presently live rent free by trading labor - I'm a union carpenter-cabinetmaker who has worked on rental properties for thirty years- for an apartment for the duration of the repairs. I have no intention of buying real property again.
My wife and I moved to Orange County two years ago and immediately predicted a bubble. We are a middle-aged professional couple, income in the mid-six figures, assets of over a million. We qualified for a loan of about 6 times our annual income. How crazy is that! Instead, we are renting a wonderful place for about 40% of what our monthly mortgage and tax payments would be if we purchased it, and investing our money elsewhere. Meanwhile, our landlord is starting to lose equity on the home, which he bought to hold for a couple of years and flip. We still own the homes in the three cities where we lived before we moved here and we actually get positive or break-even cash flow on each. We really dodged a bullet by not buying into the California market at the top of the bubble!!!
Feel so sorry for all the young couples who are broke from making house payments. We are afraid they are looking at a decade or more of no housing appreciation, stagnating salaries, limited choices (can't get by on a single income when they start a family because of house payments, can't move because they are underwater, etc.). There is nothing wrong with putting off homeownership for a few years and enjoying life. Instead, all these young people bought in to the "if we don't get in on the market now, we never will" myth.
Bankruptcy companies like FCN, PRAA and others. I'm starting to take profits lately, as they've had quite a run in the past 18 months. Judging from the absurd level of debt and negative savings rate, these guys will have a bit longer to go however.
I would really like to encourage all of you who still work for corporations to read the Robert Kiyosaki books. Ultimately, cash flow real estate is the way to go. However, in California nothing will cash flow again probably until 2008, when the number of foreclosures hits 50,000 or so, and even then it's going to be tricky because of demographic changes. However, I still think that's less risky that expecting many corporate jobs to exist beyond 2009. I don't think the mainstream has a clue about the shape or degree of the transformation underway.
Sold in late 2002 (I know, I know, it was too early, but I saw the handwriting on the wall and didn't want to wait, no regrets here) and now have $200K in the bank. Can't wait to buy at twenty cents on today's dollar. I did it last time in the last crash.
I'm 38 and have owned/own four houses since 1996. These houses/properties were/are located in Park Slope, Brooklyn; Metuchen, NJ; in rural Pa; and Seattle. My wife and I purchased these homes as fixer uppers because they were within our budget and their "tired" conditions allowed us to make physical changes (to our taste and living comfort) that couldn't be justified in newer/fully renovated homes. Coincidentally we made profits on them, but that wasn't our intention when we bought them.
Profiting from real estate is fine, but how stupid or greedy does an individual have to be in order to buy an over-priced, cookie-cutter condo or a spec home at peak market in a hideous town and assume it's gonna appreciate 20% over night because that's what everybody say?
Robert Kiyosaki is a charlatan. Most of his personal story is BS. "Rich Dad" was never a real person. He isn't worth 1/5 of what he has claimed he is worth, and most of his wealth comes from his books and paid appearances. Much of his advice, like skip school, is perverse. A lot of his basic arguments are uncontroversial; the same crap you get from anyone else in the personal finance racket.
I am a homeowner and a real estate investor and if I was not a homeowner by 2003 I wouldn't have bought anything. What upsets me is the fools who have come into real estate investment in the past few years who don't know crap. These people have screwed it up for the professionals. And the crazy borrowing "tools" out there are making things worse. 40 yr loans? Interest only loans? Are you people out of your mind?
sold in socal late 04 rented for a year , moved to maui hawaii. today i was on the the beach at the grand wailea awesome. someday i will move back to the mainland. people putting money in 401k plan etc are risking their hard earned money. live now not later. stocks mutual funds are risky and you pay fees. find cashflowing property or gold,silver etc. hoping some scumbag broker secures your investment forget it. your going to put money in a 401k so when i'm 70 i can finally spend it. sure. for robert kiysaki whatever he a big BSers but he has the right idea.
make sure when you cash in you what out for the vultures. brokers,friend, family, try to take your money while they still own etc. have all loan, deals, written up check out by your trusted attorney.
This is not anonymous: Anonymous said:
"at least the troll had his facts right.....found this on bloomberg.com
Homeowners had a median net worth of $184,400 compared with net worth of $4,000 for those who didn't own homes.
Here's the link:
http://www.bloomberg.com/apps/news?pid=10000087&sid=aiA0uhk_KmOI&
refer=top_world_news"
Asswipe, that's because they bought 5 years ago and the price of the house doubled, but as the credit dries up, the price/equity/networth also goes away, possibly to the point they're upside down. This networth wealth you talk about is what people have been taking out in home equity loans, you know, paying more money to borrow their own money, which is reall bubble money which will dry up. Sounds like a real party. Effing moron.
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