How are people dumber than us going to make out with their 401(k)s?

[outtamojo]

[quote=flu][quote=bearishgurl][quote=harvey]. . . But please – just for entertainment value – do tell us how we are supposed to save for the long-term without using the investment markets.[/quote]

A suggestion was made earlier here (AN?) to do “CD laddering.” That’s one way. Another way is rental houses. I’m not talking about highly-encumbered ones (HOA/MR). I’m talking about buying a fixer-upper, spending 30-60 days in your off hours to clean it up and then leasing it. Got $150K?? There are plenty of places in SD County where one could buy a house which, after fixed up a little ($5-8K + elbow grease), one can make a steady $1300 – $1600 mo off $160K ($150K purch + closing costs + fix-up $$). Know anywhere else you can do this??

Afraid of getting off the fwy and looking around? Bone up on your “people skills” a bit, pri ;=]

It’s doable.

I wouldn’t have thought so just a year ago.[/quote]

Confused here…

A few weeks ago when were talking about Mira Mesa, I recall you were telling folks how horrible idea was to be buying rental property in Mira Mesa or investing in Mira Mesa at this point because prices were so high.

But now you’re suggesting folks pick up rental property, right now… when inventory is close to 0, when multiple people are bidding on rental properties and pushing the cash flow-ability(I know not such a word) up and up?

Or suggesting a CD ladder right now, at a time when interest rates are at a historic low, for which people are going to be locked in for some time….

I don’t get this….

I think there is one fundamental point that’s not being grasped here.

No risk = shitty returns…[/quote]

For us contrarians that would be “no PERCEIVED risk = shitty returns.

[Coronita]

I think some folks (inclusive) spend way too much time working for someone else, and not nearly enough time taking what is earned and taking care of oneself….

Typical mold:Go in, get a paycheck, pay your taxes, pay your bills…Surf the internet, do some work of what is asked of you. Rinse and repeat…Probably not gonna be very helpful to move forward.

I’ve decided to take some of the w2 income, take some chances to move forward and break out of the sorry ass predicament I (and a lot of w2 incomers) are in. If I go down in flames, lose money what not, whatever. I’m in no worse shape than everyone else who are on w2 and have to pay taxes (albeit a lot less with losses ha ha)…But at least I have the opportunity to break out of the fvcking mold.

Regarding retirement? Define retirement? Do people really plan on not doing anything after a certain age? Just kick back and do nothing? My parents tried that for a few years. They were about to kill each other….

BG, some of us younger people are smarter than you give credit for. A lot of us has no interest in paying for your entitlement benefits.

[Coronita]

[quote=outtamojo]
For us contrarians that would be “no PERCEIVED risk = shitty returns.[/quote]

…unless you have a public pension and then it’s more like

“great returns for me no risk for me, and all the risk to every other taxpayer”

which is why I guess folks who have them don’t want to give them up…

[blahblahblah]

Now imagine what happens when the retirement system fails for 50, 60, 70 or more percent of the population. They are going to be very jealous of your rent houses, 401K balances, etc… How dare those “rich people” have all this stuff! They will demand that something be done, and TPTB will be more than happy to help them — by relieving you of your goodies, of course… They will use sneaky methods, like property tax increases (Prop 13 will not be popular once few are able to afford homes), raising the age at which you can withdraw from your 401K, devaluing the currency, etc… They have a large bag of tricks.

If you want to see the future of the US, just visit Brazil. Huge underclass, small middle class, and a tiny elite that manages the whole affair from their helicopters, private jets, and island getaways.

At least here in SD we will still have good weather!

[bearishgurl]

[quote=kev374] . . . And, this generation cannot count on Social Security at all! And who knows what will happen to Medicare, that may not exist too![/quote]

Neither can boomers currently under the age of 60…at least not for their ENTIRE lifetime from age 66 forward. Yes, a portion of boomers are locked out of collecting SS at age 65 – those that are born after August 8, 1956.

[quote=kev374]The problem with the previous generation is that they preach everything, the fact is that they have just been RIDICULOUSLY lucky to have SOLID jobs with pensions, low costs of living throughout their earning lifetime, a super stable job market relatively speaking, low cost for housing and all entitlements intact – SS, Medicare etc. That is not the situation for the current generation.[/quote]

kev, those SOLID jobs were not the “glamour” jobs of today, nor did they have anywhere NEAR the working conditions of today OR employee-friendly laws in place (FMLA for example). Sorrento Valley either did not exist or was ONE dead-end street with four bldgs on it (circa very early-eighties). Most retired “boomers” in SD that DID NOT retire from the government retired from “head-down” positions such as assembler/mechanic from Convair, General Dynamics, NASSCO or Rohr. SD was a manufacturing town and the majority of contracts were with the military.

The Gen X and Gen Y family-consumers of today CAN live frugally and save but most choose NOT TO! Boomers had no other choice, due to lack of as many options, products and new housing tracts to choose from as young families of today have.

It’s all relative.

[no_such_reality]

[quote=bearishgurl]
kev, those SOLID jobs were not the “glamour” jobs of today, nor did they have anywhere NEAR the working conditions of today OR employee-friendly laws in place (FMLA for example). Sorrento Valley either did not exist or was ONE dead-end street with four bldgs on it (circa very early-eighties). Most retired “boomers” in SD that DID NOT retire from the government retired from “head-down” positions such as assembler/mechanic from Convair, General Dynamics, NASSCO or Rohr. SD was a manufacturing town and the majority of contracts were with the military.

The Gen X and Gen Y family-consumers of today CAN live frugally and save but most choose NOT TO! Boomers had no other choice, due to lack of as many options, products, new housing tracts to choose from as young families of today do.

It’s all relative.[/quote]

+1 BG, you are spot on.

One minor nit, the current Gen-X/Gen-Y cubical jobs (marketing, IT, software development), they’re head down, non-glamours, assembly line work. More leeway due to things like FMLA and employment law but a whole lot more uncertainty in the job or any equivalent job being here tomorrow. (particularly, here as in California).

Rental management, a small business (and government headaches that go with it), are the way to go.

[bearishgurl]

Yes, flu. I stand by my assertion and $400K in WAY TOO MUCH to pay for a “bread and butter” (as AN would call it) rental house, ESP in MM! I won’t speak for AN but he would probably agree ;=]

$100K – $250K (w/o MR and HOA) is a MUCH more doable price point where the owner wouldn’t be sucking swamp water with taxes and fees thru the inevitable vacancies (referring to free and clear owners here).

[bearishgurl]

[quote=no_such_reality]…Rental management, a small business (and government headaches that go with it), are the way to go.[/quote]

I’m a RE licensee, a licensed paralegal and an ex-gubment “bureaucrat.”

Lay it on me.

Signed,

bearishgurl “red-tape” Morgan

[bearishgurl]

I like an “investment” that I can see and touch (tangible), such as that “cute” 1188 sf light green battenboard house down the street that needs a roof (and probably a few other things).

But that’s just me.

[Coronita]

[quote=bearishgurl]Yes, flu. I stand by my assertion and $400K in WAY TOO MUCH to pay for a “bread and butter” (as AN would call it) rental house, ESP in MM! I won’t speak for AN but he would probably agree ;=]

$100K – $250K (w/o MR and HOA) is a MUCH more doable price point where the owner wouldn’t be sucking swamp water with taxes and fees thru the inevitable vacancies (referring to free and clear owners here).[/quote]

BG, that’s not what I was saying. When folks were talking previously about opportunities in various areas including MM, you immediately were like “terrible investment all around,etc,etc,etc”…

Did you check the followup to this thread?
http://piggington.com/mira_mesa_house_went_into_pending_should_i_close?page=1

I’m sorry. But you talk a lot about how things *should* be. But when it comes to these opportunities, things are always 100% clear in hindsight.

So, I just don’t get what your plan is to be an experienced RE landlord without a willingness/understanding of how the markets are actually working, because it’s not as simple as just waking up one day, saying I want to buy that property that yields a 10%+ roi, and be done with it…If it were THAT easy, a lot of people (including me) would be all over it.

It’s the same blanket statement about investment vehicle X (in this case 401k) being completely bad. It’s these personal bias that are really gonna kill one’s investments and opportunities imho, because these are subjective opinions, not necessarily based on what is happening or facts.

Just my 2 cents.

[Coronita]

[quote=bearishgurl]I like an “investment” that I can see and touch (tangible), such as that “cute” 1188 sf light green battenboard house down the street that needs a roof (and probably a few other things).

But that’s just me.[/quote]

Why does an investment have to be “cute” in order for it to be a investment? It seems like we’re mixing up personal consumptive item (something personally you would occupy) for something to is suppose to produce a return.

Hey, as much as I think MM is a great opportunity (well, was 3 months ago), I wouldn’t want to live there (no offense AN……If’s a fine area….Just my personal preference…)

[bearishgurl]

[quote=CONCHO] . . . If you want to see the future of the US, just visit Brazil. Huge underclass, small middle class, and a tiny elite that manages the whole affair from their helicopters, private jets, and island getaways.

At least here in SD we will still have good weather![/quote]

Uhh, concho, I intend on managing my “stable” of “elite” rental homes (hopefully always full of regular-folk tenants) from my lofty “New Balance” jogging shoes. I don’t know about Brazil but American landlords who live in or near their rentals (there are millions of them, btw) don’t have any of that stuff. They collect rent on foot or in their well-maintained 1986 Buick or 1991 Toyota.

I have found throughout life that the most prosperous people are usually the ones you would never suspect are worth anything at all.

[bearishgurl]

[quote=flu][quote=bearishgurl]I like an “investment” that I can see and touch (tangible), such as that “cute” 1188 sf light green battenboard house down the street that needs a roof (and probably a few other things).

But that’s just me.[/quote]Why does an investment have to be “cute” in order for it to be a investment?…[/quote]

I was being facetious. Actually, battenboard can be a maintenance headache and I personally prefer a dwelling that is 1750 to 2200 sf, although without kid(s) I would probably be fine in +/- 1400 sf.

[bearishgurl]

[quote=flu]…I’m sorry. But you talk a lot about how things *should* be. But when it comes to these opportunities, things are always 100% clear in hindsight.

So, I just don’t get what your plan is to be an experienced RE landlord without a willingness/understanding of how the markets are actually working, because it’s not as simple as just waking up one day, saying I want to buy that property that yields a 10%+ roi, and be done with it…If it were THAT easy, a lot of people (including me) would be all over it….[/quote]

I don’t intend on making offers on listed properties. I know where the longtime “vacants” are in three “target areas.” Some have been “vacant” as long as ten years and regularly have the weeds mowed down in front to avoid municipal fines. I will approach and re-approach those owners with cash offer(s). Some are now getting to the point where their 60-70 yo “kids” are having to make decisions for them. Perhaps some will now come to their senses.

I will be targeting “free and clear” properties (w/o all the “flipper” competition). Only persons intimately familiar with these “hoods” would know about these opportunities.

That’s why as a potential RE investor, you have to keep your eyes and ears open. But this is hard to to when one lives in an area that is surrounded by newish housing tracts for miles around and is not familiar with older areas. You’re using your (expensive, MR-built) parks and trails for your daily walk instead of walking in the ‘hood ;=]

You can’t learn about possible viable “investment opportunities” doing that.

[Coronita]

[quote=bearishgurl][quote=flu]…I’m sorry. But you talk a lot about how things *should* be. But when it comes to these opportunities, things are always 100% clear in hindsight.

So, I just don’t get what your plan is to be an experienced RE landlord without a willingness/understanding of how the markets are actually working, because it’s not as simple as just waking up one day, saying I want to buy that property that yields a 10%+ roi, and be done with it…If it were THAT easy, a lot of people (including me) would be all over it….[/quote]

I don’t intend on making offers on listed properties. I know where the longtime “vacants” are in three “target areas.” Some have been “vacant” as long as ten years and regularly have the weeds mowed down in front to avoid municipal fines. I will approach and re-approach those owners with cash offer(s). Some are now getting to the point where their 60-70 yo “kids” are having to make decisions for them. Perhaps some will now come to their senses.

I will be targeting “free and clear” properties (w/o all the “flipper” competition). Only persons intimately familiar with these “hoods” would know about these opportunities.

That’s why as a potential RE investor, you have to keep your eyes and ears open. But this is hard to to when one lives in an area that is surrounded by newish housing tracts for miles around and is not familiar with older areas. You’re using your (expensive, MR-built) parks and trails for your daily walk instead of walking in the ‘hood ;=]

You can’t learn about possible viable “investment opportunities” doing that.[/quote]

Well ok great. So how long have you been trying to do this, and how long do you think it will take before you can start generating income from this strategy.?I ask because it sounds great as a plan, but if it takes like 10+years for one to just get started, I can’t wait that long. There comes a point when I don’t want to start doing this in my golden years. I want it done well before then so that in my golden years, everything is on auto-pilot more or less.

The other question I have is if someone needs to sell, how do you figure they aren’t going to try to put in on the market and try to get the best offer possible ,but rather sell to you directly?

[Author]

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