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

[flyer]

As an early airline pilot “retiree” who is still working as an aviation consultant, I agree with just about everything that has been mentioned here. There are as many variations on this theme as there are people.

I believe you really have to plan for the worst and hope for the best, so we’ve put our eggs in quite a few baskets. We are in our 50’s, and are still working at things we enjoy, we have lots of investment properties, investments, and are maxed out all savings opportunities, etc., etc.

I’ve watched friends with all of the best laid retirement plans made throughout their lifetimes lose it all in one way or another. So, if one is lucky enough to make it to retirement–whenever that may be for them–and lucky enough to have the health and means to enjoy it when they get there, they should consider themselves very fortunate.

[bearishgurl]

[quote=flu]So let me ask you again. Are you actively doing this right now, and have you been successful purchasing a property like this recently, and it is producing income right now? If not, and if it’s this easy why aren’t you doing it versus blogging about it? That’s my question. Because it seems like it’s a no brainer, why wait? Is there an inventory available from these described “sellers” who are interested in selling within the short period of time. Or do we have to wait 10,15+ years for people to start croaking before this happens? And again, why wouldn’t these people be putting the home on the market where it could fetch top dollars?[/quote]

A multitude of reasons. Because they don’t have the energy or incentive to ready these properties for sale. Some think their kids might want them (when they really don’t), lol. A couple of them marketed their properties between 2004 and 2006 and couldn’t get their “pie-in-the-sky” asking prices due to condition. Some of these owners (who all live locally) still think the market will “come back” to that. One property on a nice street has married owners who are privately “feuding” over its disposition. The wife is a “packrat” and doesn’t want to part with anything stored in the property. The husband moved them to another house they owned in order to leave her “collectibles” behind in the old one. (I wonder if she is “hoarding” there, also? :=0)

Most of these owners own multiple SFR’s, duplexes and triplexes and some own small commercial properties as well.

These people aren’t “sellers,” per se. They have to be (gently) warmed up to the idea with perhaps some “haul-away services” to sweeten the deal :=] Some are in failing health. Others are stubborn, emotionally-attached or are delusional about the real street value of their properties which are slowly being let go to waste.

If one waits until the owners “croak” (not within anyone’s control), then one must hope they “planned correctly.” Due to the amount of holdings some of them have, if there is anything amiss in their estate-planning, it will cause some properties to have to go through probate. This will entail the assignment of an administrator, who will have everything on the premises hauled away and auctioned off or given to charity. Then they will hire a cleaning company and then market the property in conjunction with getting a court order to sell it. It will go on the MLS and could attract flippers and investors.

In my neck of the woods, I’ve witnessed the above scenario repeatedly.

I can’t access the money right now. I have to wait. My potential “equity partner” already has the cash but currently has their hands full rehabbing a large property in their “off hours.”

Meanwhile, I’ll get the CPM designation while in a “holding pattern.” THAT is a no-brainer.

[bearishgurl]

[quote=ltsdd]So how are these houses compared to the ones being sold by the so-called “scumbag SS”? How much rehab and how long do you think it’s going to take FOR YOU to get the house ready to rent it out? I hope it doesn’t take “a truck” and nowhere near “a year-plus” to get the place ready. I hope you do own a truck and a lot more handy than me because it took me a whopping two weekends and another $400 for a contractor to finish the garage and have got tenants moved in in less than 3 weeks. Oh, and here’s the kicker, I don’t own a effing truck. Damn, those SS!…[/quote]

Off the top of my head:

1. Straightforward transaction;

2. 10-20 day closing, depending upon buyer contingencies or lack thereof;

3. actual SELLER accepts offer, NOT FB who has no authority to do anything but use the mens/ladies room by themselves;

4. title not FU’d by liens and jr lienholders coming out of the woodwork with their hands outstretched;

5. title actually free and clear … rather novel in this county and era, don’t you think?;

6. 30-60 day cleaning/rehab period to ready for tenants;

7. handy … willing to do manual labor and get dirty … no problem;

8. and, access to multiple types of power tools, large pickup, even flatbed … no problem;

It’s all in the willingness to work and having “connections.” :=]

Congrats, ltsdd on your successful SS closing!

[bearishgurl]

[quote=no_such_reality]BG, be vary cautious of homes that have sat with the utilities turned off for extended periods…It’s good rule of thumb, never by a rental you would be unwilling to live in or in an area you wouldn’t want to live in.[/quote]

Understand this, NSR. This is even more sage advice for colder climates. These problems are fixable in SD, IMHO. The buyer can always have utilities turned on before removing contingencies to test.

Some of you Piggs need to “get out” more. Not everyone walks their dogs in a “planned community” with developer-manufactured trails, parks and playgrounds.

Folks, it’s really okay to walk on a city street, even alone. There are VERY FEW areas in this county I wouldn’t walk at night and even some of those I would be okay walking in with a partner.

Note that I’m still alive to discuss it with you all :=]

[bearishgurl]

[quote=flyer]As an early airline pilot “retiree” who is still working as an aviation consultant, I agree with just about everything that has been mentioned here. There are as many variations on this theme as there are people.

I believe you really have to plan for the worst and hope for the best, so we’ve put our eggs in quite a few baskets. We are in our 50’s, and are still working at things we enjoy, we have lots of investment properties, investments, and are maxed out all savings opportunities, etc., etc.

I’ve watched friends with all of the best laid retirement plans made throughout their lifetimes lose it all in one way or another. So, if one is lucky enough to make it to retirement–whenever that may be for them–and lucky enough to have the health and means to enjoy it when they get there, they should consider themselves very fortunate.[/quote]

Agree, flyer. I’m probably older than you, but close to “retirement” (whatever that means, lol).

I’m one of those you are referring to here who had it all and thought they planned well and when they were younger and never in a million years thought they would end up where they are today. You are correct in that there are several insidious ways one can lose wealth over their lifetimes (even if one is not a gambler and always had good credit). Only by the “patience of Job” and immense resourcefulness have I been able to get to where I am today. The way I see it, it’s all downhill from here … at least for me, that is… :=)

[no_such_reality]

BG, I understand your plan and wish you luck. Essentially, you’re planning on smoozing the ‘hood and picking up the gems on the cheap before they hit market. A very tried and true method.

A method that also takes substantial overhead effort. We looked at many of those willing but unrealistic sellers before we bought, the relatively universal nature and level
of deferred maintenance was off putting.

A scrubbing and minor tune up would make them marketable as a low end rental, new stove, range, furnance, AC were all common baseline requirements. Ripping out carpet and replacing with tile or carpeting also common. Cabinets, dated but functional, usually. Counter-top, usually questionable. Bathrooms, usually needing new fixtures the whole way around.

That’s to make them just a little better than the very beat up half step above slumlord properties managed by many of the PM firms in OC. (literally, I quit looking at most PM firm properties when I was renting for the slumlord reasons.)

If you find a rentable property that only requires 30-60 days of elbow grease and $5000 of hardware, buy it before anyone wakes up.

[an]

[quote=flu]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.[/quote]I totally agree. There no reason why you need to mix personal consumption item with a product for other to consume that suppose to produce a return. As long as you feel safe with the area, that’s all that really matter. The rest is all about cash flow.

[quote=flu]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…)[/quote]None taken. I would say the same for most part of CV too. We looked there before buying in MM. I rather have a house in MM and investment properties over a house in CV. We all have our own taste and priorities.

[flyer]

Actually, BG, I was really making a general comment based upon what I’ve seen friends and acquaintances experience, and believe me, you are not alone.

Quite a few people I’ve known who thought they had life all figured out have experienced things like extremely unexpected job losses around the age of 50, health issues, problems with kids that they never saw coming, etc., etc.

These are good people who, in their 30’s and 40’s thought they had life locked and loaded. Then, they had some bad things happen, and these issues did truly effect their lives in a very catastrophic way.

My real point was, that even when we think we have everything all figured out, life can change on dime, and forever alter our best laid plans.

Our family has gone through plenty of challenges in our lives, and by the Grace of God have still been blessed, and we truly wish the same blessings for you.

[ocrenter]

For all the problems with the 401k and 403b and keogh, they are simply extremely attractive with our progressive tax system. And this will force people to continue dumping money into the system.

A ponzi scheme would only be a ponzi scheme if they eventually run out of that continuing input.

Assuming someone pulls in $250k. If that person dump $35k into the retirement funds, they escape the over 40% taxation on that $35k.

How many people are going to be in that over 40% bracket after retirement? Even if they are forced to withdraw from their 401k.

Even if that money makes ZERO return, that is still better than the reduction to 60 cents on the dollar post tax.

[Coronita]

[quote=ocrenter]For all the problems with the 401k and 403b and keogh, they are simply extremely attractive with our progressive tax system. And this will force people to continue dumping money into the system.

A ponzi scheme would only be a ponzi scheme if they eventually run out of that continuing input.

Assuming someone pulls in $250k. If that person dump $35k into the retirement funds, they escape the over 40% taxation on that $35k.

How many people are going to be in that over 40% bracket after retirement? Even if they are forced to withdraw from their 401k.

Even if that money makes ZERO return, that is still better than the reduction to 60 cents on the dollar post tax.[/quote]

Max limit on 401k is $16.5k per year if you are not self employed (IE w2 at a company)

Married couple can do that twice though.

[ocrenter]

[quote=flu]

Max limit on 401k is $16.5k per year if you are not self employed (IE w2 at a company)

Married couple can do that twice though.[/quote]

More reason to maximize the 401 contribution.

There are some folks that can contribute to keogh and 401k, thus getting out of the highest bracket altogether.

[bearishgurl]

This just in on Yahoo headlines:

Social Security – The Cheapest Annuity in Town

…The reason that Social Security annuities are a better deal than those in the private market is that Social Security can offer a product that is actuarially fair – they are based on the life expectancy of the average person (not those people whose parents lived into their 90s) and Social Security doesn’t have to worry about marketing costs or profits. Moreover, in this period of very low rates, Social Security is an especially good deal because the increase in benefits is not based on current rates but rather is a basic feature of the system. So buying an annuity from Social Security, especially in today’s low interest rate environment, is the best deal in town…

http://finance.yahoo.com/news/social-security–the-cheapest-annuity-in-town.html

[Arraya]

[quote=harvey][quote=Arraya]There are many human systems that ultimately rest on the buy-in of new entrants, and every one of them will ultimately meet the same fate, although it can take far longer for complex constructions than for simple pyramid frauds.[/quote]

Wow! You found a link on the internet that makes profound comparisons between ponzi schemes and, well, damn-near everything.

Every plan for the future assumes growth (except those that involve killing your neighbors for their food supply.)

The assumption of growth does not imply fraud.

Labeling any plan that relies on growth as “ponzi” is trite, intellectually shallow, and outright lame.[/quote]

No your argument is ¨trite, intellectually shallow, and outright lame

The doctrine of never ending growth is a failed doctrine because of physics. Then again, ¨modern¨economics is not a reality based system. It´s a quasi’religious, pseudoscience based on false assumptions and mythology. A linear system can not exist on a finite planet, period. The fact the the whole global economic system has to keep growing or it starts collapsing is almost a comic book error in design.

Economic ¨growth is essentially over in the modern world. Have fun clinging to your irrational and damaging religion. Not everybody wants to share your delusions, though.

[scaredyclassic]

My personal plan for the future involves growth; that is thick slabs of personal muscle. And denser bone. Thick powerful steady growth.

A plan for the global future doesn’t have to be based on growth. But it seems like we aren’t into that.

I think my kid told me that even if everyone was limited by law tO one kid population wouldn’t trend down till 2050.

He was reading some book on a world without people.

I think growth at current rates of people probably not good.

People don’t keep growing your squat has a limit. It may be high but it’s limited

[svelte]

[quote=flu]
Max limit on 401k is $16.5k per year if you are not self employed (IE w2 at a company)

Married couple can do that twice though.[/quote]

Actually, it is $17K in 2012, with an additional $5.5K if you are over 50, for a potential total of $22.5K

http://www.irs.gov/retirement/participant/article/0,,id=211334,00.html

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