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North County Jim.
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June 22, 2007 at 3:32 PM #61513June 22, 2007 at 4:54 PM #61490
LA_Renter
Participant“LA Renter,
How about the people that bought MSFT in 1986 and never sold any?sdr
(MSFT stockholder since 1986)”I moved down here from Seattle, many of those people are my friends. The people that bought MSFT in 1986 and didn’t sell have a boat load of money. By the way congratulations on that investment, I bought ARBA in 2000 (sarc).
Here is what I said
“I mean we could also discuss that buying Microsoft stock in 1989 was a fantastic move. Then there are the people who bought MSFT in early 2001 and sold at a loss in 2003 because they had to liquidate their investments.”
Here is the point I was trying to make
“Here is the way I see it, if you buy right now you are facing significant risk within the next 6 years. Life happens, loss of job, divorce, sickness, etc. If you are forced to liquidate that RE purchase made now within that time frame you could be facing significant financial losses which will be difficult to recoup.”
Let me qualify this by saying that homes and stocks are two very different animals as most on this board agree. This is only an analogy. I am equating the person who is buying a home today with the person buying MSFT in early 2001. The risk you have buying at the top of any market is having to liquidate that investment in near term for any unforeseen reasons. Personally I am a relatively conservative investor (probably as a result of the ARBA 2000 lesson), I always look at the worst case scenario and ask myself can I take that hit. In the case of the current state of California RE, the answer is NO and I live in a two 6 figure+ household with nice chuck of capital gains from a previous RE investment.
Myito
I agree with Sdceller
“You’re not sticking to your guns. You keep changing them. I’m starting to see a repeating pattern of people specifically addressing your points and you coming back with something else.”
June 22, 2007 at 4:54 PM #61529Participant“LA Renter,
How about the people that bought MSFT in 1986 and never sold any?sdr
(MSFT stockholder since 1986)”I moved down here from Seattle, many of those people are my friends. The people that bought MSFT in 1986 and didn’t sell have a boat load of money. By the way congratulations on that investment, I bought ARBA in 2000 (sarc).
Here is what I said
“I mean we could also discuss that buying Microsoft stock in 1989 was a fantastic move. Then there are the people who bought MSFT in early 2001 and sold at a loss in 2003 because they had to liquidate their investments.”
Here is the point I was trying to make
“Here is the way I see it, if you buy right now you are facing significant risk within the next 6 years. Life happens, loss of job, divorce, sickness, etc. If you are forced to liquidate that RE purchase made now within that time frame you could be facing significant financial losses which will be difficult to recoup.”
Let me qualify this by saying that homes and stocks are two very different animals as most on this board agree. This is only an analogy. I am equating the person who is buying a home today with the person buying MSFT in early 2001. The risk you have buying at the top of any market is having to liquidate that investment in near term for any unforeseen reasons. Personally I am a relatively conservative investor (probably as a result of the ARBA 2000 lesson), I always look at the worst case scenario and ask myself can I take that hit. In the case of the current state of California RE, the answer is NO and I live in a two 6 figure+ household with nice chuck of capital gains from a previous RE investment.
Myito
I agree with Sdceller
“You’re not sticking to your guns. You keep changing them. I’m starting to see a repeating pattern of people specifically addressing your points and you coming back with something else.”
June 22, 2007 at 5:04 PM #61496sdrealtor
ParticipantLAR,
I understood what you said the first time. I just get all giddy whenever I think about my Mr Softee. One of my best friend’s in college was a Comp Sci major. We graduated in 1985 and he knew about MSFT when it was going public. I was the only person he knew at the time with a couple grand to invest and he told me to. Fortunately, I listened. My other best friend in college inherited a ton of IBM stock that had been in his family for many years. He pretty much lived off the dividends. When MSFT started going through the roof I remembered him and vowed never to sell any.sdr
June 22, 2007 at 5:04 PM #61535ParticipantLAR,
I understood what you said the first time. I just get all giddy whenever I think about my Mr Softee. One of my best friend’s in college was a Comp Sci major. We graduated in 1985 and he knew about MSFT when it was going public. I was the only person he knew at the time with a couple grand to invest and he told me to. Fortunately, I listened. My other best friend in college inherited a ton of IBM stock that had been in his family for many years. He pretty much lived off the dividends. When MSFT started going through the roof I remembered him and vowed never to sell any.sdr
June 22, 2007 at 5:19 PM #61502ParticipantJune 22, 2007 at 5:19 PM #61541ParticipantJune 22, 2007 at 5:41 PM #61512cyphire
ParticipantI don’t know Alex_angel… Most of the really educated 28-33 year olds I know are still dreaming of the pre-melt down high tech days. They are not making the big bucks. But they do have big dreams and don’t feel fulfilled by the current economy. I will agree that there is an awful lot of money around. My friend in NJ was a sub-prime mortgage guy. He is writing 5% of the volume that he was previously doing. He is running out of the money and the lifestyle he had built for himself. It seems to me that with the current vogue of living way above one’s means, that even the high earners will get pounded if the economy softens. And I think it will. That’s why I sold my business – I wanted to get out while the risk was still manageable.
By the way dude – I was living that life in the 90’s. Most of they younger guys (I was 15-20 years older than them) were worth that on paper. After it crashed they went back to Raman. and had huge tax bills to boot!
A friend of mine was buying options at the time. Ended up being wiped out and owed 150K in taxes. Also paid something like 60K in just trade fees!
In 1998-9 I would pay entry level programmers 80-90K. I had to teach them to program. I had to accept that they would come to work drunk, and cry about their recent breakup with some girl. I had to give them options and promises for future rewards or they could walk across the hall and get a similar or better job the same day. These now 28-35 year old tech guys would swim through a river of refuse for a good 60-90K job now. And still have to find a place to live in their budget.
I’m glad I started my company in 86!
June 22, 2007 at 5:41 PM #61551ParticipantI don’t know Alex_angel… Most of the really educated 28-33 year olds I know are still dreaming of the pre-melt down high tech days. They are not making the big bucks. But they do have big dreams and don’t feel fulfilled by the current economy. I will agree that there is an awful lot of money around. My friend in NJ was a sub-prime mortgage guy. He is writing 5% of the volume that he was previously doing. He is running out of the money and the lifestyle he had built for himself. It seems to me that with the current vogue of living way above one’s means, that even the high earners will get pounded if the economy softens. And I think it will. That’s why I sold my business – I wanted to get out while the risk was still manageable.
By the way dude – I was living that life in the 90’s. Most of they younger guys (I was 15-20 years older than them) were worth that on paper. After it crashed they went back to Raman. and had huge tax bills to boot!
A friend of mine was buying options at the time. Ended up being wiped out and owed 150K in taxes. Also paid something like 60K in just trade fees!
In 1998-9 I would pay entry level programmers 80-90K. I had to teach them to program. I had to accept that they would come to work drunk, and cry about their recent breakup with some girl. I had to give them options and promises for future rewards or they could walk across the hall and get a similar or better job the same day. These now 28-35 year old tech guys would swim through a river of refuse for a good 60-90K job now. And still have to find a place to live in their budget.
I’m glad I started my company in 86!
June 22, 2007 at 6:00 PM #61514PD
ParticipantPeople who use words like "dumb or stupid" are usually dumb and stupid. It stems from a deep seated sense of inferiority. And anyone who doesn't know that is …well, you get the point.
Ah, Querty, you found me out. I'm secretly stupid, I just masquerade as someone with a brain. Do you suppose the fact that you insinuated you were about to say "dumb or stupid" is any better than actually saying it?
Usually, I would agree with you. I have always thought that people who complain the loudest about how stupid everyone else is in relation to themselves are usually the ones who are incompetent.
I won't make any excuses, Querty, as long as you don't either.
Does anyone have any suggestions for how I can raise my IQ?
June 22, 2007 at 6:00 PM #61553ParticipantPeople who use words like "dumb or stupid" are usually dumb and stupid. It stems from a deep seated sense of inferiority. And anyone who doesn't know that is …well, you get the point.
Ah, Querty, you found me out. I'm secretly stupid, I just masquerade as someone with a brain. Do you suppose the fact that you insinuated you were about to say "dumb or stupid" is any better than actually saying it?
Usually, I would agree with you. I have always thought that people who complain the loudest about how stupid everyone else is in relation to themselves are usually the ones who are incompetent.
I won't make any excuses, Querty, as long as you don't either.
Does anyone have any suggestions for how I can raise my IQ?
June 22, 2007 at 6:14 PM #61516ParticipantMyito…
Point number #1 you are correct. I will admit that I am out of the mainstream that way.
Point #2 sorry dear. CNN’s financial calculator comes up with
Your current savings will grow to: $1,665,780.77
Inflation adjusted (3.0%): $667,989.88Assuming you save 1200/year. 28% federal rate, 9.3% state rate. I also don’t believe that 3%. Most experts are pegging true inflation at 3.4-4.0 percent for the future. this doesn’t even consider that with our countries savings / debt ratio what our currency could slide to.
At a conservative 5% you will have 20% more than your nest egg in today’s buying power.
More importantly you will have a 30 year mortgage and taxes on a house which is at the hight of the market. Don’t believe that it went down 20%. How many people actually bought at that insane price? You are going to pour double or more into this house then renting. You are going to have to landscape, window treatments (even for millionaires this is expensive!!! It should be part of the marriage vows!).
Point 3: If housing goes up with inflation, your house is only worth the same amount of money. You spent 30 years of interest (triple the cost of the house) to get back an investment which is worth the same as when you bought it 30 years before… Thats why buying at the top of the market is so dangerous. You could spend the next 10 years getting back to the preinflation rate you were at. All while paying for the asset at today’s inflated price with today’s interest rates.
How do you figure that 1.777M is equal to 1M now? That is not a hefty profit. If inflation is = to 4% (just a guess), a 1,000,000 today is worth $3,243,397.51 in 30 years. Your house BETTER be worth a heck of a lot more in 30 years than 3.25M… If it is worth 1.7M you have lost 1/2 of your investment. You spent 1.6M in payments during this time (and taxes)… You also lost the income from the 400K you put down (I only figured you at a 600K loan).
Anyway I am trying to figure this stuff out too. But your robotic logic seems to be alluding me!
Assume that your house will grow at 7% or more. That precludes you expecting it to drop in value – that is folly. Don’t buy a Million dollar asset if you think that your value would be 666K in 5 years.
June 22, 2007 at 6:14 PM #61555ParticipantMyito…
Point number #1 you are correct. I will admit that I am out of the mainstream that way.
Point #2 sorry dear. CNN’s financial calculator comes up with
Your current savings will grow to: $1,665,780.77
Inflation adjusted (3.0%): $667,989.88Assuming you save 1200/year. 28% federal rate, 9.3% state rate. I also don’t believe that 3%. Most experts are pegging true inflation at 3.4-4.0 percent for the future. this doesn’t even consider that with our countries savings / debt ratio what our currency could slide to.
At a conservative 5% you will have 20% more than your nest egg in today’s buying power.
More importantly you will have a 30 year mortgage and taxes on a house which is at the hight of the market. Don’t believe that it went down 20%. How many people actually bought at that insane price? You are going to pour double or more into this house then renting. You are going to have to landscape, window treatments (even for millionaires this is expensive!!! It should be part of the marriage vows!).
Point 3: If housing goes up with inflation, your house is only worth the same amount of money. You spent 30 years of interest (triple the cost of the house) to get back an investment which is worth the same as when you bought it 30 years before… Thats why buying at the top of the market is so dangerous. You could spend the next 10 years getting back to the preinflation rate you were at. All while paying for the asset at today’s inflated price with today’s interest rates.
How do you figure that 1.777M is equal to 1M now? That is not a hefty profit. If inflation is = to 4% (just a guess), a 1,000,000 today is worth $3,243,397.51 in 30 years. Your house BETTER be worth a heck of a lot more in 30 years than 3.25M… If it is worth 1.7M you have lost 1/2 of your investment. You spent 1.6M in payments during this time (and taxes)… You also lost the income from the 400K you put down (I only figured you at a 600K loan).
Anyway I am trying to figure this stuff out too. But your robotic logic seems to be alluding me!
Assume that your house will grow at 7% or more. That precludes you expecting it to drop in value – that is folly. Don’t buy a Million dollar asset if you think that your value would be 666K in 5 years.
June 22, 2007 at 6:30 PM #61520Participantsdrealtor… GRRRRRR….
In 1985 my dad and I went to his broker. We had just had a sizable commission on a sale of equipment to IBM (about 100K) and we wanted to buy some stock…. Like Bugs I was brought up to buy expensive fast cars and keep changing them. not exactly great financial advice.
Anyway our broker at Shearson-Leamen (american express) showed us 2 companies he thought were great. One was Microsoft (really at the beginning!) and the other was EFG (Equitek Financial Group)… EFG was a real estate trust. Long story short… Our EFG stock went from 100$ to .71cents. Please don’t tell me what the Microsoft would be worth today!
June 22, 2007 at 6:30 PM #61559Participantsdrealtor… GRRRRRR….
In 1985 my dad and I went to his broker. We had just had a sizable commission on a sale of equipment to IBM (about 100K) and we wanted to buy some stock…. Like Bugs I was brought up to buy expensive fast cars and keep changing them. not exactly great financial advice.
Anyway our broker at Shearson-Leamen (american express) showed us 2 companies he thought were great. One was Microsoft (really at the beginning!) and the other was EFG (Equitek Financial Group)… EFG was a real estate trust. Long story short… Our EFG stock went from 100$ to .71cents. Please don’t tell me what the Microsoft would be worth today!
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