[avidsaver]

StudentEconomist, how tied are you to San Diego? Could be something for you in the L.A. area. Not sure what the protocol would be to get contact together though. With the little that you shared though, sounds like it could be a good fit.

[avidsaver]

Divorced mother, 1 kid, $97K

USC Grad, non-caucasian

[avidsaver]

Divorced mother, 1 kid, $97K

USC Grad, non-caucasian

[avidsaver]

> 10%?? What was she thinking?

[avidsaver]

As one of the regular “novice lurkers” on this site, I have to say that I’m pretty disappointed by her letter (with the “if it was really her” disclaimer). What was her point? Boy am glad I didn’t follow her advice to keep 80% of my assets in cash! Woulda missed out on the equity run-ups this year…

[avidsaver]

Good for you for passing. At the end of the day, you need to be happy in your home. Especially with the possibility of declining value which would keep you “stuck” there for longer than you might prefer if you don’t initially buy your “dream house.”

You’re right that no one ever knows, but the consensus around here is that the drops will be greater than 5% for only a couple of years. If you look at the early 90s to 96, prices dropped substantially. If you can stand seeing the value of your home decrease year after year (because after all, you’ll still be enjoying your home), buy, but just be aware of the possiblility (no crystal balls, right?) of future depreciation.

Yes, MB is a great school district, but with the $ that you’re saving, perhaps you can put your kids in a good private school in the interim, or if they’re young enough, the elementary schools may be just fine.

As a side note, I watched my neighbor put his two bed condo on the market at $569K and it’s just sitting… I think that the price has been reduced twice, but there seems to be no traction. It would be odd to see someone living in the EXACT same situation as me and paying MUCH, MUCH more than I do for the same space (I pay $1550 in rent).

Good luck. I’m waiting for the right time too…

[avidsaver]

My favorite part is this:

Conclusion:

We like real estate. If you’ve got enough for a down payment and have a stable job, and you’re in an area you’ll be comfortable living in for years to come, we can’t figure out why you don’t.

Because the fundamentals don’t make sense. DUH! (I had to respond at the level that the writer would understand.)

I have to agree with this much of the article. Four of the reasons are indeed lousy, but #2 is one good enough reason for me to wait out the storm.

[avidsaver]

How old are your kids? I’m guessing that you’re looking into moving to Manhattan Beach since you mention that the schools are among the best in the state. My understanding is that the school differential really doesn’t hit until the kids hit middle school though. But it depends… Wiseburn, El Segundo, Manhattan Beach all apparently have good school districts.

I’d rent. But I do rent. In El Segundo. For the school district.

[avidsaver]

It sounds like you might be overreaching on the tax benefit especially if you’re already itemizing. Also, Chubby Rascal mentioned the $45K in commissions that you’d have to pay to sell the house. Let alone any repairs, etc. that your landlord would pick up instead of you in a house that you only plan to live in for 3 years.

[avidsaver]

Cashman,
I’d be skeptical about the zillow values too. Look at the comps. With the exception of one, the others are lower than your selling price. You would know better than we would about how comparable these other homes actually are. Without your former home actually selling, you don’t know what the true value is. Also, what about all of the extra monthly cash flow you have? How have you been investing that? When the time comes, you will have a nice nest egg to put down on the next property at a much lower price.

I’m with ibjames; take your profit, and don’t look back.

[avidsaver]

ForSale, I think you’re right about the withdrawals being exempt from taxation no matter where, but I’ll check. I don’t exactly follow the numbers from your post. Are they comparing the two plans you have listed? Are both of those plans in Nevada?

Ray, all of my family is here, so I don’t know that there’s any advantage to having my mother open the account in her name (except that my son can have two accounts???). I guess I’m one of the rare breed of people who was born and raised in California.

I think I’m still leaning towards Utah, but I’ll have to check on the creditor protection piece.

One of my big overall concerns is this — what if I save too much in the account? Is the penalty worth it?

[avidsaver]

23,

I’m glad to hear that you’re leaning toward not buying. Your landlord sounds a bit desperate (despite the fact that the fax has yet to arrive). It’s a bit of a sign of things to come. In the meantime, I’d agree with the sentiment that you should save the overage over the next few years so that you have something to put down (or at least an emergency fund).

While I would agree with some about the fact that we don’t know when the bottom will come, I think that when the right time to buy does come, it will be obvious — like it was in 1996.

[avidsaver]

Thanks for the links. I can assure you that I am NOT of “unusual” wealth or income, so I think that (at least for now), I can just do a direct plan.

The Clark Howard site suggests that I just invest in California although it classifies Utah (where I was leaning) as “elite.” I think that I might still be leaning towards Utah, but I will give California a closer look. I was surprised to see New York in his “elite” category. Although they have low fees, I thought there were investment restrictions in NY that made it more difficult for the plan to realize the best returns (although no one has a crystal ball, right?).

One of the best pieces of advice in the article was to not save for college until I’m maxing out my retirement savings. It is my intent to contribute the full $15.5K to my 401K this year and $4k to my ROTH IRA. We will see.

Thanks again.

[avidsaver]

Yeah, I think that the savingforcollege site has good info, but they’re also trying to get people to pay for subscriptions for even more info.

[avidsaver]

Thanks for that. Unfortunately, everyone lives here in California, so no tax breaks for us…

I should note that what I saw relative to the California fees was a sliding scale based on the type of fund in which the account was invested. So, on the high end, the fees could get to 1.something% and I wanted to keep it lower than that. I suppose that if I selected an index fund, the fee would be lower. It just seemed that overall, Utah, had low fees all around. It seems that the only company that states any opinion about best and worst funds is Morningstar, and Utah’s been in the top 5 consistently.

I do hope that at some point CA will offer a tax break though.

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