[BikeRider]

Saving is very hard to do. My wife and I stopped using credit two years ago. I mean NO loan for anything. It is different now. We were thinking about redoing the kitchen the other day. We talked and decided that we didn’t want to redo it enough to pull the money from savings. You think about things differently when the money is going to leave your hands, verses ‘giving yourself a loan’ with credit cards. We aren’t rich, but we are comfortable and working towards being rich. And that is worth much more to me than someone seeing me driving a BMW. Our finances are such- 15% from each of our checks goes into our 401Ks each payday. We have no loans (including the house) and a large sum in a money market account as our emergency fund (job loss, sickness, etc). We don’t charge anything, so we have to have the cash for it or we save for a big item such as a car. A friend told me the other day that he and his wife are trying to do the same thing, but finding it very hard to stop using credit. The ‘want it now’ mentality if powerfull.

[BikeRider]

The government and banks want you to buy a house, period. You keep money coming into the economy. Your house is where you live. It is only worth what someone will pay and you only can call it savings if you SELL IT for more than you paid for it. A real savings account is money you have put away into an account and can withdraw without any type of penalty. Can you get the equity from your home by just pulling the money out of a bank account interest free? Nope. A house is an asset that can be borrowed against and also, will likely be worth more than you paid for it IF you sell it. You better hope that it is worth more later, if you decide to tap it for a loan above what you already owe on the mortgage. It just boggles the mind that people think the house is savings. Money put into a bank account or under the mattress is savings for a rainy day. The equity in your home is just another bill if used before the home is sold. My two cents.

[BikeRider]

I was having some strange problems, so I went into Internet Explorer’s ‘Tools’, ‘Internet Options’, ‘General’ tab, under temporary files – delete files. I also checked to delete all offline content. Piggington is working much better now. I think something screwy got cached. Probably one of Poweyseller’s posts.

[BikeRider]

Poweyseller, stop posting this crap and start babbling about housing again, like you normally do. Of course they are in more danger. It is a war, against people that blow themselves up and target civilians while doing it. Put yourself in their place for one minute….. Ask yourself…. would you rather be ruled by a dictator or fight for freedom? Would you rather be FREE or live under the rule of one horrible leader unable to speak your mind? I would want to fight for freedom, no matter what the media said or some asshole study said. I’d rather be dead than live under a dictatorship.

You think that the war stopping ends everything? Nope. They will just come over here and start blowing themselves up. You’ll want action then for sure. I say take the fight to them and keep taking it to them. You make our country look weak.

[BikeRider]

Live your lifestyle that also allows you to retire and not have to live in a van down by the river. So many young people are not preparing for their old age. I work with a guy that told me the other day he will just have to work until he falls over dead. He didn’t prepare enough when he was younger. He’s 55 now. He had a major setback about eight years ago, getting laid off from a job he’d worked at for fifteen years. The company laid him off and then offered him his job back at $20k less per year. He looked for other work, but couldn’t find much. Anyway, he finally got back into a good job, but had used up savings to stay afloat in the tight years. And he lost a lot in the market a few years back. Anyway, scary picture. Most people don’t think that they will get laid off, get sick or anything. They aren’t planning for those things. Just paying for the Porsche, the house, vacations…..

[BikeRider]

powayseller, this is the greatest country in the world, proved by the fact that you can say what you just said about our president and you aren’t executed. Now, for what you said….. no person should speak about our president like you did. You should be ashamed of yourself.

I feel that he took the fight overseas so that more blood wasn’t shed in our country. Keep them busy over there so they don’t have time to regroup and come over here. I fear that once the Democrats succeed in stopping the fight, we’re going to have bombs going off in our streets and malls. You want to see home prices tank? Well, that would give you your wish. And I don’t know what kind of freedoms would be taken from us in the name of National Security. Troublesome. There are no easy answers to all this. You are dealing with people that are totally insane, willing to blow themselves up. Don’t care if they kill women and children. Everyone is their enemy.

[BikeRider]

The 29 year old probably thinks living it that house makes him look like he’s somebody.

[BikeRider]

No, don’t embed in anchor tags. Then we can just copy and paste the link in a new window.

[BikeRider]

“It is not your money…” I hope to god that most Americans don’t start thinking this way or we’re all doomed. At what point in time did a lot of Americans stop taking responsiblity for their own actions? What they should do to people that do crap like you are saying is take them behind the wood shed and beat the tar out of them. I’m sure there are a lot of people that laugh all the way to the bank after screwing others over. Hopefully if there really is a supreme being those people will get their due.

[BikeRider]

sdrealtor, you’re right, I am probably yearning for the past. You make it sound like a good thing that both spouses work. What was the name of that book….”The Two income trap”. The double income is part of the reason (maybe the whole reason) we’re in the mess now. Home prices and prices for many other goods are out of whack. And the seller just extends the length of time we have to pay for things. I think maybe we have lost sight of some values, just to have more stuff than our neighbor. Or have the same stuff as our neighbor. I grew up in a very small town and my mom didn’t work. She stayed home and raised four children. Get this, mom and dad paid $5,000 for their home back in 1951. Granted, it was a small home, but they raised four children in it. My wife’s parents paid $25,000 for a split level home in Falls Church Va. Not sure of the date, but at least forty years ago I guess. I think the home now is assessed at $560,000. So I wonder, are prices in line now as compared to back then…. comparing salaries then with now and home prices then with now? To me, back then, you bought a house very cheap compared to how great your salary will increase over time. But today, you pay so much for a home, but your salary isn’t going to increase as much percentage wise as in the past. Am I making any sense this early in the morning?

This book is from 2004, but interesting.
http://www.motherjones.com/news/qa/2004/11/10_400.html

“AT: [Laughs] Right. Of course, the notion that mothers are all going to run pell-mell back to the hearth and turn back the clock to 1950 is absurd. But that aside, a big part of the two-income trap is that families have basically bid up the cost of living. Housing is a big example. A generation ago, an average family could buy an average home on one income. Today you can’t do that in three-quarters of American cities. We all know that housing prices are going up, but what most people don’t realize is that this has become a family problem. Housing prices are rising twice as fast for families with kids. “

[BikeRider]

I read more on the household income site I posted and it really blows me away. If you see what most Americans make, you really wonder how home prices got so out of control. It seems to me that so much is given up in order to afford a home. I understand WHY someone would want to own a home, but in current times, a lot is sacrificed to have one.

[BikeRider]

sdrealtor, maybe time warp, maybe not. I was talking about the US as a whole, not just the California area which is a bit out of touch with reality. I guess I mixed too much data to then speak of what a median home price would be for your state. Not everyone has the opportunity to attend college. And those that do now typically exit with a nice big fat student loan to pay back. That debt load should figure in to how much house they can afford starting out. Home prices are too high. Realtors don’t want to hear that, because their commission comes from the sale price.

Your area isn’t the norm for the US salaries. Take a look here….

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

The sad thing is, that now both spouses must work to maintain a certain lifestyle. So, the kids get dropped off and raised by others. In my area, my salary is actually pretty good.

Not sure how valid this site it, but I think it is ok data… http://www.payscale.com/research/US/State=Virginia/Salary

http://www.payscale.com/research/US/State=California/Salary

[BikeRider]

People that spout off the 40% of income aren’t thinking about what kind of income a first time home buyer actually has. Do we all remember when we were first time home buyers? I’m almost 48 now, but I remember back when I was twenty. I was broke most of the time. My wife and I married and I think our combined income was $35,000. Of course it is $150K now, but that’s 23 years of marriage and career changes. Anyway, I know that we couldn’t have put 40% of our income towards mortgage and do anything else. What is the average household income now…. $40K right? Now is that Gross? Doesn’t sound like much. Take home is 75% of that. Let’s say you figure the 40% of the 75% figure, or $30K. That makes it $12,000 a year to the house or $1000 a month. Let’s say the $1000 includes all the other fees (insurance, taxes, etc). So really, you got a mortgage of around $150,000. I plugged some numbers into a bankrate.com calculator and a loan at 5% for 30 years fixed is $805.23, before figuring in the other fees like insurance. 15 years is really what someone should shoot for, so the monthly payment would be $1186.00 + other costs. So, the first time home buyer, going by the 40% rule, can barely afford a $150,000 home with a 15 year fixed. Now, back when I was young and banks were more strict about loaning us young people money, the more common rule of thumb was 25% of your income. Of course, houses were also much cheaper. But back to my point, at 40% of take home of the average first time buyer, they have $18000 a year left for everything else they need money for. Food, clothes, cars, auto insurance, savings, vacation, kids. I just think housing is way out of line and something has to give. How many houses are in the San Diego area in the $150K range?

[BikeRider]

sddreaming, I live in Central Virginia. We have our nice (small) Blue Ridge mountains to the West and the Chesapeake Bay to the East. A little too much humidity for a couple of months a year, but hey, it is just a couple of months. I love to mountain bike and for serious riding I drive to the George Washington National Forest often (40 minutes from my house). Other hobbies include SCUBA, Rock Climbing (at Seneca Rocks WVa mostly), shooting, antique truck restoration. We own our home, which we bought new in 1997 for $155K (~2800 sq. ft. on 5 acres) after selling a smaller cape and upgrading. We don’t owe anybody anything, which gives us great piece of mind.

Raybyrnes, As to drawing the equity out of my home and investing it, no thanks. Too risky for my tastes. The county just assessed our property at $330K, so there is some equity there. I want to know that I have a place to lay my head. The fact that we don’t make payments to anyone leaves us with lots of income to use towards investing. And this crap about having a mortgage for a tax write off….it makes sense to pay a bank $10,000 in interest so that I don’t have to pay the IRS ~$3,000 in taxes??? Now, let’s see, if I didn’t pay that interest, I have to pay the IRS taxes on that additional $10K, but wait, that means I have $7,000 IN MY POCKET. Hmmm, I’ll take the money in my pocket. You can get the same tax write off by donating $10,000 to your church. You never hear any bank tell you to donate $10K to the church so you don’t have to pay the IRS $3K now do you? But it is the same amount of money off of your taxable income, it just didn’t go to a bank. But people keep thinking they have to keep buying a bigger and bigger house so that they can keep their tax deduction. And I guess they figure that the house will be worth more. But it isn’t any income until you SELL IT. And you have to live some place. So either you downgrade, move to some cheaper area or do something so that the sale price leaves you with cash in your pocket. Our plan has been to just stay in the home we love and grow wealth some other way. Actually, more Americans could have piece of mind if they worked towards paying off their house and then they have a big chunk of money to use for investments each month, instead of being a slave to the lenders with a mortgage payment.

[BikeRider]

Well, I’ve visited California a few times and I have to say I wouldn’t want to live out there. Of course everyone is entitled to their own opinion. I didn’t like the traffic and the higher cost of living. I think the area is way over priced for what you get. It is kind of funny how people think they actually own something anyway. We’re all just using stuff until we die. You take nothing with you. You can feel like you own your house, but you never really own it. You have to pay the government so that you can keep it. And then you die and someone else will own it. Are we all depressed now?

[Author]

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