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Daniel
ParticipantYour friend is exaggerating quite a bit the positives, but I’d say that I mostly share his optimistic views. Not particularly about the US, but about the world in general, of which US is a great part. The world is becoming more and more integrated, technologically advanced, democratic and peaceful. With all due respect for terrorist victims and fallen soldiers, 9/11 and Iraq are just tiny events, not even on the same scale with the horrendous wars of the past. You have to step back a bit to see the big picture, and the big picture of the world looks better than ever. And I believe it will only get better in the years ahead.
ParticipantThe rule is “add 2 at one step, multiply by 2 at the next step”, and so on. So the next numbers in the series are 92, 94, 188, 190, etc.
November 19, 2006 at 12:46 PM in reply to: Should personal net worth include your primary residence? #40307ParticipantI agree that the primary residence equity counts toward “total net worth”. It is helpful though to be very specific when speaking about the subject. There is “total net worth”, which includes everything, “liquid net worth” or “investable assets”, which excludes RE and any other iliquid stuff (if you have a Picasso, for instance), and, finally, “total net worth excluding personal residence”, which does include, for instance, rental properties, but does not include, obviously, one’s personal residence.
It is by this latest measure that San Diego has 100,000 millionaires. I suspect that many of them wouldn’t make the cut under the “liquid net worth” category, but have second homes and investment properties that appreciated mightily over the past 10 years.
Participant16 needs to be replaced by 10…
ParticipantIn SD, the price of land is next to zero if you can’t get a permit to build a house on it, and it is huge if you are allowed to build. Cars would cost a lot, too, if GM and Toyota had to ask everyone else already owning a car if they could produce one more, and had to wait for five years to get the “car building permit”.
ParticipantWell, La Jolla Renter wanted to keep things simple, hence the 29 year mortgage and the constant mortgage rate. One could do a much more sophisticated calculation and probably arrive at the same ballpark figure in the end. I think simple is good.
However, my comment would be that, although the example above looks good in theory, in practice couple B would probably just spend their extra $600/month on useless junk, thus invalidating the whole theory. Pretty cynical view, I know.
ParticipantI gotta say that K-Fed doesn’t ring a bell, either. Sounds like a government agency to me 🙂
ParticipantI think I know who Britney is, but who in the world is Kevin F? Maybe I’m not young enough to know. Or maybe I’m not angry enough…
ParticipantSo, jg, if Bin Laden says that two plus two make four, should we all say that it’s actually five, just because we’re not supposed to agree with him? I heard this kind of “the terrorists would like Kerry to win” talk in the final days of the 2004 campaign as well. I find it despicable (and I’m a Republican).
November 2, 2006 at 9:37 AM in reply to: Reductions in price per square feet in Carmel Valley #39016ParticipantWe talked about this house on Jim’s blog as well. Check out the REO Results link at his site for a detailed discussion.
ParticipantAnother (often overlooked) point: There IS a housing shortage in SoCal (and in NY and SF, for that matter). The fact that we have high inventory and few sales only tells us that prices are too high, not that we don’t have potential buyers.
Two facts: one, the ratio of population to housing units is much higher in SoCal than in the rest of the US (it’s worst in LA County). And two, the percentage of people who own their homes in SoCal is way below the national average. That tells us that there is a gigantic pool of potential buyers out there. Prices are too high today for most of these people to afford anything. But the presence of an enormous pool of potentail buyers should not be taken lightly. Even if the entire SoCal inventory would sell tomorrow, we’d still need a lot more units to reach the national average on homeownership.
ParticipantI think you have a very good point. If long-term interest rates stay low (that’s a big macroeconomic if, I know), and rent inflation continues to be high, then equilibrium home prices could be substantially higher than in the past. Actually, this issue has been discussed at length on some threads a few months back. Look for a thread called “Reversion to the mean” by PS, and another thread (don’t remember the name) that prompted PS to start “Reversion to the mean”. Needless to say, there was no consensus on this rather tricky issue. My point of view is probably close to yours (we’re overpriced today, but won’t go down to price/income of 8 anytime soon, if ever).
ParticipantOne more thing: if you carry a dozen of them, yes, I can see how you may have a problem keeping track of everything. But if you focus on just one or two cards with very high limits, then it’s easy. I only have two, and I don’t actually use them (just got the cash, set up automatic minimum payments, and tossed them in a drawer, activation stickers still on them). Also, I don’t know about “rolling over”, as I haven’t been doing this long enough. But, if these offers will still be around a year from now, I might think about that. If not, I’ll just pay the balances back and close the accounts.
Finally, it goes without saying that balance transfer fees are a no-no (why pay a 3% fee now to get a measly 5% in a year?). But most cards don’t charge that for their “special offers”.
ParticipantI’m actually doing it. The biggest expense (one you haven’t mentioned) is the hit to the FICO score. Carrying high balances will certainly ding it. If your score is high enough that you don’t care (800 or 770 gets you the same mortgage) and/or you’re not planning to apply for a mortgage anytime soon, then that doesn’t matter. The rest (time, expenditures) is very, very low, close to zero I’d say. You can open an account online in 5 minutes and set it up for automatic payment. Of course, you have to watch the fine print carefully before you apply, because there are all sorts of tricks, like 0% is only valid on transfers, not on purchases, and the other way around.
The best deals I’ve seen are from Capital One; they will basically cut you a $30K check, and charge no interest for about 15 months.
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