[earlyretirement]

Yep CAR. Also, I believe a big part of it is many of these semi-permabears have now bought here in the last year or so. I used to read a few Housing Bubble sites and even the most die hard of bears has now jumped to the other side and purchased.

So many of these people that diligently called the housing crash and waited on the sidelines to buy have now purchased a house. And now that they purchased, they don’t want to see another crash and probably don’t mind another bubble brewing up.

Personally I think prices are coming up too far too fast. It’s simply not healthy. But with human nature, these people that have purchased (and used to read/post) might not even want to think about a potential crash coming.

Things move in cycles. Nothing moves in a straight line forever. I kind of laugh at sites like Patrick.net now. Yes, he was right for many years. But then he ends up writing a book AFTER the bubble had already burst and prices were on their way up. I think I read that the guy still didn’t buy a house and is a renter.

I respect many of the people that called a housing bubble many years ago. I saw what was going on back in 2004 and saw it coming. So I know how difficult it was for some of these guys to have called it when everyone thought it would go up forever. But I have no respect for someone that calls a bubble, sees prices crash tremendously and then try to say prices will fall forever and end up being a life long perpetual renter.

That just doesn’t make sense to me.

[earlyretirement]

[quote=UCGal][quote=paramount][quote=ninaprincess]

If there is a young person here my advice is to max out on 401K and spread out your investments.[/quote]

This is bad advice IMO.

As mentioned, Wall Street will harvest a lot of money off of your 401k.

I’d guess 99% of employees who auto “invests” in 401k’s don’t have a clue what fees are being charged to your account.

For most it’s a way to dollar cost average, a really poor investment strategy.

It’s also hard to be nimble with a 401k. When the inevitable market shocks manifest you’ll probably lose a lot of value – think 2008.

Also, it’s very likely that 401k’s will be taxed at a much higher rate than they are today (think Jerry Brown).

I could see maybe contributing up to your company’s matching in a roth 401k and that’s it.

Why not take that extra money and buy whole life insurance (more flexible), or pay down your mortgage?

Also, the income whole like insurance can be tax free.[/quote]

Wow.
Very few people are able to time the market successfully over the long haul. Yet that is what you advocate with the being nimble comment. People who panicked and pulled their money out in 2008, missed out on the run up of the last few years. Those that kept their money in, recovered fully.
I learned this the hard way – I pulled some of my money out. And left it on the sidelines until about a year ago. My returns are FAR lower than if I’d just let it ride. Dollar cost averaging, would have let me purchase during the lows… as the market was rising.

Many (if not most) people are pretty clueless about the market – the 401k provides a vehicle where they can defer taxes, save for retirement, and possibly pick up a company match. It can be a set it or forget it retirement savings plan.

As far as whole life. Again.. Wow. That’s a great way to make your insurance agent rich. There may be a limited place for whole life in a diversified portfolio… but not for everyone. Term life is a better value. Mixing insurance and investment is mixing cross purposed vehicles.

Next you’re going to tell me about variable annuities and what a great deal they are. (Again, a great deal for the person selling them.)

I’m not an investment guru… but I’ll stick with low cost (low expense ratio) index funds, some real estate, and dollar cost averaging. It’s worked well for me.

I agree that there are some craptastic 401k plans out there. My husband’s plan has these very large front loads. But it still made sense to participate to get the company match and the tax deferment. (I did the spreadsheet calcs to make sure, compared to a self invested IRA.) I feel fortunate that my employer’s plan has very low expense ratios.

FWIW – one of the benefits of the laws that came about after the collapse is transparency on plan fees, expense ratio’s etc. That is a good thing for the employee.

I’m not disagreeing with paying down your mortgage. I’ve been criticized for doing just that. (Don’t remember who yelled at me for that – but it stung at the time.) The advantage to having a smaller/paid off mortgage is that your cash flow improves in retirement… You can live the same on a smaller nest egg if you don’t have to pay a mortgage.[/quote]

I couldn’t have said it better myself. I totally agree on these points. VERY few people are able to successfully time the market over during the long haul.

I’ve also been criticized before in the past for not leveraging and paying off mortgages early or paid cash instead of leveraging.

I learned a long time ago you don’t try to argue with people that think they can always leverage themselves and get rich quick.

[earlyretirement]

SK,

I think you will agree the government certainly didn’t help things at all. In fact, they failed on many levels reigning in these investment banks and financial institutions. They fought tooth and nail due to lobbying to restrict leveraging by these institutions. But I totally agree with you that you can’t only blame the government.

Too many people want to blame it all on the US government but that is simply too convenient and not correct. Collectively as a group too many people were in denial at what went in. Even many bears enjoyed watching their fake net worth via home prices go up. Very few people that I know totally cashed out of all their real estate during the bubble.

No way anyone can blame all of this on the government. Just look at the numbers in 2006. 85% of subprime loans came from the private side.

In 2004 in San Diego a whopping 80% of all mortgages were adjustable rate mortgages and 47% were interest only!

[earlyretirement]

Me personally no I wouldn’t have interest in that house in Chula Vista you posted. However, I think the vast majority of retires out there would jump at the chance to live in that house.

But that is part of my argument. A huge percentage of future retires will never have the chance to retire in a house like that in an area as great as San Diego. Yes, lots did pay off their homes but there is a huge disparity in the USA of people in all generations that aren’t adequately prepared for a comfortable retirement.

And I’m in TOTAL agreement with you on the “I want it ALL” attitude of many Gen X and Y of today. Yes, many are living beyond their means. I see it daily and with friends and former college classmates.

I think we can all agree that a HUGE number of people in the future won’t be able to comfortably retire by our definition above without tremendous support from family members or friends.

[earlyretirement]

[quote=flyer]
Looking at some of the stats, I’m just guessing that around 50% of BB’s will be in a position to retire comfortably–and the upper 20%, very well. I think most of us here, regardless of age, have planned to be in that top 20%.

As far as selling off assets–specifically properties–in the future as needed. I think a lot of that success or failure will depend on where those assets are. If one selected wisely, and as global demand continues to increase in certain geographic areas, I don’t think that will pose a problem for those who hold assets in those areas.

Going forward, perhaps “retirement,” may be reserved for a far more select few–only time will tell.[/quote]

I totally agree with you flyer. The key word being “comfortably”. My definition of comfortable isn’t even anything luxurious or doing exciting things or seeing exciting places. My definition of “comfortable” in retirement would be simple things like having a comfortable roof over your head without any worries in the city that you actually want to live in, getting adequate medical care in your home country without having to worry about getting excellent medical care, being able to not have to worry about eating a diet that is nutritious and not having to think about putting something back on the grocery shelf because you can’t afford it or it’s too expensive. Not having to worry about turning off the heat in the winter (not everyone lives in SD..lol), not having to worry about turning the AC on in the summer. The occasional meal out in favorite restaurants, being able to enjoy a hobby or take an occasional trip/vacation.

Unfortunately I truly believe that many people won’t even be able to do these things above. I’m not so much worried about the boomers compared to other later generations however.

And yes, on selling off assets. I agree with you flyer… that it all comes down to location, location, location. I don’t think it matters which city/country you are in. The most desirable neighborhoods will always have people that are interested and have $$$$ to either buy or rent. Even in economic down cycles.

[quote=livinincali]

I honestly think going forward many boomers and even current retirees aren’t going to be retiring comfortably.
[/quote]

Yep. I totally agree with you there livinincali. The numbers and statistics don’t look too good to me.

BG, to play the devil’s advocate…what do you think about today’s retirees or future retirees that do NOT have pensions of any kind. Do you think they will be comfortable as well as a whole group nationwide? Are you optimistic for tomorrow’s future retirees that can’t count on a pension?

[earlyretirement]

I think it’s the nature of these former “bubble blog” type sites. I used to spend quite a bit of time on Patrick.net but now never visit it anymore.

I think with the rebound and also the anemic inventory levels…..far less people are interested these days.

I guess if things keep going the way they are going…..soon people will be back calling for another bubble to burst.

[earlyretirement]

[quote=SK in CV][quote=spdrun]Horseshit — the bubble basically didn’t happen in markets where 20% down was required (i.e. Texas). It was gov’t-encouraged bank lending run amuk.[/quote]

Beyond silliness run amuck. Not even worthy of argument. I think you’re smarter than this. Maybe not.[/quote]

While Texas didn’t get as crazy as some places like in California, Las Vegas, Phoenix, Miami, etc… it did have a run up in prices and a big correction as well. I made some offers on properties a few years ago and definitely there was a run up in prices and subsequent correction. Not as bad as other places but they did have a run up nonetheless.

You can’t just blame the government for the bubble and in fact there is a lot of blame to go around. The truth is there is no way the bubble would have gotten to the level it did without the PRIVATE side. Take a look at the derivatives market from 2000 to 2007. Without those, no way we would have seen the bubble go as high as it did.

There are a LOT of players to blame. Not just the government.

This is a GREAT link that I think is a good synopsis of what led to the bubble. I find it to be spot on target.

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

[earlyretirement]

[quote=livinincali]

Better hope the X&Y groups are better off than you think because these are the people you’re going to need to sell or rent your assets to in order to fund retirement. When you make an investment it pays to think about the person who you think you could sell it to for more in the future. Some assets will do better than others but if the next generation is going to be over burdened you might want to rethink how much your assets are really going to be worth in the future. I suppose you could hope for rich Chinese buyers.[/quote]

Nope. “Hoping” is not part of my retirement/investment strategy. Part of the strategy is not depending on the X&Y groups to have anything to do with my retirement strategy or have my hopes to depend on them to purchase assets.

I do agree with you however that it pays to think about exit strategy no matter what type of investment you are buying. Even on longer term investments it always pays to think about exit strategy.

But honestly, I don’t think it’s wise for anyone to plan on the Generation X & Y groups overall to be retiring with high net worths and in many situations ANY net worth.

I do agree that it’s important to “live” while you are young but not at all costs. Too many of the X & Y have the “live for today” attitude. It might be fun to enjoy that attitude when you’re in your 20’s, 30’s 40’s or even 50’s but quite another when you are in your 60’s, 70’s, 80’s or even 90’s with limited means and no savings.

[earlyretirement]

[quote=bearishgurl]
Perhaps it is the currently-overextended Gen X crowd who is vocal about their future plans for “suicide” on the blogs. You know … the ones approaching age 50 in the coming years who have spent themselves down the drain for decades?[/quote]

Yes. On most of the comments I’ve seen they were from over-extended Gen X & Y groups that feel like they have no hope as they are so far in debt. Obviously they probably have some other issues if they are talking suicide but I have some clients that admitted to me that they had relatives that committed suicide over financial issues. Also, I have a friend that also had a brother commit suicide once he lost all his money.

I do see the biggest problem with the X & Y group that is over leveraged and seem to spend as much as they make and have no or negative net worth. I’m not sure what the future holds for these type of people.

I’m not so sure however that all the Boomers are in as good of a situation as you and your friends.

[earlyretirement]

[quote=bearishgurl]ER, Mayor Mo’s story could be a compelling book or made-for-TV movie due to she and her family having very “humble” roots. Even her fmr Chief of Staff and other longtime professional colleagues are having a very hard time believing what they are reading about her today!

Perhaps she could find an interested collaborator/ghost writer to work with her after all this is over, assuming she is still alive and coherent enough to tell her story.[/quote]

Yep. If she “plays her cards right” (no pun intended.. LOL) she should be able to score millions on both a book and also TV/movie deal. You couldn’t make up some of this stuff!

And I think it would be fascinating to hear some of the back stories of all of this, how much she started with, how much she lost/won at any given time. As well as hiding it for so long from so many people.

She should start on it now. Just donate a large portion of it to that charity she ripped off and I think ultimately she could come out really well and looking well. Plus she could possibly help other gambling addicts.

[earlyretirement]

Sorry to see you leave. I’ve enjoyed reading your posts.

Hopefully you will come back in the future. I agree sometimes you can get burned out on message boards after a few years. Happens to the best of us.

Best of luck with all that you do. Wishing you health and prosperity.

[earlyretirement]

BG, yes it sounds like Aguirre has a good track record and hopefully she will be able to recover these millions and pay back the money that she blatantly stole. She is fortunate she will not have to go to jail.

If she does win back these millions, hopefully she doesn’t blow it on more casinos. Because the temptation will be there for her. Hopefully she learns her lesson.

As far as the “addict” and the casinos not being able to allow them in. Well, it would be impossible for the casinos to police this. No way it could happen because imagine…. degenerate gamblers like O’Connor were good enough liars to fool friends and associates.

I’m sure they knew she was addicted but you have to keep in mind she could have lied and told them she had millions more. As well, it sounds like she had many up years as well. One report said she won as much as $200 million one year. (I’m not sure I buy that amount….) but I’m sure she had up years when she took/won money from casinos as well.

Yes, the casinos need to do more but I wouldn’t count on seeing that anytime in our lifetime. It’s like an alcoholic that is addicted and steps into a bar to have “just one drink”.

Hopefully we see her just come out and blame no one but herself and offer no more excuses. Just step up to the plate with no more excuses and pay it back and get help for her serious addiction.

Also, she should probably write a book. It sounds fascinating her story so maybe a book should be in the works which can also help with restitution. Heck, I’d buy a copy of it if it was a good read and she pledged the proceeds to the charity she robbed. And it would also be a good PR move for her.

PS – BG, I really must get up to that area. From what you described, it sounds amazing!

[earlyretirement]

[quote=UCGal]Not only do people not understand compound interest… they don’t leave money in a savings account (or investment account)… they spend it.

For a large part of the population, the answer would be zero to the question… because they’d have withdrawn that $100 and spent it at the first opportunity.[/quote]

Absolutely 100% agree. It’s really shocking how many people aren’t saving anything for retirement. I always read these surveys and statistics that show many people over 50 with less than $25,000 in savings. I’m not sure what they are going to do.

I was reading around on some message blogs and it seems like the “retirement plan” for many seems to be possibly suicide which is depressing but probably a reality for many Americans.

[earlyretirement]

[quote=flu]Idon’t think the gates really work.. most gates allow more than one car to pass in…You just have to tailgate someone in front.[/quote]

I do think that gated communities definitely put a big dent on possible crime. And Guard gated communities in conjunction with video cameras really make it much safer and deter people from attempting to enter.

I live in a guard gated community with video cameras (Santaluz) at the entrances and crime is VERY low in the development. And now they are putting up for vote to even make the pedestrian access from the various entrances also gated so that the pedestrian needs a key fob to get in.

I voted in favor of that one.

Will these things totally eliminate all crime? Probably not. But the statistics do show that they work. Communities like this make it one of the safest and lowest crime rate communities in all of Southern California from what the HOA board tell the residents.

[earlyretirement]

[quote=jstoesz]I rarely appreciate commentators on news articles. Actually, I never do. But this one at the top was actually cogent and is quoted in full below.

“Some questions left unanswered in that story:
– She had a “nine-year gambling spree” that started after the death of her hubby in 1994. So, that lasted until 2003! Why did the case go to court only now, in 2012?
– She sold a hotel for 7 millions in 2009. Why hasn’t she repaid the money to the charity?
– Since her gambling spree only lasted from 1994 to 2003, why should her brain surgery in 2011 be related to that at all?
– She left the charity broke. Why didn’t anybody notice this at once, and it had to be the IRS to uncover her gambling addiction?

Only some of a lot of questions that the story leaves unanswered. All in all, yet another example of nowaday’s “journalism” that focusses on stenographing soundbites without much concern about the coherence of the report. Some actual thinking and investigating would be highly appreciated.”[/quote]

My guess is no one knows the true story except for her and maybe her lawyers. But maybe she even withheld things to them.

In this kind of situation, typically a gambler will always try to downplay how much they lost. Gamblers like to talk about how much they made and the hands they won but never the hands they lost. So my guess is this $2 million from the Foundation could be the tip of the iceberg.

Also, I would take a grain of salt with anything you hear/read with how long the addiction went on. It probably was even longer than what the stories are saying. And her lawyer’s estimate of her past net worth is probably understated as well. IMHO.

As far as the hotel she sold for $7.5 million. They never got that amount. “Mayor Mo” and her twin sister didn’t go through a traditional sale. You can read the details below:

http://www.sandiegoreader.com/news/2011/mar/23/citylights1-oconnor-sisters-german-bank-heritage/

[Author]

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