[EconProf]

Sometimes the best option is to do nothing.
Why incur all the transaction costs, including spending your own time, churning properties and moving across the country? And all on a feared economic scenario that may or may not materialize. You will make the realtors and movers happy, but at great cost and personal disruption.
And there is something contradictory about selling properties because they have gone up a lot and buying elsewhere in hopes those properties will also go up a lot. Rampant inflation in values, if that is in our future, will push up all areas, albeit at different rates.
I’d be wary of big life changes based on economic forecasts. I’ve been right as well as wrong many times in the past. Right now I don’t know if we are in for serious inflation (which I’ve been wrong in predicting), or deflation (look at the price of gold). I’d suggest you stay put, build your liquidity, and be prepared for any eventuality.

[EconProf]

Listen to the market. It is smarter than you are.
Go to Craigslist to zero in on what similar rentals are going for. Price yours a bit under the market and then be very picky in chosing a tenant. As a beginner, you don’t want the hassles of weak tenants/too many occupants.
You can also listen to the market by learning from the calls you get. If you are flooded with calls and people who want to rent, you are probably too low on your rent. If you are still trying to find a tenant after three weeks or so you are probably asking for too much or your Craigslist ad is deficient (note: include lots of pictures).
Your property sounds very desirable and is in a great area, so it should rent quickly.

[EconProf]

Throw away all old refrigerators.
At $30 + per month, they make no sense. Buying a new or nearly new one to replace it could pay for itself in energy savings in two to four years–a no brainer.
BTW, the really old empty refrigerators stored in back yards are tempting hazards for children who have been known crawl inside, shut the door, and die a pretty horrible death. (the kinds with old-fashioned handles–not yours, I’m sure).

[EconProf]

CAR: if they were mostly in bonds, what would their rate of return be? Yes, that would be safer than the risky choices they are now turning to. But by getting only 3 – 5% on these safe investments they would be admitting that their “assumed” rate of 7.75% is phoney. They would be admitting to taxpayers that they are far more underfunded than they claim, and that taxpayers are on the hook for this huge unfunded future liability.

[EconProf]

Agree with the previous posters.
A PM company will charge you 8 – 10% of the monthly rents and may do very little to earn that. They have no incentive to minimize your expenses, and if repairs are needed simply place phone calls to their favorite contractors.
Better to keep rent low so you can be choosy about tenants and thereby minimize future problems. Pay a friend or relative here to take care of things, and be generous with their compensation arrangement, but do it on a piecemeal basis, not as a straight percentage of rent.

[EconProf]

We all agree that wealth disparity is too great in America, and has been getting worse. My argument with the video is that it erred in confusing income with wealth in several places.
It is when liberals and conservatives debate the causes of this sad trend that we most disagree. I would argue that many seemingly popular policies create or foster ongoing poverty, such as minimum wage laws (and proposed hikes therein), overly generous entitlements that discourage work and encourage family breakup, and awful inner-city schools with unionized teachers and monopoly power as opposed to charter schools or vouchers. The poor, especially the young poor, need to get on the first rung of that employment ladder so they can work their way up, and too often well-intentioned policies actually thwart them.

[EconProf]

This is an ingeniously effective video, and will mislead many people. It’s major flaw is to misunderstand stocks and flows. Income is a flow measured over time and wealth is a stock. Income statements vs. balance sheets, annual salary vs. personal net worth, etc.
Two ways (among many) to measure personal financial well-being are one’s income and one’s net worth–assets minus liabilities.
Naturally America’s poor look worse off when considering their wealth compared to that of the top tiers. But if we compared their level of income to that of the rich, they would be far closer together.
Government measures of income always ignor “in-kind” income, such as food stamps (possibly $500/month for some families), free medical care, free or nearly free housing, free child care, subsidized utilities, free phones, etc. Add those in and their income doesn’t look as bad. Furthermore, the earned-income tax credit ADDS to their income at tax time, such that if they earn, say $15,000 per year in a job, the IRS sends them a check for $5,000 per year at tax time. (In truth, I am not sure if this is considered part of their income by the statisticians).
Furthermore, income comparisons conveniently look at pre-tax, not after-tax income. The rich in the high tax brackets obviously don’t get to spend all that high income. In addition, they save a good share of that after-tax income, which feeds investment, new plant and equipment, hiring, etc.
A final consideration should take into account consumption per hour worked. Higher income people work more hours than poor people. Yes, I know, the poor often can’t work, or want to but can’t get hired for many reasons. But the fact remains that in going from the poor tier to the middle tiers to the highest tiers, hours worked increases.
The video in two places confused income with wealth, a fatal flaw if they are expecting credibility. A better measure of well-being is the consumption level of the different tiers while taking work hours into effect.
That would be a more accurate measure of “fairness” than personal net worth.

[EconProf]

BearishGirl: Please reread and take to heart Ren’s comments about your posts. Your responses showed it had no impact on you. But it was constructive criticism and probably represents the feelings of many Piggs.
Anyone else agree?

[EconProf]

What these comments ignor is that the will of San Diego voters has been thwarted. We took a long look at public sector pensions and the ominous trends for taxpayers and voted to rein in the excesses. Because of a technicality, the voters’ choice will now be delayed, or perhaps denied, depending on what the courts decide.
In presenting the mountain of data above, CA Renter criticizes taxpayer advocates for cherry-picking dates to make the pensions’ rate of return look bad, such as the 2000 – present ROR. He is correct that that is not a fair benchmark, since the Dow Jones Average is up only about 20% from that dot-com bubble year. But neither is it fair to pick the near doubling of the DJA from four years ago–an anomally that will not likely continue.
Along those lines, public sector unions usually pick the past 30 years of market performance to judge their expected future rates of return in their portfolio. But the Dow was at 800 in 1982 and is 14,000 now. As a result, they appear reasonable when projecting a 7.75% rate into the future. This keeps their members’ contribution share artifically low as well as that of current taxpayers, hiding the exploding future liability of taxpayers. This keeps current politicians happy, as they kick the can down the road.
But in the new normal of our economy, 7.75% is illusory and dishonest. No one should reasonable expect that now. Companies are rapidly revising downward their expected ROR’s and responsibly setting aside money to cover their future obligations. The public sector needs to face reality as well.
Private sector taxpayers work well into their sixties before they can retire and get a far smaller pension or social security check than the unionized public sector workers who tend to retire in their fifties. That’s why San Diego voters voted as they did.

[EconProf]

Correct, Happs.
I could not pull up your reference, but noticed a few days ago that a report showed that the hottest housing market of any city, YOY, is Phoenix. They had a 20%+ rate of appreciation, way above the other cities cited.
Of course much of this was simply recovering from Phoenix’s worse-than-average collapse after the bubble peak.
But this is one more piece of information for our thread originator to weigh in his decision about relocating.

[EconProf]

OK, you guys have each had your say and more or less exhausted the debate about the sequester’s impact on local, San Diego employment. Let’s get back to the bigger philosophical question: how big is the dollar impact of this cut in total government spending, and what should our take on that be?
At $85 billion, it represents less than one-tenth of this year’s DEFICIT spending. It is under 3% of government outlays. IOW, about 40% of current government outlays this year are borrowed from our children. Isn’t this a bit, uh, immoral? Shouldn’t we be looking for ways to cut a lot more? Shouldn’t congress and the President have been identifying the many egregious examples of waste, overspending, and over-promised entitlements in recent months? Neither side has had the courage to name specific cuts because that gives the other side the chance to rail against their heartlessness. This is a game that has been played most effectively by the Democrats, and now the Republicans are understandably standing down and saying if the only cuts we can get are blunderbuss, accross the board ones, we’ll take them. It is better than nothing.
Incidentally, the “cuts” are in reality only a cut in the rate of growth. Actual government outlays, with the sequester, will still go up this year in absolute terms, from $3.538 to $3.538 trillion. Some hardship.

[EconProf]

When I discovered Piggington years ago it was a lonely voice in the wilderness, a prophet calling out a housing bubble, contrary to the conventional wisdom of the day. Now that most people realize that we were right, we are less interesting….in short, a victim of our own success.

[EconProf]

We are seeing a lot of scary claims about how much the sequester will hurt. But just how big is it in our overall federal budget?
It is $85 billion in a budget of $2.5 trillion. That puts it at about three percent of our federal spending.
Since our federal spending has exploded in the past four years, it should be easy to find the low hanging fruit and trim the fat. Instead, we will hear sob stories of cuts that hurt real people and valued programs. Instead of cutting waste, they will create real victims to pull at our heartstrings. And this strategy will probably work–it already is working with many people here.

[EconProf]

Of course immigrants are just as valid. But this discussion is about whether people are moving into or out of CA vis-a-vis other states.
My point was that a state’s population growth or lack of it is the product of other factors as well, such as immigration and birth rates. Those factors are high for CA, which offsets the net out-migration of Californians to other states. People are leaving in droves, so let’s address the problems causing this.
Incidentally, we need those immigrants and fertile families to offset the plunging birth rate. Social security and medicare are doomed given present trends. Only a growing economy and growing population can bail these programs out.

[EconProf]

While it is true that our state’s population growth in the decade to 2010 puts us about in the middle of all states, it is due largely to our higher than average birth rate, and our status as destination for immigrants, legal and illegal. Take away those factors and we have a clear net outflow of people to other states.
Plus, the decade 2001 to 2010 is old data. The exodus of people has probably accelerated since our unemployment rate 2010 to 2013 has been greater than most other states.

[Author]

Posts