[forsale_2007]

Did you get into a car accident without insurance? How can there be such a large gap in what it's worth and what you owe?

What are you looking to do? Maybe you can submit your car to pimp my ride.

 

 

That's easy to answer….(1) IT's a DODGE…(2) crappy loan terms

The economics of used cars are interesting. The problem with all those incentives that Dodge is piling onto new cars is that it's creating a huge issue with the value of used cars. Also, dodge has crappy resale value, because a good portion of the cars are part of fleet sales to rental companies (which in itself drives the car's value down). Also, dodge has pretty crappy reliability, which factors into resale. Also, the intrepid is a discontinued model (adding additional downward pricing pressure).

 

 

 

[forsale_2007]

Not to rain on your parade…But this is exactly why I never understood buying a new car on a loan for a make/model that has the worst resale value, questionable reliability, and especially if you don’t plan on driving it into the ground (keep it for 10-15 years).

1)If you plan on keeping your car for a long time, then you should probably buy something that is fairly reliable (toyota or honda). And to save money, you should probably buy something slightly used.

2)If you plan on switching cars 2-4 years and/or insist on a brand that has crappy resale/reliability, you probably should take a lease with a low drive off cost. Buy the time your warranty is out, the lease is over, and you move on and you don’t deal with the huge depreciation.

In the worst case, you take out a loan on a car with crappy resale value and crappy reliability. On one hand, keeping it beyond the warranty => you pay for a lot of repairs. Meanwhile, in order to get out of the car, you have to pay the remaining balance, which is probably considerably much higher than the car’s value. So you’re like damned if you keep the car (repairs) and damned if you don’t (repay the loan).

1) The other options is you keep your car, suck it up, and learn how to fix it yourself.

2) Go talk to a honda/toyota dealer, they might get you into a lease/loan of a honda/toyota and help you get out of your current car, at the cost of asking you bend over on new terms of the second car. Again, you’re probably going to get screwed on the second car loan, but at least you won’t have to deal with the reliability issues of the car.

[forsale_2007]

Uh… the title of the article is slightly misleading….
The home was purchased with 4 people, each earning about $15k, who purchased a $700k home, not just 1 person earning $15k.

See how the media likes to distort the truth 🙂

Plus, unlike most people, I’m sure those folks paid $0 taxes.
….Still, $60k household income with a $700k home is ridiculous.

[forsale_2007]

I don’t understand why any buyer in the right mind would want to do this. $700k with a 60k cash back (even if legal) means you would end up paying for higher property tax than you would need to. Of course you could reassess your property tax. But then you are subject reappraisal at any later date.

When we bought our home, we tried to negotiate with the seller to discount the home price if we agreed to pay all costs (including agent fees) to reduce the assessed value. But the seller didn’t want to deal with the hassle.

[forsale_2007]

Agreed. Like I said, I’m back in the stock market. It hasn’t moved that quickly yet. God I hope Intel and Yahoo’s earnings are decent today 🙂

[forsale_2007]

The rule of thumb with common economics is if you can afford it then buy it. If you have to stretch to your last penny then reevaluate where you live and what your needs are.

 

If you are talking about buying your primary home, I couldn't agree with this more.  Regardless of whether you will lose some money or not, a lot of our purchases are in general not financially sound to begin with. For example, why buy say a a performance car when you can buy a Hyundai.Etc,etc.etc, knowing that almost all cars depreciate exponentially the moment you drive off the lot? Some do it for status (dumbest reason imho). Others do it because they can't stand driving an appliance that handles like a boat. What "price" you put on the intangibles is really a personal choice. So it really depends on if you can afford to purchase without overly stretching, your own tolerance for the intangible naggings, and your ability to live/weather if your home falls below what you paid for. On the other hand, if you're considering a home purchase as an investment, well I  personally wouldn't recommend this right now too.

 

Another thing, a lot of people are hoping for a 50-60% correction. I'm hoping for some sort of correction so that a home makes sense to be an investment again. But for me, I don't look forward to a 50-60% correction if it were to actually were to happen.I would guess that very few people would (1) have the financial means (2) be pysicologically fit to make a purchase at those levels. Humans tend to move in herds. If the sky is falling, most people will continue to think it will continue to fall. If housing is soo bad, and umemployment is so bad, and your neighbors are closing shop or losing their jobs left and right, would you have the stomach to make a big purchase at that time? What makes you think you would be in any different shape than those around you? And if you're planning to buy a home at the bottom, how's that different from trying to predict when the bottom will hit in say the stock market.  Few people will be ready when the bottom comes, most still won't buy.For example, when the stock market crashed after 9/11, I'd be curious how many folks got back into the market when things were near "bottom"…

 

 

[forsale_2007]

Funny thing about door knocking is that it can be very effective. I have a friend that has been in the business about 30 years and is very personable. Whenever he gets slow and needs a little business he goes out door knocking. If he knocked on your door you would love speaking with him, he's a real character and would make you laugh with his nedless supply of great stories. Every time he does it, he comes back with a couple new clients just as he has done for the last 30 years.

 

 

I don't doubt that it actually might be effective. It's not that I would be annoyed if one or two realtors did that. But there was a period when 5 or 6 would do that on the same weekend. It was as bad as the telemarketer that just wouldn't go away. I don't have a problem with experienced realtors that actually know what they are doing. It's all the amateur ones that don't know half of what they're talking about that really bugs me.  

[forsale_2007]

LOL…..

Actually it’s pretty funny. Back in 2002, I had Realtors that knocked on my door asking if we would be interested in selling our home.

Now, I have Realtors knocking on my door asking if we would be interested in buying another.

The ones that go door to door definitely seem pretty desperate.

There’s too many Realtors. Half of them shouldn’t be, because they have no clue. Just like there were too many dot com workers. Half of those shouldn’t have been called “Software Engineers”.

The good news, is once the weeding out gets done, those that are real realtors that stay will do just fine.

[forsale_2007]

Imho….I think there’s some truth to that article.

But here’s my take. So far SoCal has been doing well because jobs are plenty there. But one thing I think will happen…SoCal (specifically LA) will probably have a nasty downturn once defense spending decreases…a good portion of the SoCal’s economy depends on the defense industry still. I remember the 80’s downturn there all too well (I remember being in 7th grade and my MechDrawing teacher complaining that he got wiped out because he “invested” too much in real estate at the peak…At that time, everyone was buying real estate, just like in 2002…Even school grade teachers who were otherwise clueless about investing were “in the market”.)

San Diego use to be the same way from my understanding, although i believe over the past 10 years it’s sort of more diversified now. There’s still some defense exposure, but not quite the same level as i believe in the 80’s.

[forsale_2007]

Doh! I almost forgot to pay property tax a few days ago. Thank fully I turned on the radio to NPR that morning and it mentioned about property tax being due….

[forsale_2007]

It ain’t gonna happen before 2008. Now if we have an entire democratic gov after 2008, well then we probably got more things to worry about than just bailing out these people…such as taxing the upper middle class to support the irresponsible.

i’m not a political advocate one way other the other. I just don’t like it when only one political party controls all of government either democrat or republican.

The best government is when there’s an near equal split in power, because nothing from a political agenda gets done…And that’s good, considering neither parties really do anything that makes financial sense. I’m better off if they leave me alone.

America needs a new political party that caters to the financially responsible.

[forsale_2007]

Vanguard has a plan comparison tool. Those numbers compared the nevada plan (vanguard/upromise) with the scholarshare plan. It’s available on vanguard’s website.

[forsale_2007]

1. The $20/fee for vanguard accounts is waived for accounts >=$3000.

2. I know CA gives no pretax deductions. But, i was referring to earnings from the 529. My initial understanding was that earnings from 529 are federal exempt for qualified withdrawals for all 529 plans (irrespective of which where you live), but as a CA resident, your 529 earnings are only exempt if you’re participating in the CA scholarshare plan. But I think the latest info I have is that that this isn’t the case. Earnings from all 529 plans are CA state tax exempt.

Program manager Upromise Investments, Inc.
Fidelity Investments
Distribution manager Vanguard Marketing Corporation
Upromise Investment Advisors, LLC

Fidelity Brokerage Services, LLC
Program type Tuition Savings
Tuition Savings
Operational date December 10, 2002
October 4, 1999
Residency required No
No

State benefits
Maximum annual state tax deduction No state income tax.
0
Other benefits No state income tax.
No state tax deduction for contributions. Qualified withdrawals from this plan and other states’ plans are exempt from California state income tax.
Creditor protection Yes. Creditor protection available. If the debtor lives in Nevada, State statute SB 434 provides that up to $500,000 of assets held in a 529 Plan account may be protected from creditors, depending on when such assets were contributed to the account and whether they are eventually used to pay qualifying higher educational expenses of the designated beneficiary.
No
Beneficiary age restrictions None
None
Transferrable to other family members Initial – anyone. Change – family of original beneficiary
Initial – anyone. Change – family of original beneficiary

Contributions
Minimum opening amount $3,000
$50
Minimum monthly electronic transfer $50
$15
Minimum monthly payroll deduction $50
$15
Maximum funding amount $310,000
$300,000

Fees
Enrollment None
None
Maintenance $20 (for accounts under $3,000)
None
Fund expense Included in Asset Management Fees
Included in Asset Management Fees
Asset management 0.50%-0.70%
0.50%-1.10%

Investment options
Age-based portfolios 3
2
Individual portfolios 19
12
Stock 10
2
Balanced 2
2
Bonds 3
1
Short-term reserves 1
1
Guaranteed 0
0

[forsale_2007]

When I looked at the CA plan versus an out of state plan, my understanding was that

1) if you participated in the CA 529 plan, qualified withdrawals from the 529 plan would both be Federal and State tax exempt.

2) If you participated in an out of state plan, qualified withdrawals would only be federal tax exempt (not state tax exempt).

Someone correct me if I’m wrong.

After looking at Vanguard’s Nevada 529 and looking at Fidelity CA 529, I opted to participate in the Nevada plan because i didn’t like Fidelity’s fund selection. But to get around the state tax issue, I was just planning to open a CA 529 plan and transfer from the nevada plan when the time came.

I considered participating in other state plans, namely because i was interested in certain state laws. For example, some states consider 529 plans like a “retirement” plan and offer asset protection. Generally, those states exclude “retirement” plans from creditors. Unfortunately, it seemed like those state laws only applies to state residences. And CA doesn’t have such laws that would protect your 529 plans from creditors. So it was a moot point.

CA suck. You can just about sue anyone for anything.

[forsale_2007]

>>>In the chinese culture, owing a home shows that you are responsible and it is not uncommon for a newly married couple to have their parents living with them. Visit these communities and you will see light of day. Now don't get me wrong. I have no issues with asian families. They are quiet, respectful and very helpful. You won't see an asian family having a BBQ until 2 am on a wednesday night keeping up all the neighbours like someone straight out of Texas. They respect their neighbors and their home.

 

(…or for that matter go with you on your honeymoon :(. )
And regarding the parents living with the kids. My wife and I am seriously considering buying another place…because she wants her parents to permanently live here and I wouldn't be able to even tolerate my own parents living in the same roof with me (no disrespect to my parents…I lovely them dearly. But we would end up killing each other). I would opt to rent my inlaws a place, except that would be disrespectful. As such, it makes no financial sense to do this,  but keeping my sanity is priceless. Sometimes I wish we didn't have the means to do this because then I could just say they can't live here permanently because I will go insane and we can't afford another place.

 

 

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