[myito]

PD — Only if you sell. My point is that it is only a paper loss until you try to liquidate. If you are someplace for the long haul, the fluctuations of the market become less significant.

When I began trading stocks I lost a lot of money because I got scared when my stocks would drop and I sold. Had I held certain equities I would have outperformed any bank, mutual fund interest rate gain.

[myito]

Rustico,

I think your advice to Ricechex is good. When I read the post I thought — “stay where you are until you have to move.”

Ricechex, if the rental is still working out don’t jump ship until you have to. You might also want to check and see if you are in a rent controlled building. If so, even if the landlord dies you may be protected against being thrown out. For my condo, even if I sell it I would be responsible for paying the tenants a relocation fee (something like $5K I believe).

If you ascribe to the overarching view on this site, chances are you will be able to get a better, lower priced home in a few years when you may be forced to move.

I would diversify my assets putting some in a stable option (like mutual fund, CD or high-rate bank account like ING) and then possibly investing some elsewhere. The stock market has been peforming well lately but many believe this bull run is coming to a close so I’d be careful with stocks. I was told Gold and international stocks are good, but I have not doing enough investigating to speak on the topic.

Best of luck to you.

[myito]

Rustico,

I think your advice to Ricechex is good. When I read the post I thought — “stay where you are until you have to move.”

Ricechex, if the rental is still working out don’t jump ship until you have to. You might also want to check and see if you are in a rent controlled building. If so, even if the landlord dies you may be protected against being thrown out. For my condo, even if I sell it I would be responsible for paying the tenants a relocation fee (something like $5K I believe).

If you ascribe to the overarching view on this site, chances are you will be able to get a better, lower priced home in a few years when you may be forced to move.

I would diversify my assets putting some in a stable option (like mutual fund, CD or high-rate bank account like ING) and then possibly investing some elsewhere. The stock market has been peforming well lately but many believe this bull run is coming to a close so I’d be careful with stocks. I was told Gold and international stocks are good, but I have not doing enough investigating to speak on the topic.

Best of luck to you.

[myito]

Cyphire,

I like your post, but your thinking was a bit simplistic and somewhat faulty on a few levels. I’m going to be somewhat tactical (robotic) in my responses for the sake of responding to your thoughtful feedback:

1) I don’t buy into the concept that if you don’t own you are a loser. I rent now and just prefer to own. I like the stability that comes with it and feeling like I can bond with like-minded neighbors. Living in a rental home in La Jolla puts you in a similar camp. Given how much you are paying for rent, you are the exception and not the norm.

2)After our downpayment we will have about $100-120K left over. The home we are buying is down about 20% from the height of the market.

3) Your reference to $500K in 401K only funding a few years of retirement is where you logic becomes fuzzy. I have been in the corporate workforce for 6 years (since 29) and have built up substantial income in bank and 401K — my earning power is increasing and I earn an additional $2K-4K per month (depending on month) doing consulting. But for the sake of your argument, let’s assume I suddenly stopped saving in my 401K and savings.

Let’s go with a 30-year scenario which is good in terms of housing and retirement scenarios given my age.

Just sitting on the 401K (not adding) in 30 years @ a modest 5% interest rate would give me about $2.2 million ($2.6 million if I add just $5,000 a year). A far cry from the 500K today.

The 100K in the bank @5% interest and saving a modest $100 per month on top of it (let’s assume some stocks and some conservative CD buying with this money) would result in $530K in 30 years.

So now I am at about $2.72 to $3.1 million in cash assets — which I will be able to access because I will be “of age”.

3) I get sick of people using this thing about what houses were worth 10-12 years ago. What about inflation? For the sake of your argument let’s go there. let’s take a $1 million dollar home in today’s market. Assuming it was $350K in 1995 it would be worth about $500K today (given a 3% compounded interest rate for inflation).

Let’s say I buy this $1 million dollar home today and it depreciates say by 1/3 over the next 5 years and then appreciates by normal inflation rates (3-4%). At the end of that 30 year period, the home would still be worth $1.4 million. I would not count that toward my liquidity but the home is paid for and I am sitting on a very hefty profit. I’m failing to see your logic.

4) True homes are not like the stock market in many regards, but they are similar in one way — you only lose if you sell when your equity is negative. The rest is just a paper loss. It’s amazing to me that many here criticize flippers, but your mentality about owning is very similar. Not everyone is in it for a quick dollar!

5) No, I am not buying in Carmel Valley or 4S ranch.

Cheers!

Myito

[myito]

Cyphire,

I like your post, but your thinking was a bit simplistic and somewhat faulty on a few levels. I’m going to be somewhat tactical (robotic) in my responses for the sake of responding to your thoughtful feedback:

1) I don’t buy into the concept that if you don’t own you are a loser. I rent now and just prefer to own. I like the stability that comes with it and feeling like I can bond with like-minded neighbors. Living in a rental home in La Jolla puts you in a similar camp. Given how much you are paying for rent, you are the exception and not the norm.

2)After our downpayment we will have about $100-120K left over. The home we are buying is down about 20% from the height of the market.

3) Your reference to $500K in 401K only funding a few years of retirement is where you logic becomes fuzzy. I have been in the corporate workforce for 6 years (since 29) and have built up substantial income in bank and 401K — my earning power is increasing and I earn an additional $2K-4K per month (depending on month) doing consulting. But for the sake of your argument, let’s assume I suddenly stopped saving in my 401K and savings.

Let’s go with a 30-year scenario which is good in terms of housing and retirement scenarios given my age.

Just sitting on the 401K (not adding) in 30 years @ a modest 5% interest rate would give me about $2.2 million ($2.6 million if I add just $5,000 a year). A far cry from the 500K today.

The 100K in the bank @5% interest and saving a modest $100 per month on top of it (let’s assume some stocks and some conservative CD buying with this money) would result in $530K in 30 years.

So now I am at about $2.72 to $3.1 million in cash assets — which I will be able to access because I will be “of age”.

3) I get sick of people using this thing about what houses were worth 10-12 years ago. What about inflation? For the sake of your argument let’s go there. let’s take a $1 million dollar home in today’s market. Assuming it was $350K in 1995 it would be worth about $500K today (given a 3% compounded interest rate for inflation).

Let’s say I buy this $1 million dollar home today and it depreciates say by 1/3 over the next 5 years and then appreciates by normal inflation rates (3-4%). At the end of that 30 year period, the home would still be worth $1.4 million. I would not count that toward my liquidity but the home is paid for and I am sitting on a very hefty profit. I’m failing to see your logic.

4) True homes are not like the stock market in many regards, but they are similar in one way — you only lose if you sell when your equity is negative. The rest is just a paper loss. It’s amazing to me that many here criticize flippers, but your mentality about owning is very similar. Not everyone is in it for a quick dollar!

5) No, I am not buying in Carmel Valley or 4S ranch.

Cheers!

Myito

[myito]

You are right, the tax savings don’t cover my costs, but it certainly helps.

Rental from 11 years ago used as an illustrative purpose to let you know that the suckers that pay my mortgage are paying much more than I do — which is likely the case with your $1 million condo as well. Do you really think they paid that much for it? Don’t kid yourself, you are covering their mortgage and likely more.

I am confident in my decisions today, because I am not waiting to get in on a goldmine because I missed it in the past. Sorry, but you are in that latter camp.

cheers!

[myito]

You are right, the tax savings don’t cover my costs, but it certainly helps.

Rental from 11 years ago used as an illustrative purpose to let you know that the suckers that pay my mortgage are paying much more than I do — which is likely the case with your $1 million condo as well. Do you really think they paid that much for it? Don’t kid yourself, you are covering their mortgage and likely more.

I am confident in my decisions today, because I am not waiting to get in on a goldmine because I missed it in the past. Sorry, but you are in that latter camp.

cheers!

[myito]

There is no confusion what-so-ever on my tense. Renting now while I await my home being completed and it SUCKS!

Aside from not getting any tax relief (regardless of how small) your money is being used to help someone else pay their mortgage and finance their future. On top of all that — your options of what you can do in a rental are very limited. As a renter and as someone who has tenants, I know what I speak.

Last year I owed about $10K in taxes (me alone not including my husband) and had I not owned property it would have been much worse.

Renting sounds like it works for you so more power to you. It does not work for me on multiple levels, though I am glad people are willing to rent as it pays the mortgage and gives me extra cash on my property in LA.

Cheers!

[myito]

There is no confusion what-so-ever on my tense. Renting now while I await my home being completed and it SUCKS!

Aside from not getting any tax relief (regardless of how small) your money is being used to help someone else pay their mortgage and finance their future. On top of all that — your options of what you can do in a rental are very limited. As a renter and as someone who has tenants, I know what I speak.

Last year I owed about $10K in taxes (me alone not including my husband) and had I not owned property it would have been much worse.

Renting sounds like it works for you so more power to you. It does not work for me on multiple levels, though I am glad people are willing to rent as it pays the mortgage and gives me extra cash on my property in LA.

Cheers!

[myito]

Renting does suck. I own a condo in LA that I bought in 1996 and I have tenants in it and they are paying 3-4x my mortgage and they rented when homes were selling much lower. Had they bought the same condo their payment would have been less than their rent.

For those who are interested, I enjoy the dialogue here and that is why I continue to post/visit. One will never be truly informed if they don’t hear all perspectives.

Thanks for the spirit that continues.

[myito]

Renting does suck. I own a condo in LA that I bought in 1996 and I have tenants in it and they are paying 3-4x my mortgage and they rented when homes were selling much lower. Had they bought the same condo their payment would have been less than their rent.

For those who are interested, I enjoy the dialogue here and that is why I continue to post/visit. One will never be truly informed if they don’t hear all perspectives.

Thanks for the spirit that continues.

[myito]

All,

The responses are overwhelming — obviously I struck a cord. Sorry if my message came across as looking down on “renters” that was not the intent. I merely tried to present an opposing side of the equation.

For my family, owning is best. To the mom above — I can appreciate where you are and wish you the best — being a mom is the toughest job in the world. I stayed home for a year and it was hard. Am I apologetic though for making a different decision than you? No. My parents raised 3 kids in an apartment and we are just fine, as people first and as productive people next.

I am a 35 year old mom of a 2 year old and delayed having a child until I met the right husband. In the meantime, I worked my ass off and went to college, got 3 degrees and worked and worked. I still work not because it’s a mandate but because I choose to and I happen to enjoy the work I do. Point is…we all make choices that work for us and no one choice is better than the other.

The point of my original post was to make others on the board aware of the fact that this negative sentiment (which is very pervasive on this board) about home ownership is way overdone. The market goes up, the market goes down.

I’ve read every post since my post and am convinced more than ever that people who come here, come to have their perspective supported. More power to you — but without opposing views what credence do your points have?

For what it is worth, I think everyone here is very bright and probably much more aware of what is happening than others. I think some of you can use some education in etiquette and taking a chill pill. If you truly believe the market is crashing, sit back and relax and enjoy the ride down while you await your golden oppportunity to jump back in.

Whatever you choose, good luck and remember you can’t take any of it with you.

[myito]

All,

The responses are overwhelming — obviously I struck a cord. Sorry if my message came across as looking down on “renters” that was not the intent. I merely tried to present an opposing side of the equation.

For my family, owning is best. To the mom above — I can appreciate where you are and wish you the best — being a mom is the toughest job in the world. I stayed home for a year and it was hard. Am I apologetic though for making a different decision than you? No. My parents raised 3 kids in an apartment and we are just fine, as people first and as productive people next.

I am a 35 year old mom of a 2 year old and delayed having a child until I met the right husband. In the meantime, I worked my ass off and went to college, got 3 degrees and worked and worked. I still work not because it’s a mandate but because I choose to and I happen to enjoy the work I do. Point is…we all make choices that work for us and no one choice is better than the other.

The point of my original post was to make others on the board aware of the fact that this negative sentiment (which is very pervasive on this board) about home ownership is way overdone. The market goes up, the market goes down.

I’ve read every post since my post and am convinced more than ever that people who come here, come to have their perspective supported. More power to you — but without opposing views what credence do your points have?

For what it is worth, I think everyone here is very bright and probably much more aware of what is happening than others. I think some of you can use some education in etiquette and taking a chill pill. If you truly believe the market is crashing, sit back and relax and enjoy the ride down while you await your golden oppportunity to jump back in.

Whatever you choose, good luck and remember you can’t take any of it with you.

[myito]

P.S. I think many of you on the sidelines today will remain on the sidelines in the future. There will always be some reason not to buy unless you are buying for the right reason. I have witnessed it time and time again.

[myito]

P.S. I think many of you on the sidelines today will remain on the sidelines in the future. There will always be some reason not to buy unless you are buying for the right reason. I have witnessed it time and time again.

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