[patientrenter]

davelj’s scenario looks reasonable, although I am more conservative myself.

For every year you want to be able to live off savings, you will need today to earn a lot more than you spend. Let’s make some assumptions and do simple math here:

Assumptions
1. Assume you’ll think you have enough when your savings would last you through age 92.

2. Assume you first become able to retire when you’re age 62.

Simple math
Under these assumptions, you’ll be earning for (62-42) / (92-42) = 20/50 = 40% of your life. So if you spend 40% of your net after-tax income during those earning years (including expenditures on cars and rent or other housing expenses) and save the other 60%, you should be on track for retirement as early as age 62.

You can adjust the numbers to fit with your own goals for financial independence and security.

What I am doing here is conservative because it assumes your son and others in his generation who are still working when you want to be retired will only want to provide you with $1’s worth of real goods and services to you for each $1’s worth of goods and services you provided to his generation. Most baby boomers assume the generation after them will be much more generous than that, even though there are fewer of them. We shall see.

Patient renter in OC

[patientrenter]

davelj’s scenario looks reasonable, although I am more conservative myself.

For every year you want to be able to live off savings, you will need today to earn a lot more than you spend. Let’s make some assumptions and do simple math here:

Assumptions
1. Assume you’ll think you have enough when your savings would last you through age 92.

2. Assume you first become able to retire when you’re age 62.

Simple math
Under these assumptions, you’ll be earning for (62-42) / (92-42) = 20/50 = 40% of your life. So if you spend 40% of your net after-tax income during those earning years (including expenditures on cars and rent or other housing expenses) and save the other 60%, you should be on track for retirement as early as age 62.

You can adjust the numbers to fit with your own goals for financial independence and security.

What I am doing here is conservative because it assumes your son and others in his generation who are still working when you want to be retired will only want to provide you with $1’s worth of real goods and services to you for each $1’s worth of goods and services you provided to his generation. Most baby boomers assume the generation after them will be much more generous than that, even though there are fewer of them. We shall see.

Patient renter in OC

[patientrenter]

davelj’s scenario looks reasonable, although I am more conservative myself.

For every year you want to be able to live off savings, you will need today to earn a lot more than you spend. Let’s make some assumptions and do simple math here:

Assumptions
1. Assume you’ll think you have enough when your savings would last you through age 92.

2. Assume you first become able to retire when you’re age 62.

Simple math
Under these assumptions, you’ll be earning for (62-42) / (92-42) = 20/50 = 40% of your life. So if you spend 40% of your net after-tax income during those earning years (including expenditures on cars and rent or other housing expenses) and save the other 60%, you should be on track for retirement as early as age 62.

You can adjust the numbers to fit with your own goals for financial independence and security.

What I am doing here is conservative because it assumes your son and others in his generation who are still working when you want to be retired will only want to provide you with $1’s worth of real goods and services to you for each $1’s worth of goods and services you provided to his generation. Most baby boomers assume the generation after them will be much more generous than that, even though there are fewer of them. We shall see.

Patient renter in OC

[patientrenter]

davelj’s scenario looks reasonable, although I am more conservative myself.

For every year you want to be able to live off savings, you will need today to earn a lot more than you spend. Let’s make some assumptions and do simple math here:

Assumptions
1. Assume you’ll think you have enough when your savings would last you through age 92.

2. Assume you first become able to retire when you’re age 62.

Simple math
Under these assumptions, you’ll be earning for (62-42) / (92-42) = 20/50 = 40% of your life. So if you spend 40% of your net after-tax income during those earning years (including expenditures on cars and rent or other housing expenses) and save the other 60%, you should be on track for retirement as early as age 62.

You can adjust the numbers to fit with your own goals for financial independence and security.

What I am doing here is conservative because it assumes your son and others in his generation who are still working when you want to be retired will only want to provide you with $1’s worth of real goods and services to you for each $1’s worth of goods and services you provided to his generation. Most baby boomers assume the generation after them will be much more generous than that, even though there are fewer of them. We shall see.

Patient renter in OC

[patientrenter]

DaC, I see what you’re saying: Lend far more to a new purchaser than the home will be worth in 3 years time, because that way you boost the price today and so take less of a loss when you foreclose next month on the guy next door who bought/HELOC’d last year.

This would make some sense in a monopoly, where only one investor provided all old and new mortgage money. But many of the parties involved in mortgages have changed. Why would new investors in mortgages want to support the people who bought last year’s mortgages?

Patient renter in OC

[patientrenter]

DaC, I see what you’re saying: Lend far more to a new purchaser than the home will be worth in 3 years time, because that way you boost the price today and so take less of a loss when you foreclose next month on the guy next door who bought/HELOC’d last year.

This would make some sense in a monopoly, where only one investor provided all old and new mortgage money. But many of the parties involved in mortgages have changed. Why would new investors in mortgages want to support the people who bought last year’s mortgages?

Patient renter in OC

[patientrenter]

DaC, I see what you’re saying: Lend far more to a new purchaser than the home will be worth in 3 years time, because that way you boost the price today and so take less of a loss when you foreclose next month on the guy next door who bought/HELOC’d last year.

This would make some sense in a monopoly, where only one investor provided all old and new mortgage money. But many of the parties involved in mortgages have changed. Why would new investors in mortgages want to support the people who bought last year’s mortgages?

Patient renter in OC

[patientrenter]

DaC, I see what you’re saying: Lend far more to a new purchaser than the home will be worth in 3 years time, because that way you boost the price today and so take less of a loss when you foreclose next month on the guy next door who bought/HELOC’d last year.

This would make some sense in a monopoly, where only one investor provided all old and new mortgage money. But many of the parties involved in mortgages have changed. Why would new investors in mortgages want to support the people who bought last year’s mortgages?

Patient renter in OC

[patientrenter]

DaC, I see what you’re saying: Lend far more to a new purchaser than the home will be worth in 3 years time, because that way you boost the price today and so take less of a loss when you foreclose next month on the guy next door who bought/HELOC’d last year.

This would make some sense in a monopoly, where only one investor provided all old and new mortgage money. But many of the parties involved in mortgages have changed. Why would new investors in mortgages want to support the people who bought last year’s mortgages?

Patient renter in OC

[patientrenter]

“We should go back to 10-20% down…”.

I don’t get it. Which Piggington would lend their own (unborrowed) cash to an unrelated third party to finance 90% of a home’s purchase price today, if they got just 3-4% per year over the yield on zero-risk Treasuries? Most people on this blog believe home prices will decrease by well over 10% within the next 1-3 years. Most people on this blog believe homeowners, with good or bad credit, who become underwater on their homes by a large $ amount will walk away.

Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.

Patient renter in OC

[patientrenter]

“We should go back to 10-20% down…”.

I don’t get it. Which Piggington would lend their own (unborrowed) cash to an unrelated third party to finance 90% of a home’s purchase price today, if they got just 3-4% per year over the yield on zero-risk Treasuries? Most people on this blog believe home prices will decrease by well over 10% within the next 1-3 years. Most people on this blog believe homeowners, with good or bad credit, who become underwater on their homes by a large $ amount will walk away.

Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.

Patient renter in OC

[patientrenter]

“We should go back to 10-20% down…”.

I don’t get it. Which Piggington would lend their own (unborrowed) cash to an unrelated third party to finance 90% of a home’s purchase price today, if they got just 3-4% per year over the yield on zero-risk Treasuries? Most people on this blog believe home prices will decrease by well over 10% within the next 1-3 years. Most people on this blog believe homeowners, with good or bad credit, who become underwater on their homes by a large $ amount will walk away.

Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.

Patient renter in OC

[patientrenter]

“We should go back to 10-20% down…”.

I don’t get it. Which Piggington would lend their own (unborrowed) cash to an unrelated third party to finance 90% of a home’s purchase price today, if they got just 3-4% per year over the yield on zero-risk Treasuries? Most people on this blog believe home prices will decrease by well over 10% within the next 1-3 years. Most people on this blog believe homeowners, with good or bad credit, who become underwater on their homes by a large $ amount will walk away.

Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.

Patient renter in OC

[patientrenter]

“We should go back to 10-20% down…”.

I don’t get it. Which Piggington would lend their own (unborrowed) cash to an unrelated third party to finance 90% of a home’s purchase price today, if they got just 3-4% per year over the yield on zero-risk Treasuries? Most people on this blog believe home prices will decrease by well over 10% within the next 1-3 years. Most people on this blog believe homeowners, with good or bad credit, who become underwater on their homes by a large $ amount will walk away.

Are we all stupid? Or are the investors still lending at 10% down all stupid? It’s one or the other. Even 20% down seems borderline crazy today, outside of Temecula and other places where prices have already dropped by 40% or more.

Patient renter in OC

[patientrenter]

equalizer, you’re just arguing that people acting in concert(that’s corporations) are more evil than people acting as individuals. I don’t accept your premise, but who cares if it’s right or wrong? I just don’t want the place I live in to be populated by a lot of people who take personal responsibility as lightly as…. some do.

Patient renter in OC

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