patrick.net

You sound like me when my credit was shit.

We Americans for too long have been spending too much money on things we don't need. I too do not plan on buying anything I don't have to.

gardener1 says

He was flabbergasted. Apparently no other client had ever come into his office without big plans for starting a business overseas and buying a place and making it big, big, bigger.

Of course no other client has ever walked into his office and said what you said since those people typically stay home and stay poor. Why would anyone walk into a financial planners office and tell them, "hey, I don't need your service because I don't plan to spend any money on buying anything." That's like me walking into Burger King and telling them I don't want their burger or anything else they are offering. Instead I want them to tell me how long I should space out my sandwich (that my aunt made me) so it can last me through the day.

I need people like you to pay $2500 rent every month so I can cover my $1200 mortgage on my rental property.

But hey, I can see the appeal in your simple-living philosophy. I guess I just hope that I have money rolling in after retirement and not out like you will be. Maybe I'll have something to pass on to my kids and make things a little easier for them when I am gone.

And the part about your company paying for things... kind of weakens your argument, eh? Finally, before I am sold that you really are convinced of what you are preaching, give us your credit score. Do you really believe what you are saying or do you have no choice but to believe what you are saying?

BayArea says

I need people like you to pay $2500 rent every month so I can cover my $1200 mortgage on my rental property. Understand?

Do you have a negative-amortization mortgage?

How else are you paying only $1200 on a $700,000+ property?

At today's interest rate of 3.5% and 25% down, a $1200 mortgage gets you a $375,000 house. It's not uncommon in parts of the Bay Area to have that level of house rent out for $2500.

That's an 8% annual rent:price ratio...

Why are you so surprised?

Rent4Ever says

Company pays for everything at my house.

If your company pays for everything useful, then of course you dont need to buy anything. Understand that most people need internet and have to pay for it, or need a car and have to buy one.

BayArea says

Why are you so surprised?

Because in the Bay Area, houses are going for $700,000, not $375,000.

So I guess the 15 million storage units packed full of crap, won't be in high demand anymore?

Sike! People love buying crap. Peruse an online dating service for a minute, every girls primary interest is shopping. And every guys primary interest is getting the girl. So the guy falls trap into the mindset that if only he buys more stuff, she will dig the cut of his jib, and then they can buy more stuff together

Disclaimer:

Long

Landfills
Trash services
Storage units

It is true that sometimes it's fun to stop buying stuff. I remember a few guys would call them "M.O.'s"=Material Objects.
If you saved and invested instead of succumbing to your whims and desires you will be better off in the future.
One time when loading our surfboards into my Toyota truck my female companion made some crack about it, and I was pissed off. "I made a bunch of dough with this funky truck, and I can show you the money now." She shut up.
You can buy anything you need on Craigslist today. I wanted another camera for traveling and someone sold a great little Sony with a Zeiss lens for $15. Works great and fits in my pocket the size of a deck of cards.
"Money talks, bullshit walks." I don't really know what this means but I like it.
Most people love to acquire stuff, particularly ladies with clothes, shoes and other stuff like iPhones etc.
I walked the Santa Cruz boardwalk on the 4th and it was interesting to see the teenagers who have probably nothing fooling around with their iPhones. It reminded me of those pictures of chimps playing with shiny objects.
I only want a few things in the future, a better truck, a boat to fish and scuba dive from, and a sailboat. They have small versions of both.
You must make a delicate balance. Give the impression to women that you are very "responsible" with your money and make investments but that you would never deny yourself something you wanted (or by extension, would like to buy for a woman).
Buy stocks and make a portion of the profit of those companies that are getting rich from the consumers around the world who won't stop consuming.

I think that technically we do have given items that certainly outlive people. Houses don't automatically fall apart after 80 years. Of course they do require money for upkeep.

I wouldn't say that renting for everything would be a balance but the concept of sharing certainly is getting stronger.
http://consumerist.com/2010/01/rent-out-your-household-items-for-fun-and-profit.html
http://us.zilok.com/

I've seen book trading services, dvd trading services, men's ties, kid toys and the list goes on and on. If people don't have money for new then they'll buy used or simply start trading.

P2P as a concept makes people think about illegal file trading..but few thought about it in actual physical products. Microlending filled the gap of smaller businesses and larger banks. Likewise this would be like Rent a Center but on a smaller scale.

I would recommend to the OP to move to the hispanic part of town asap, then learn to speak spanish, only speak spanish and nothing else everywhere for a year. Then you might do ok in south america. But they think white skin=rich so good luck.

ptiemann says

wthrfrk80 says

BayArea says

Why are you so surprised?

Because in the Bay Area, houses are going for $700,000, not $375,000.

San Jose has lots of houses under $400k. You can even buy below $300k and still fetch $2000 rent.

You are right, but there's a lot of gangbangers in those hoods.

Wow, people are willing to pay $2000/month to live in the hood with the gangstas?

That's f***ing crazy.

How much is the rent in a "safe" area?

I know these are rhetorical questions. I get that, and they are valid ones.

First, if you want to get all tin-foil-hat like, an owner doesn't "own" anything, they are just renting the land from the government which allows them to maintain title in exchange for property taxes.

Second, if everyone rents, we simply switch over to situations similar to New York City. Rents will go up to what the market will bear. In an extreme situation, we convert to a European style society with families staying in the same rental property for decades.

If what you are really asking is what happens if we stop being a consumerist society, well, let me know when you find out. I agree with Bob Kunstler (author of the Long Emergency and World Made By Hand) that it won't be pretty. Right or wrong, the U.S. (and California in particular) has arranged its values around the "consumer" lifestyle. If that is no longer a viable option, lots of people will be very frustrated.

ptiemann says

San Jose has lots of houses under $400k. You can even buy below $300k and still fetch $2000 rent.

Reason enough not to live in CA.

StoutFiles says

If your company pays for everything useful, then of course you dont need to buy anything. Understand that most people need internet and have to pay for it, or need a car and have to buy one.

No one needs a brand new Acura, Lexus, BMW, or worse yet needs to lease one or 300 cable TV channels ($100/mo), or the newest cellphone and data plan(100/mo). Buy a 3 year old honda or toyota, keep it for 12 years and come out Tens of thousands ahead. Only get basic cable, only get a basic cellphone. Save 150 bucks a month forever on those expenses, added to your vehicle decision alone will save you at least 70K+ over just 10 years. It's really not that difficult. Is having a luxury car, watching cartoon network and having some games on your phone really worth 70k after just 10 years? What about after 30 years?

People have more money now in this country than we've ever had, yet we find stupid things to spend it on.

wthrfrk80 says

BayArea says

Why are you so surprised?

Because in the Bay Area, houses are going for $700,000, not $375,000.

There are lots of 3/2 ranch houses in Sunnyvale selling for under $500K in neighborhoods where 2-bedroom apartments rent for $2100-$2900/month.

Some have broken $400K.

There are also parts of Menlo Park where the same 1950s houses (but with "updated" floors, kitchen, and bathrooms) sell for $1.2-$1.5M

DaleyCenterRegular says

First, if you want to get all tin-foil-hat like, an owner doesn't "own" anything, they are just renting the land from the government which allows them to maintain title in exchange for property taxes.

Very true. With or without the tinfoil hat.

DaleyCenterRegular says

Bob Kunstler (author of the Long Emergency and World Made By Hand) that it won't be pretty. Right or wrong, the U.S. (and California in particular) has arranged its values around the "consumer" lifestyle.

You mean Jim Kunstler? He's a very entertaining guy, even if many of his views are "out there."

wthrfrk80 says

Because in the Bay Area, houses are going for $700,000, not $375,000.

I don't know what to say to this so I am going to walk away really slowly but I will leave you with this median home price list (not everyone living in the Bay Area lives in SF or Marin County):

County May-12
Alameda County $353,500
Contra Costa County $295,000
Marin County $627,000
San Francisco County $700,000
San Mateo County $576,500
Santa Clara County $529,000
Solano County $190,000

dublin hillz says

You are right, but there's a lot of gangbangers in those hoods.

This conservative rental investment argument comes up time and time again. It's partly valid, but at the same time nobody says that you can't be a little selective about who you rent the property out to and you won't be living there. If you want the highest rent to price ratios, then yes, you have to sacrifice a bit on the quality of the neighborhood. I'm ok with that, of course there is a threshold.

drew_eckhardt says

There are lots of 3/2 ranch houses in Sunnyvale selling for under $500K in neighborhoods where 2-bedroom apartments rent for $2100-$2900/month.

Keep in mind that Sunnyvale isn't exactly topping the charts in the rent:price department either.

wthrfrk80 says

Wow, people are willing to pay $2000/month to live in the hood with the gangstas?

That's f***ing crazy.

How much is the rent in a "safe" area?

In San Jose, for a SFH 3/2 rental in a semi-safe area at least $3200.

In Switzerland they are doing quite well and many people rent.
Anyone who owns anything in China for example is actually just borrowing it, there is no system for owning private land in China.
Of course, rich Chinese cover their bets and buy in California and Vancouver, BC.
A rich guy always wants to buy something. A poor guy has to rent. A guy with a few more bucks tries to imitate the rich guy and mortgages his life to buy. A guy who has some money but doesn't care about any of the nonsense may rent or buy, but his desire for freedom makes him tend to rent.
James Bond rented his London apartment, although he seemed to always have plenty of dough from his casino winnings. Go figure.
The Bay Area is becoming popular with 1. asians 2. hispanics 3. yuppies who all want familes and therefore want to buy houses.
There is always something to be said for cash or liquid investments. A pretty young woman with a job, owns a big house in San Pedro N.L. Mexico (highest GDP of any latin city) has no cash or investments.
So, she is showing extreme interest in me and my liquid assets (no pun intended).

clambo says

The Bay Area is becoming popular with 1. asians 2. hispanics 3. yuppies who all want familes and therefore want to buy houses.

Asians and Hispanics wanting families? This looks like a great spot for Melinda Gates to hand out condoms.

BayArea says

I don't know what to say to this so I am going to walk away really slowly but I will leave you with this median home price list (not everyone living in the Bay Area lives in SF or Marin County):
County May-12
Alameda County $353,500
Contra Costa County $295,000
Marin County $627,000
San Francisco County $700,000
San Mateo County $576,500
Santa Clara County $529,000
Solano County $190,000

I didn't realize the prices were so much cheaper further out. What are the median rents in those same areas? Your example of $375k is pretty close to Alameda, what's the median rent there?

dublin hillz says

In San Jose, for a SFH 3/2 rental in a semi-safe area at least $3200.

My goodness, where do you people get the money to pay for that? And it's only "semi-safe."

I have a "good" job and that would eat up almost my entire paycheck after taxes! I'd have to moonlight at the Kwik-E-Mart just to buy food.

wthrfrk80 says

I didn't realize the prices were so much cheaper further out. What are the median rents in those same areas? Your example of $375k is pretty close to Alameda, what's the median rent there?

By further out I assume you mean further out from SF county? If so, Contra Costa and Alameda Counties are not really far out at all... just across the bridge. Marin County is across a different bridge.

As you can see, San Mateo, Marin, Alameda, and Contra Costa Counties all surround SF closely and vary in price significantly. I myself live in Alameda County and work in Contra Costa County (Engineer). My real estate playground is Contra Costa County however, as I can't afford to play in other counties within the Bay Area and not interested in venturing outside of the Bay Area. In fact, looking at that map, there's probably a strong argument that most of Solano, Napa, Sonoma, and Santa Clara Counties aren't even part of the Bay Area.

I got rid of my stuff.

http://www.youtube.com/embed/MvgN5gCuLac

I'm just amazed that a dwelling can cost $700k in one county and only $200K in the next. Unless the $700k county is some kind of "mecca" for rich folks (like The Hamptons on Long Island).

clambo says

If you saved and invested instead of succumbing to your whims and desires you will be better off in the future.
...
Buy stocks and make a portion of the profit of those companies that are getting rich from the consumers around the world who won't stop consuming.

It sounds like you have it figured out...but you had better hope the rest of the world doesn't catch on.

That's one of the problems I have with the whole "game" -- I don't really believe in it. The society we have, the lifestyles we live, the excess consumption are all part of the "foundation" that enable me to put money into stocks and make more down the road. But I don't really buy into it....it's fake, unsustainable, and repulsive in a lot of ways. I don't have faith that it's going to last. We as a country (as a world?) have too much in the unpaid debts column....Of course these things can develop over long time periods, often longer than a lifetime, so I might just be OK...

wthrfrk80 says

dublin hillz says

In San Jose, for a SFH 3/2 rental in a semi-safe area at least $3200.

My goodness, where do you people get the money to pay for that? And it's only "semi-safe."

I have a "good" job and that would eat up almost my entire paycheck after taxes! I'd have to moonlight at the Kwik-E-Mart just to buy food.

Starting compensation packages for fresh graduates at all the big software companies are over $100K and some of those kids rent houses together. Mid career good people can net over $200K at larger companies without getting into management. There are also couples with both partners working in that industry.

wthrfrk80 says

BayArea says

I don't know what to say to this so I am going to walk away really slowly but I will leave you with this median home price list (not everyone living in the Bay Area lives in SF or Marin County):
County May-12
Alameda County $353,500
Contra Costa County $295,000
Marin County $627,000
San Francisco County $700,000
San Mateo County $576,500
Santa Clara County $529,000
Solano County $190,000

I didn't realize the prices were so much cheaper further out. What are the median rents in those same areas? Your example of $375k is pretty close to Alameda, what's the median rent there?

Most of the tech jobs are somewhere along 101 between San Francisco and San Jose (Santa Clara County) with San Mateo in between.

Parts of that corridor show up on ten-worst traffic reports, people don't want to live farther from work than they have to, and enough people earn salaries which support those prices.

drew_eckhardt says

Starting compensation packages for fresh graduates at all the big software companies are over $100K and some of those kids rent houses together. Mid career good people can net over $200K at larger companies without getting into management.

I guess salaries would have to be generous to support rents like that. Yikes.

I just feel sorry for the folks working at Burger King.

Gardner - you going though a faze is all. Hell I went through it too when my first wife left me. I want to own nothing and to be attaked to nothing. I burned all my clothes and sold my cars and al my rare coins. I slept in a garage apartment what was like a Karate studio. I had a bed. I had a toilet. I had a crossbow. A gong. Two pair of pants. five t-shirts. That was it. I was gonna be the guy who waltzed to a different trumpet and enjoyed only natural delites.

Then I got hungry. I got tired of being a looser. I saw the jerks around me what was slurping up the gravy that should have been on Jody Chunders plate. I heeled up and got busy making a plan. I learned to sew. I started my own headliner replacment biz. Then I taught myself bodywork. I opened up a body shop. Then I learned how to buy houses and rent them out to busted guys that nobody else wnated to rent to. IF they fell behind I asswhooped them was all, and moved on to the next slob. But I took the risk and made the money and figured on how to beat the competition by offering competitive rents. All of it desgustingly lucractive. I am now rich and would not trade the flamingo beef for the hamburger helper or my taylored seersucker for polycotton no matter how you try to style it.

That sadsack my woman run off with is now dying of diabetes. Lost his big toe last year. don't even see good enough to tell one of his sons from the other.

Stick with Jody.

StoutFiles says

I work to live, not live to work.

You are in the totally wrong work then. You got it all turned around dude. You been duped.

What a novel concept!

Maybe you should start a religion... Call it: .. buddhism!

Maybe you could call the state of being free of the world: nirvana and name the followers you convert from this thread: monks.

A sadsack piece of garbage slumlord that reaped the rewards of the biggest financial scam in world history is not someone to look up to in my book!

gardener1 says

What happens then?

As I've said for some time now, "If you want Change, keep it in your pocket."

swebb says

That's one of the problems I have with the whole "game" -- I don't really believe in it. The society we have, the lifestyles we live, the excess consumption are all part of the "foundation" that enable me to put money into stocks and make more down the road. But I don't really buy into it....it's fake, unsustainable, and repulsive in a lot of ways. I don't have faith that it's going to last. We as a country (as a world?) have too much in the unpaid debts column....Of course these things can develop over long time periods, often longer than a lifetime, so I might just be OK...

I know, right?
I think of it in terms of "bullies". Sure, I can be a bully and jump in and take risks and push others out of my way and "get mine while the gettin' is good", but where does that go in the future? It takes the biggest bullies to the top of the pile of dead bodies, and right now, the pile is starting to rot from the inside out. The resources can only support so many bullies.
The hypocrisy of humans is the claim to their special status on the planet because of their "intelligence" and "intentions", but most have some form of blind faith that a magical buddy (the Invisible Hand Job, or the Market, God, Love, Beauty, etc) will somehow make everything work out in the end. There is some truth to that, but it's because we see history through a funnel, looking back we can only see the successes because those are the ones that form our picture of how life works. We don't see all of the failures that made those successes possible, or the actual amount of energy it takes for one person to have the typical luxuries of modern civilization. We only count the absolute minimum costs and project all of the possible benefits onto our goals.
"You should.....because it would.....and can't you see how much good we've done....."
Life begins when we stop living the one imagined for us by the System of systems. Sometimes it turns out to be crap, but it's OUR crap, not homogenized strip mall crap.

Rent4Ever says

People have more money now in this country than we've ever had, yet we find stupid things to spend it on.

Ha! No Shit!
In addition to the stupid things they buy, they don't think about why there are no jobs or prosperous towns near them (rural areas, I mean). We buy all of this stuff because it is cheap and shiny and noisy. Meanwhile, if we spent a few of those bucks on local foods and products, the money would circulate in a local economy and support the infrastructure and sustain better living practices, distribute the logistics over a broader range, and be a more robust arrangement for everyone. Instead, it's all about (as George Carlin would put it) "SENDing aWAY!" to some magical land for the 3D glasses or the Phazer gun in the back of the comic books while our neighbors lose their farms, the town loses its hardware and general stores, and each year, the residents of any particular town have to drive farther and farther to a bigger and bigger (take your pick) grocery store/home 'improvement' store/hospital/auto dealer (to buy a new car to drive to the auto dealer to buy a new car).

I like the article and comments. Interesting insights. I'm in Kingman, AZ and not anywhere in California. I am (gasp) a licensed RE agent and also a licensed civil engineer (un-gasp). I bought a 4 bed, 3 bath home repo-fixer-upper 2 blocks from the golf course, 2,080 s.f. Purchase price of $65,000. 20% down, financed $52k under 4%. My mortgage is amortized for 15 years but only fixed for 10. My monthly payment is $378 which is P&I. I put down enough so there is no mortgage insurance and my property taxes are around $650 yearly.

Indeed, the place was beat when I bought it and now my cost basis is $78,000 now with new roof (lifetime asphalt shingles), new carpet, several repaired windows, new kitchen cabinets and countertop plus lots of other stuff.

So... my take on it is this. I like to buy and not rent when the deal is right. I like to do the sweat equity bit because, to a certain degree, it is like getting paid without being taxed. I work on the house now and when I sell it at a profit, the proceeds are not taxable (within limited time and $$ caps).

I also go with stuff that is nice but inexpensive. For example, I bought stock counter top from home depot. About 20 linear feet of laminate looks nice, holds up great, and cost so much less than alternatives. Same with the kitchen cabinetry. $2,000 total for cabinets with nice door / drawer handles and knobs.

I am in a win-win situation. I can continue to live here for about $475 per month (including taxes and home owners insurance) or I can sell the place for about $130,000 and walk away with $50k extra. But then I am renting again for $700 to $800 a month for inferior accomodations.

This is a real life example outside of California where ordinary people live. Oh, and I have 2 vehicles. 1991 Dodge Ram 1500 that I bought with under 50k miles for $4,000 and my 2005 Kawasaki Nomad motorcycle that I bought for $4,500 with only 1,000 miles on it. I pay $8 a month for netflix (no cable, no dish) and have an antenna for local stations. I do have the high end cell phone plan and internet plan because I need telecommunications for business purposes and I do a lot of international travel.

In conclusion, I must say that for me, it is neither better to rent nor better to buy; it is best to keep my eyes open, recognize a great deal when I see it and act accordingly.

Rent4Ever says

Is having a luxury car, watching cartoon network and having some games on your phone really worth 70k after just 10 years?

Yes.
Yes.
and Yes.

Finally finally finally. Someone who gets it. I am so happy to read that there is someone out there that thinks as I do. I have never and will never buy or own anything!!! I rent everything because all things ,stuff , even our bodies are rented. We all have a lease on life and everything decays, everything.

. Nothingness is true freedom.

You are awesome!!!