Why you care?

I’m turning 26 next week and am currently under contract on a property. I plan on living in the property until my children are all adults (the youngest is 9 months old, so it’ll be a while).
I highly doubt that I’m a typical soon-to-be-26 year old though. I have over $130k in the bank (at least until closing), my 401k is maxed, and I’ve already made over $190k this year. I have three kids and am pretty far along in my career.
Most people my age are either in graduate school, working an entry level job, or wasting their life at some service industry sweatshop. They have no business even thinking about real estate.
At this point I just don’t care that the house price will go down. We’re going to be a 5 minute walk away from my children’s school, a 20 minute drive from work, and have a quarter of an acre of land and a 3200 square foot monster of a house to live in. Sure, I might make more money putting my down payment elsewhere, but I don’t need the money in any case, and shelling out around 20% of my gross for housing costs seems reasonable to me.

Kevin, can I ask how you got yourself into such a great position at 26 years of age? Was your school paid for by others? What type of work do you do? How were you able to save with the expense of having kids? What does you wife do?

You are very unique and it would be inspiring to hear how you pulled it off.

Sure it’s an optimistic data point depending on your stance but let’s see what teh next year brings.

Happy Thanksgiving.

Using your 401K to purchase a house is pretty wise. Putting all your investment eggs into a 401K isn’t exactly wise. Look at those people who thought they had enough saved and all of a sudden lost 50% of their savings or more due to stock/bond/dollar issues. 401K = retirement investment money. A house is one of the best investments you can make. It can never lose 100% of it’s value. At the very least, the property offers shelter. A bond that went bust is at best a piece of paper you could burn for some heat?

Housing is like anything else we purchase above and beyond rice and beans. It’s a value we tag to it and it’s a luxury. We need some shelter + food. Yes housing might be high, but it’s because the majority believe in the value and will hold it there. Just like diamonds. The value will be held there until the majority of people decide not to purchase them anymore. So far, diamonds have been doing pretty well for the last 50 years. 50 year holding price seems pretty good to me. Sure they might be held up there, but they are.

Here’s a 2007 video with Peter Schiff versus some Pollyanna idiots including Ben Stein:

http://www.youtube.com/watch?v=RYX1AgEV0vo

Ben believed subprime was a tiny unimportant blip, and the dollar was in no danger.
This group recommended buying things like Merrill Lynch back at $70+ and
Bear Stearns and Goldman Sachs back at $175.

Ben is even worse as a pundit than as an actor.