patrick.net

clambo says

Pick the bank with the better rate of course.

You could also save up the dough and pay the roofer out of your pocket.

Same with the painter.

I would prefer to do that too.. In the first 3 years of owning our home we did $7K of interior work before move in... Then about $3K of pool equipment work the next year... Then $6K of landscaping work and last year $6K to install a brand new HVAC system. So we've put in over $20K out of pocket in 3 years... My wife has one more year of schooling left and we've got nanny expenses now too.. So I didn't want to stretch us too thin this year by paying cash for the roof.

But I also hate stressing the FEW times a year it rains in So Cal.... over whether I'm gonna come home to a leak. Tough call.. I have the summer to think about it atleast.. Never rains in So Cal in the summer.. atleast not downpours.

One week listed and now Pending on Carey (per Redfin).

Can't sarah and hillary have a death match in the roman colesium with all historic weaponry? I bet the stadium will be sold out and the international solidarity will be enhanced.

That woman has you demtards wrapped all the way tight around her little finger

errc says

That woman has you demtards wrapped all the way tight around her little finger

Agreed.

Not saying that I want Palin as President, but Gawd I love how the beta-males and girls in the Democrat party clutch their pearls and get the vapors everytime Palin open's her mouth on FB.

She is living rent-free in their heads. And for that - I am forever grateful!

Not only is your english language background somewhat limited, which you seem to intentionally exaggerate with the first sentence (nice troll - you couldn't be that stupid), but you also don't know much about finance.

Newsflash ! If you had a 10 million dollar windfall, and played your cards really smart, you could find someone, even now, that would help you earn 10% (or more on it). Yes, with some risk. Or, if you diversified you definitely could earn a SUPER SAFE return of over 5%.

CaptainShuddup says

If I had my druthers, I would rather have a couple Million in a bank somewhere making me 4% than to have a one time 10 million dollar windfall.

You really shouldn't brag about how clueless you are.

Hell, with 10 million you could construct a 30 million dollar apartment complex within 30 miles of where you now live (with a 67% mortgage or maybe make it a 25 million dollar complex with a 60% mortgage), that would earn you way more than 80K per year, plus your daughters would really be cleaning up after the mortgage is paid!!!!!!! At that point, they would both have incomes well into 6 figures (that is equivalent way over 200K each today) for life.

Or maybe after the mortgage is paid, they sell it, and figure out what to do with the after tax proceeds. Maybe interest rates are high then (40 years from now) and they just put it in an annuity, paying them each millions a year for life, a majority of which they would invest for future generations.

http://en.wikipedia.org/wiki/Exponential_growth

Two things:
1) Muslims go jihad against the USA (and not, for instance, Canada, which contains the same sort of people and religious faith predominance) because for three decades the neocons have sold the public into three wars and many many covert actions against Muslims. We've been taught to hate them ("but not really, we are equal opportunity") and coaxed into supporting drone strikes and leveling of entire Muslim nations. Our government continues to wage a "war on terror" that every jihadist knows actually means "war on fundamentalist Islam." So ya, we are their public enemy #1. If that is ever going to change, we need to be smarter about the leaders we elect and most importantly, smarter about what we allow them to do.

2) Jihadists definitely need to be baptized with lighter fluid and set alight.
"You can build a man a fire and he'll stay warm for a night, but set him on fire and he'll stay warm for the rest of his life."

The Professor says

THE RENT IS TOO DAMN HIGH!

My partner and I bought a townhouse in San Jose last summer for $315k. Put 20% down and financed 80% at 4%. Put $35k in rehab and just rented it out for $2,800/month. If rents were so high, why did we have multiple applicants? Apparently some people could afford it.

Call it Crazy says

clambo says

There may be a lot of happy renters out there, and unhappy women wanting that house with the picket fence.

I was an owner for decades, cashed out equity and sat on the sidelines for two years... It was wonderful, nothing to fix or replace, I was happy but she wasn't happy...

Now, she's happy (with the picket fence) and I'm back fixing and replacing , spending money as an owner again....

You just can't win....

Ha ha.
The queen always gets her castle.

Strategist says

Call it Crazy says

clambo says

There may be a lot of happy renters out there, and unhappy women wanting that house with the picket fence.

I was an owner for decades, cashed out equity and sat on the sidelines for two years... It was wonderful, nothing to fix or replace, I was happy but she wasn't happy...

Now, she's happy (with the picket fence) and I'm back fixing and replacing , spending money as an owner again....

You just can't win....

Ha ha.

The queen always gets her castle.

PS.. You have a smart queen there. You will be glad she made you buy a house. Can you take her to Cheese Cake Factory this weekend? She deserves it.

If you own a home and have 80K dividends/interest, it is more or less equivalent to a California couple earning 130-140K per year but with a standard mortgage with standard taxes.

You aren't paying social security taxes or medicare on you dividends, and if you plan carefully, you can keep your taxes lower than a working couple or person with earned income and a mortgage.

marcus says

If you had a 10 million dollar windfall, and played your cards really smart, you could find someone, even now, that would help you earn 10% (or more on it). Yes, with some risk. Or, if you diversified you definitely could earn a SUPER SAFE return of over 5%.

Who's giving you 10% when the fed interest rate is super low?
And then just how much of that Million will you end up with?
That person you mention doesn't work cheap, nor does his lawyers, neither does Uncle Sam.

Ceffer says

You aren't paying social security taxes or medicare on you dividends, and if you plan carefully, you can keep your taxes lower than a working couple or person with earned income and a mortgage.

And it's guaranteed, it's yours and is dependable as it raining on a rainy day. Plus you don't end up being Madoff'd, Bernstiened, Bernakatized, Greenspun, and taken to the cleaners every time the too big to fail teeter on the edge.

marcus says

Not only is your english language background somewhat limited, which you seem to intentionally exaggerate with the first sentence (nice troll - you couldn't be that stupid)

No, not intentionally meant for you, I said the Smart people.

E-man says

If rents were so high, why did we have multiple applicants?

low supply, high demand

rents will go to the absolute point of pain, and beyond; housing rents are one of the several areas of the economy where the price is unattached to the cost of provision of the good or service.

Health care, legal work, energy extraction are of course the other successful main areas of rent-seeking in our economy.

Though the supply of lawyers is pretty oversized compared to the demand apparently..

The "Free Market" can't make new land, nor can it make new, more efficient, transportation services to increase the supply of accessible land to a given metro center.

The "Free Market" can build more supply of higher density, to the extent that NIMBYism allows.

Housing is such a serious problem in this country; maybe slowly people are beginning to understand that massive social inequity involved here.

Most revolutions of the past 100-odd years were land revolutions.

Not that I want a revolution, but something's gotta change here.

Yep. It's pure supply and demand. PK was the one that came up with the price. As usual, I cringed at the asking rent, but we got it on the 1st open house.

We got a good deal. If we put it on the market now, PK believes we can sell it for $575k.

I'm by no means a capitalist. I'm just an average Joe trying to get ahead in life. I decided real estate was the path to get me out of the rat race, and sure it did. My share is $5.5M worth of real estate. At 5% annual inflation, my net worth should increase $275k/year without lifting a finger. Once factored in the cash-flow and principal paydown, it's even more.

Republicans or Democrats don't put money in my pockets. Real estate and my tenants are the ones putting money in my pockets. My tenants are my partners without shared equity.

Of course, I'm not done yet. Have been in acquisition mode on apartment buildings. As long as each building can stand on its own, I'm a buyer. Someone is playing monopoly in real life.

We all want to get out of the rat race. God just happened to shine on me, and I chose the right path. I didn't invent the game. I'm simply a player. Don't hate the players. Hate the game.

Cheers to no more working and building an empire for the "man". Be the man. NO MORE W-2.

You can always buy an income stream with an annuity, even Vanguard has them.

You can buy so-called "payout funds" from them also.

You can buy dividend paying stock mutual funds.

You can buy bond funds, there are many.

You can also buy a regular stock mutual fund, e.g. balanced fund, and have dividends/interest paid to you and the capital gains reinvested in fund shares.

Interest rates are held down by the Federal Reserve. But even CDs were a lousy deal if you did the math on inflation, interest rates, and taxes.

The trick is you can't lend your money to a bank today. They don't pay you good interest.

CaptainShuddup says

Who's giving you 10% when the fed interest rate is super low?

No one is going to give you 10%. You'll have to work at it.

CaptainShuddup says

Who's giving you 10% when the fed interest rate is super low?

There are many tens of thousands of money managers that have earned well over 10% per year for their clients, that is since 2006. Most of this time the fed funds rate has been near zero, and this time interval includes a dramatic drop in the stock market.

One requisite is that the account be large enough to be worth their wild. 2 million meets this requirement. 10 million even more so.

Isn't 10% what Madoff promised his clients?

CaptainShuddup says

marcus says

Not only is your english language background somewhat limited, which you seem to intentionally exaggerate with the first sentence (nice troll - you couldn't be that stupid)

No, not intentionally meant for you, I said the Smart people.

For the literate people out there,...you know, people who read, starting off with a non sentence (ie putting a period in the middle of a sentence) makes you seem like exactly as much of a dolt as you are.

CaptainShuddup says

I think the majority of people today even the smart ones.

Don't realize that there's being rich, then there's being rich for the long term.

2 non sentences in a row, as the lead in to your little essay.

I'm actually very forgiving of certain sloppiness in this medium. But what you do is just an obvious troll of those that are more literate and more intelligent than you.

I get it. Everyone with an IQ over 90 is what you refer to in a derogatory way as "a liberal." And you get a kick out of pushing their buttons. You think it's ever so amusing to make those liberals think that you're even more stupid than you are.

Somehow since it's intentional, it allows you to feel that you aren't an idiot ? Is that it ?

Okay,...fine. I'm a liberal by your definition (ie not an idiot) . So ? Why is that so amusing ? These liberal smarty pants types are going to point out your bad grammar or syntax, and you're going to think "hehee, I did it on purpose to troll them. I'm so clever. And if they finally figured out I do it on purpose, that sort of covers the other times past and future when it's not on purpose........etc, etc."

CaptainShuddup says

Isn't 10% what Madoff promised his clients?

Successful money managers don't guarantee returns. And I don't think Madoff did either. He just showed a fraudulent history of making over 10%. And that was on a fund that was too huge to do that well, and supposedly doing arbitrage type strategies that were impossible.

Bessides what Madoff promised was more.

Markopolos later testified to Congress that to deliver 12% annual returns to the investor, Madoff needed to earn 16% gross, so as to distribute a 4% fee to the feeder fund managers, who would secure new victims, be "willfully blind, and not get too intrusive".[69]

http://en.wikipedia.org/wiki/Madoff_investment_scandal

CaptainShuddup says

If I had my druthers, I would rather have a couple Million in a bank somewhere making me 4% than to have a one time 10 million dollar windfall.

That would be 80K a year guaranteed no matter what. And the year after that, and the next...

I sure hope you would talk to a financial consultant (or a middle school math teacher) before making that decision.

2 million at 4% vs 10 million at 0%...are you fucking serious?

If you didn't touch the 2 million or any interest it generated, it would take over 40 years to grow to equal $10 million.

How much longer do you have to live? 50 years? let's just take the 10 million at 0% interest and divide that by 50....You could spend $200k per year for 50 years before you ran out of money.

He wanted to be the first one on his block to take a position contrary to Thomas Piketty's thesis in the popular new book, "Capital in the 21st Century."

Maybe he heard a segment from some angry mouth breathers on talk radio (or FOx) who are upset that Piketty is right, and wanting to attribute it all to communists that will use it as an excuse to steal more money from the rich to give to the "takers."

Unfortunately for the Captain, who chooses what to believe strictly on the basis of what he wants to believe, just wishing that Piketty is wrong and making up some nonsensical gibberish is only going to convince one single person ( himself) that he has a point to make on this subject.

I can never decide if the captain is the king of trolls or has simply smoked way too much dope. Anyone have any insight?

CaptainShuddup says

I guess what I'm saying being rich today, doesn't seem to have the same meaning it did in the past, nor is it a guarantee that you wont ever be broke again. If I had my druthers, I would rather have a couple Million in a bank somewhere making me 4% than to have a one time 10 million dollar windfall.

That would be 80K a year guaranteed no matter what. And the year after that, and the next...

Ummm...

The 2041 TIPS pay 2.125% interest right now. If prices double, the rate effectively doubles. Right now the ratio is 1.072, essentially saying the $1000 you invested in 2011 is worth 1,072, plus the biannual interest payments.

This is a locked in guaranteed real return of 2.125% for the next 27 years.

Real Principle Risk free $10 million at 2.125%, (state tax exempt) > $2 Million at 4% nominal.

2.125% real return. If inflation is 2%, then the nominal return is 4.125%.

I'll take the $10 million windfall, thanks.

CaptainShuddup says

And Marcus is having a Luke Sky-walker moment here, he's in shock that someone can be rich, and not be Rich at least not for long.

$10 million can be invested risk free in TIPS and will always return and real income 4x the real median income. By math, that means once you amass ~$2.5M in wealth, you are guaranteed to make at least the median income for life if you invest conservatively.

$2.5M is under the estate tax exemption, so if you only have one child, and they only have one child, etc. a net worth of $2.5M today will earn at least the median income (barring tax law changes) for your decedents ad finitum.

If you spend less than the median income, then wealth will only grow in real terms.

BoomAndBustCycle says

But I also hate stressing the FEW times a year it rains in So Cal.... over whether I'm gonna come home to a leak. Tough call.. I have the summer to think about it atleast.. Never rains in So Cal in the summer.. atleast not downpours.

It is forecast that we'll have a moderate to strong El Nino this coming winter, which often brings heavier rain. Something to consider when making roof decisions.

control point says

2.125% real return. If inflation is 2%, then the nominal return is 4.125%.

What inflation, there is no inflation. Only price fixing.
We're not getting more money, we're paying more money.

control point says

$10 million can be invested risk free in TIPS and will always return and real income 4x the real median income.

Security Term CUSIP Reopening Issue
Date Maturity Date High Yield Interest Rate
5-Year 912828C99 No 04/30/2014 04/15/2019 -0.213% 0.125%
10-Year 912828B25 Yes 03/31/2014 01/15/2024 0.659% 0.625%
30-Year 912810RF7 No 02/28/2014 02/15/2044 1.495% 1.375%control point says

The 2041 TIPS pay 2.125% interest right now.

Not according to https://www.treasurydirect.gov/instit/annceresult/annceresult.htm

I'm breaking my own rules again by responding here, but the answer to this concern is easy. Simply put, and as I've mentioned a zillion times like a broken record, the overall stock market has delivered an average, long-term return of between 7-10% a year for well over 100+ years. People think I'm stupid for saying so, but look it up. That's a better return than real estate, and its a more consistent return than just about any other investment one could make. Are there risks? Yes. Can you lose money at times? Yes. That is why its wise to hire a financial planner and have them do the work for you.
Even if only 50% of 10 million were to be placed in boring stock investments, that would likely still provide a lifetime of comfortable living with the remainder of the cash simply sitting around somewhere.

control point says

$10 million can be invested risk free in TIPS and will always return and real income 4x the real median income. By math, that means once you amass ~$2.5M in wealth, you are guaranteed to make at least the median income for life if you invest conservatively.

That's not even remotely true.

edvard2 says

Simply put, and as I've mentioned a zillion times like a broken record, the overall stock market has delivered an average, long-term return of between 7-10% a year for well over 100+ years

If you average it out you'll get closer to 4%. You have to be pretty lucky to get 7 to 10 over years.

mell says

Note that this ill always benefit the wealthiest (most leveraged) the most.

Not really--as we've discussed before. A rich person losing 50% of his wealth is much, much less harmful than a working stiff losing his job.

BoomAndBustCycle says

I've heard all the horror stories about HELOC's.. but plan to do this responsibly.. and put it all back into the house for practical repairs and updates. I see I can choose between a Home Equity Line of Credit or a Home equity loan...

Welcome to homeownership. Homes only increase in x "value" if you put x dollars of maintenance into them. (Unless you sell in a bubble.)

SFace says

HELOC is probably better than a loan, less fees.

Get a floating rate. I think rates are around prime + 1%. (around 4.25%), tax deductable. The larger than line, the better the rates. I do not believe 3.25% is out there unless you are prime, in Palo Alto and taking out 500K.

I am planning on buying a house (rental property) with cash but then want to get some sort of loan where the house will still be cash flow positive, but I'll use the money for something else, maybe another purchase. Any thoughts on the best way of doing this? Thanks.

CaptainShuddup says

Not according to https://www.treasurydirect.gov/instit/annceresult/annceresult.htm

http://www.treasurydirect.gov/instit/annceresult/tipscpi/2014/tipscpi_912810qp6_052014.htm

FortWayne says

That's not even remotely true

You don't understand tips then.

tatupu70 says

mell says

Note that this ill always benefit the wealthiest (most leveraged) the most.

Not really--as we've discussed before. A rich person losing 50% of his wealth is much, much less harmful than a working stiff losing his job.

We discussed this before indeed. The working stiff losing his old job would find a new job that can pay more because the new employer has a chance to buy the previous employer's assets at fire-sale prices. Both Google and Amazon in their early years were well known for picking up equipment and office furniture from failed dot-com's. Less money spent on hardware, rent and servicing debt, the more money to pay employees and devote to customers.

Your paymaster the banksters don't like that, but prefer the old debt stay, and have the cost transferred to other people, leading to market place clog-up and long term unemployment for the working stiff.

Reality says

Both Google and Amazon in their early years were well known for picking up equipment and office furniture from failed dot-com's. Less money spent on hardware, rent and servicing debt, the more money to pay employees and devote to customers.

LOL that profit margins and economic value captured by workers is determined by anything more than the market. A new employer also gets to buy employees at fire sale prices.

tatupu70 says

Not really--as we've discussed before. A rich person losing 50% of his wealth is much, much less harmful than a working stiff losing his job.

Not really...

Assuming a)So called rich person, loses 50% of his wealth, which could be 100% of his growth, if he started with that 50% originally. Not only that, that other 50% may have been what he depends on to maintain his bills. His income has just been cut in half. Anyone with a Mortgage and Bills knows they don't want half. The guy who lost half his income probably hasn't been working and is considered Dopped out of the workforce, and will have a hell of time getting a job to build back up nest egg. And his bills will be draining the remainder of his nest egg, faster every month as he pays bills. The interest he earns will be less.

b)The guy who lost a good job, if he was at least smart enough to save a years worth of salary, has a year buffer. And he is fresh in the job market. He'll probably bounce back quickly and not have to use more than a month or two of his savings.

Just because people have a million if they are trying to live off it, they are on a set fixed income. There is no room for error. I realize up to a point you have enough money to live indefinitely regardless how you manage your resources. But I'm not talking about extremely wealthy people or people who have wealth because they were finance and investing savvy. Many people come into money, save up enough money(not likely anymore), win a lotto pool, or some other windfall means. They don't automatically become magnates and moguls. And for this argument, I'm talking about people with only 1mil to 2mil, that is just enough to manage a meager income through.

Those people who don't consider their money how ever they have it tied up earning them income, don't consider any of it "Mad Money" or in any way disposable.

It's why when you ask a relative or Friend who you think is rich, for a decent chunk of change, you ever notice they say...

"I don't have THAT kind of Money."

They have some Money, but it's not That kind of money.