patrick.net

I'm a thinkin. Not to mention that the FED is going to be forced to quit their meddling.

You are also buying land.... Sometimes the land is 50% the value of the mortgage.

indigenous says

I'm a thinkin. Not to mention that the FED is going to be forced to quit their meddling.

No, they won't. They have their hands too deep into this mess. Not easy to get out until a President dictates Fed to not intervene in the free market.

bubblesitter says

No, they won't. They have their hands too deep into this mess. Not easy to get out until a President dictates Fed to not intervene in the free market.

They won't be forced by the president. They will be forced by the situation, which is the debt service while potentially battling inflation or....

indigenous says

They won't be forced by the president. They will be forced by the situation, which is the debt service while potentially battling inflation or....

In other words, with shit load of national debt, they have their involvement in all aspects of the free market.

bubblesitter says

In other words, with shit load of national debt, they have their involvement in all aspects of the free market.

It all boils down to the idea that the economy can be controlled by the government so they have meddled in many ways all having to do with preventing recessions and profiting the rich through inflation.

The reality is simply that EVERY country in history that went to a fiat currency collapsed under inflation. It is not a matter of if, from what I read TSHTF in 2030.

Hausmeister T says

The problem is that the alternative to buying (which is renting) is an even worse investment. 60-70 years of renting will cost you more even if your house's value declines down to zero. At least you still have a place to live.

It's really too complicated to make a blanket statement like that. I have lived at 11 different addresses in 20 years. If I had bought every place I lived, it would have been a financial disaster...Now that I am somewhat settled down, owning makes more sense.

Renting comes with a lot of benefits, owning with a lot of responsibilities.

I only know the story of my grandmother who was an original feminist I suppose.

When I was growing up, she lived in a fantastic old stone carriage house, it was awesome. She ran an antique business out of it. She also rented the place I found out later.

She always had money, my grandmother lent my father the cash for the ocean view lot on an island in Massachusetts you may have heard of.

Eventually she passed away after living in another great place in a very quaint town. She left each of her grandchildren a nice chunk of change and this funded my first mutual fund in 1982.

If I told you what that mutual fund was worth today you would not believe me so I won't.

Moral: you can rent and have a pretty good life and have money left over for other things if you 1. make money in the first place 2. watch it 3.rent.

Many people require a mortgage because they cannot save their money any other way. Without a reverse mortgage, they'd be broke in their retirement.

Hausmeister T says

The problem is that the alternative to buying (which is renting) is an even worse investment. 60-70 years of renting will cost you more even if your house's value declines down to zero.

Well, according to his analysis...no!

Say that home prices drop precipitously...say 50% from today to the lifetime of a 15 year mortgage.

You buy at home at $400,000 with a mortgage, and your friend pays rent at the same rate as your monthly payment.

Then the price drops over time to $200,000. But (unless you declare foreclosure) you are still paying a mortgage based on $400,000. Whereas the person who rents will experience declines in rent prices.

At the end of the 15 years, you will have lost $200,000. However, your friend, who has seen his payments decrease, could have saved enough money to buy your (now) $200,000 home for cash...and maybe have some left over.

Folks, here's an idea, buy a home in the countryside for retirement but then, rent in the cities for work. Thus, you'll have a place to settle down in the end but during your prime work years, you won't be tied to a location and thus, have more career flexibility.

So hypothetically, you can contract/consult 3 years in DC, 2 years in Atlanta, 4 years in Houston, etc but then, have that home in rural Pennsylvania all paid off in full so that when it's time to unwind, you don't have either rent or a mortgage.