patrick.net

New Renter says

Replace the sacrificial anodes on their schedule and the heater might outlive you.

Oh and be careful not to directly connect copper to galvanized plumbing, and make sure there is appropriately piped drain should it ever fail.

Uhhhh... Will you come down south and inspect our next house before we buy?

You are making up numbers, and you come up with the numbers through koolaid intoxication. When prices are high and easy (free) money is to be made, everyone thinks this way. It is very reminiscent of 2005.

You didn't read my post about the cost breakdown for the people you sold to, or completely ignored it in favor of your own numbers, which are not possible. they are too low, but I"m not going to waste my time rebutting them again, since I already did. For someone who has owned twice (at least), it is surprising that you don't understand the cost of ownership. But with the appreciation that dropped in your lap, I guess I can see why.

Waitingtobuy says

You do realize, unless you live with mommy and daddy, that you have to pay rent in this life.

And here it is. Exactly why I don't respect or identify with older Gen Xers. The condescending attitude, of "I got mine, you have no idea how to live life because everything has been handed to you." Couldn't be farther from the truth, but believe what you want.

lahossain says

My jaw kept dropping lower with every response to this post, chiming in as if they all had a clarion vision of the logic in the winning economics you had when you bought.

Yes, there is a clarion vision: buy when low and sell when high. Oh, and it really helps when you have the largest bubbles in the history of the American housing market (OPs first house) AND when that bubble pops, the government enacts policy that prevents a reversion to mean and artificially inflates values (OPs second house). I'm sure we could glean a lot of valuable information from these posts as to when the next six year period of mania will set it to make sure we are all on board. Because, really, when gambling on markets, there are no losers...

JH says

Our friends who bought in 2000 were able to put 20% down (approx $70k). Well, since our wages were not much better in 2008, we also managed to put $70k down, or 10%. That made our monthly payment $5k, which was about $1k more than renters were paying at the time in this LA beach community, and it would have only been $4k if we had 20% down.

I read your sarcastic post. Your numbers are way off. $5K on a $550,000 loan? Which interest rate are you using? 10%? The mortgage is just under $2800/month.

JH says

You are making up numbers, and you come up with the numbers through koolaid intoxication. When prices are high and easy (free) money is to be made, everyone thinks this way. It is very reminiscent of 2005.

Your post made up numbers. I used this thing called Excel and a mortgage calculator. I gave you real world numbers. You gave me prose and mockery. Your numbers are way off. I even proved to you that even in your house doesnt appreciate, depending on rents, you could still be better off owning. Low interest rates work this way.

Are you going to also tell me this image of the home is fake too?

JH says

Confuckinggrats for being old enough to buy then.

JH says

And here it is. Exactly why I don't respect or identify with older Gen Xers. The condescending attitude, of "I got mine, you have no idea how to live life because everything has been handed to you." Couldn't be farther from the truth, but believe what you want.

When all else fails, make sure you play the age card. You are the one who twice mentioned age. I made zero comments telling you how to live life. I said unless you (read anyone) lives with their parents or family, you have to pay rent or buy.

Again, the point of the OP, and every other one, is that sometimes it is better to buy than rent. Other times it is not. Timing and luck are a part of it, as are running the numbers. That's it, dude. For some reason, you went in with guns blazing, like I was attacking you personally. It isnt an attack on you or anyone else.

One last thing...Im one of the last guys you can accuse of "I got mine". I spend a ton of time serving my community.

Waitingtobuy says

$5K on a $550,000 loan?

Do you know they put down $140k? Twice as much as you did 6 years before that? If they did, that was painful, but they are paying $4k monthly. If they put down as much as you, they are paying $5k monthly. Now my monthly includes everything. I know, I can find the calculators that only include P&I. But those ignore some of the real costs of ownership, like insurance and taxes. Some of those may be neutralized depending on your tax situation, but that is case by case.

Waitingtobuy says

I even proved to you that even in your house doesnt appreciate, depending on rents, you could still be better off owning.

And I "proved" to you that even if your house DOES appreciate, you could lose your shirt.

Waitingtobuy says

Low interest rates work this way.

Yup, low interest rates work to inflate home prices. Think 2007 and 2014, for example.

Waitingtobuy says

When all else fails, make sure you play the age card.

Is it a wash if we both play the same card?

JH says

Just think...if we had taken that $70k downpayment, and the extra $1k per month and pumped it all into AAPL stock over the past 6 years, the dp would be worth $550k and the extra $1k would be $200k. Now THAT is profit. I'm going to tell all my friends about my luck, jump into AAPL now, and expect to become filthy rich in 6 years. Well, once I get my hands on $70k again, that is.

You forgot capital gains taxes at 15%-20%. And where did you live that entire time for free? Didn't you pay $230K in rent? That $480K in profit is now more like $150K.

(And yes, I know this is sarcasm).

JH says

Do you know they put down $140k? Twice as much as you did 6 years before that? If they did, that was painful, but they are paying $4k monthly. If they put down as much as you, they are paying $5k monthly. Now my monthly includes everything. I know, I can find the calculators that only include P&I. But those ignore some of the real costs of ownership, like insurance and taxes. Some of those may be neutralized depending on your tax situation, but that is case by case.

No, you are still off. Check out the screen shot included. Downpayment of $70K. 1.25% property taxes and $1200/yr in insurance, which is high. I will even give you PMI. Still not $5K/month.

Waitingtobuy says

JH says

Just think...if we had taken that $70k downpayment, and the extra $1k per month and pumped it all into AAPL stock over the past 6 years, the dp would be worth $550k and the extra $1k would be $200k. Now THAT is profit. I'm going to tell all my friends about my luck, jump into AAPL now, and expect to become filthy rich in 6 years. Well, once I get my hands on $70k again, that is.

You forgot capital gains taxes at 15%-20%. And where did you live that entire time for free? Didn't you pay $230K in rent? That $480K in profit is now more like $150K.

(And yes, I know this is sarcasm).

Well, I was talking about the difference between paying $5k/mo and $4k/mo. Most of the value is from the 70k downpayment, anyway.

I forgot PMI, which adds in another $300. However, if you only put down $70K, most of the extra interest is deducted, so it is close to a wash.

Got the $4K vs $5K difference.

Im very worried about the next generations. My kids' generation is really going to have it rough. Doubt they will be able to live where we do, unless we leave them the house when we die. It's crazy how expensive everything, including buying and renting, has become. My folks bought their first place in the Midwest for $11K in 1963. They made $500 of profit in 5 years, and thought they were in heaven.

Waitingtobuy says

I forgot PMI, which adds in another $300. However, if you only put down $70K, most of the extra interest is deducted, so it is close to a wash.

Mine is giving me $420, but whatever. There is an awful lot being deducted here, repeatedly. I think it highlights the difficulty in extracting large sums of money with which to 'move up'. You were fortunate to sell and rent during the crash. This is how I would like to time housing...or any market. But I don't know that it's worth the hassle. The gains you made 2011-present would not have happened if you stayed in your $620k house from 2008-2011.

Btw, the other key factor is the interest rate. It was over 6% in 2008. With 20% down, your buyer might have scored a 6.2% loan late in the year, but probably not with 10% down.

Waitingtobuy says

Make another prediction for me. What will $4K/month in rent look like in 27 years when my mortgage is paid off?

After the global panic of 20XX, way before your 27 years of payments are done you will be handed your eviction notice :-)

Waitingtobuy says

$20,000 in renovations (hot water heater, dishwasher, stove, painting, and flooring), which brings it up about $500 if I sold now, which I wont. That stuff lasts at least 8 years, so figure $100/month.

Only 8 years? Should it be at least 10 years? Hardwood floor can last over 100 years, engineered woods over 30 years, etc. A Bosch dishwasher should last at least 10 years.

Waitingtobuy says

I've been accused of a lot of things. Being bad with math is not one. I'm what you call a supersaver for retirement, plan to retire at 55, and have nearly both kids college expenses paid for in their 529 plans, and the first won't graduate high school for 7 yrs. All with a salary between me and my wife of $120K/yr. The only debt I have is my mortgage, and I will likely downsize to live overseas in my wife's home country.

Sucks that you are good at math because so am I. You say you make 120k/year between you and your wife and you are a SUPERSAVER for retirement. Lets do some math.

$17500 saved for both you and your wife in 401k accounts = $35000/year

$14000 per child for both you and your wife into 529 plan = $56000/year

$3077/month mortgage = $37000/year

GRAND TOTAL BEFORE LIVING EXPENSES AND TAXES $128000

So unless your salary is 120k for BOTH you and your wife, not between you and your wife I would say you are full of shit!

yup1 says

Sucks that you are good at math because so am I. You say you make 120k/year between you and your wife and you are a SUPERSAVER for retirement. Lets do some math.

$17500 saved for both you and your wife in 401k accounts = $35000/year

$14000 per child for both you and your wife into 529 plan = $56000/year

$3077/month mortgage = $37000/year

GRAND TOTAL BEFORE LIVING EXPENSES AND TAXES $128000

So unless your salary is 120k for BOTH you and your wife, not between you and your wife I would say you are full of shit!

You're pretty accurate with the 401k, although I have a PSP and I401K, not 401K. I own a business and can deduct a lot to minimize my YE taxes.

As for college, no one saves more for college than retirement. $56K is more like $12K-$15K/year these days. I've been saving since 2001. You can always borrow for college, but not for retirement. Below is proof. Notice the name of the 529 plan is included in the image.

hanera says

Only 8 years? Should it be at least 10 years? Hardwood floor can last over 100 years, engineered woods over 30 years, etc. A Bosch dishwasher should last at least 10 years.

Yes, you are right. I only put 8 years to be conservative. Carpeting is an 8-10 year deal. Hot water heater the same. Appliances the same. We have engineered hardwoods. Figure to paint every 8-10 years.

turtledove says

New Renter says

Replace the sacrificial anodes on their schedule and the heater might outlive you.

Oh and be careful not to directly connect copper to galvanized plumbing, and make sure there is appropriately piped drain should it ever fail.

Uhhhh... Will you come down south and inspect our next house before we buy?

Sure if you make some brownies for the post-inspection celebration ;)

Waitingtobuy says

Carpeting is an 8-10 year deal. Hot water heater the same. Appliances the same. We have engineered hardwoods. Figure to paint every 8-10 years.

Carpeting varies wildly depending on quality and how its cared for. My BIL's parents still have their 30+ year OEM nylon plush carpet from when the house was built, it seriously looks brand new!

Go with a quality nylon or better yet Triexta carpet and you could be looking at a 50+ year floor. 20+ with kids and pets. Triexta feels softer than wool, wears as well or better than nylon and shrugs off any water based spill including BLEACH.

And no I don't sell carpet.

JH says

You were fortunate to sell and rent during the crash. This is how I would like to time housing...or any market. But I don't know that it's worth the hassle. The gains you made 2011-present would not have happened if you stayed in your $620k house from 2008-2011.

True. Timing is everything here. One thing I didnt mention is where I got my downpayment on my first house. Cashed stock options. Again, I have been fortunate and I realize not everyone has that opportunity. Some people save, others get money from their family for a downpayment.

I thought renting was the bomb. After dealing with my crummy landlord, including raw sewage backing up and leaking into my office, and other "non professional" actions, I changed my mind.

It's true I wouldnt have made the same gains if I held on to my other place, but I would also probably have about $200K left to pay on my mortgage, rather than $600K. When I sold my place, my mortgage was $1441/month and property taxes were $4200. I've doubled both my mortgage and prop taxes to live in a nicer area.

To me, it wasn't about the gains, although that's great. When I bought, I was worried that my house value would go down. With rents as high as they are here, apples to apples, it's still a better deal owning than renting. Dont focus on the gains. Focus on renting vs a mortgage with no appreciation.

Waitingtobuy says

hanera says

Only 8 years? Should it be at least 10 years? Hardwood floor can last over 100 years, engineered woods over 30 years, etc. A Bosch dishwasher should last at least 10 years.

Yes, you are right. I only put 8 years to be conservative. Carpeting is an 8-10 year deal. Hot water heater the same. Appliances the same. We have engineered hardwoods. Figure to paint every 8-10 years.

This is a common flaw in calculators, whether using Excel or otherwise. All we include is the few maintenance items we think of off the top of the head. Or the repairs we did when we owned. Reality is that there is more maintenance then an itemized list. And we don't know what or when we will need to do the repairs for minor items although majors are more predictable. The fact that most calculators show 1% of the purchase price (and this is low end estimate) should not be overlooked. When we bought years ago in a different state, we believed the koolaid intoxication that rents would keep going up and eventually make buying a good idea. And looking through koolaid colored glasses, we didn't budget 1-2% for the maintenance that we should have (on a 20 year old home!).

When a home increases in value 20% a year, none of this matters.
When a home increases in value 2% a year, all the little bits matter: the couple hundred here and there (per month) make all the difference in the world between building equity or losing money.

I have heard all this conversation before, and I will continue to warn people of the true costs of ownership because a lot of people don't consider them. History is a bitch.

JH says

This is a common flaw in calculators, whether using Excel or otherwise. All we include is the few maintenance items we think of off the top of the head. Or the repairs we did when we owned. Reality is that there is more maintenance then an itemized list. And we don't know what or when we will need to do the repairs for minor items although majors are more predictable. The fact that most calculators show 1% of the purchase price (and this is low end estimate) should not be overlooked. When we bought years ago in a different state, we believed the koolaid intoxication that rents would keep going up and eventually make buying a good idea. And looking through koolaid colored glasses, we didn't budget 1-2% for the maintenance that we should have (on a 20 year old home!).

True, but it depends like you said on the age of the home. Things like bad foundations can add up. It's not likely that my 13 yr old townhouse has this. Nor is it likely I will need to replace the electrical wiring or plumbing. Also, we live without AC, and use the heater sparingly so not likely it will need replacing. I think 1%-2% for maintenance/remodeling is high, but it depends on the price of the home. 1% of a $1M home is $10K/year. For a $400K place, it is $4K. Painting my place ran me $4K. That's every 8-10 years.

My neighbors down the street remodeled their kitchen and did their floors and painting after 18 years. Probably spent $70K for really nice finishes. That still works out to less than $4K/year over that amount of time.

Waitingtobuy says

I think 1%-2% for maintenance/remodeling is high, but it depends on the price of the home.

And the location. In coastal CA, the price of the home could be 50% to 75% land value. There's not much maintenance required there. In other places, the land value is less.

So, the maintenance on a $1m house in "Fortress" Silicon Valley (1200 sq ft) would be much less than on a $1m house in the Midwest (6000 sq ft). Really need to calculate it out vs assuming 1%.

Waitingtobuy says

Dont focus on the gains.

The OP is that a house is a good investment. Therefore, you talked a lot about gains. And I countered with: 1) investment quality gains are not guaranteed (and your own house proved that) and 2) cost of ownership is a bitch.

Waitingtobuy says

Focus on renting vs a mortgage with no appreciation

Let's use your numbers. $4,400/mo payment vs renting the same unit at $3,400/mo. That's $1,000/mo extra they are paying. Most expensive areas don't up rent if there is not turnover, but that would cut into it, sure. Ok, so over 6 years, that is $72k more they paid to own than to rent.

But they made $80k in appreciation (fact). Lost $15k in closing costs (my #) on the purchase and $35k in realtor fees in the sale (your #). Paid $10k in maintenance (your #). They paid down $40k in principle (my calculator's estimate based on your monthly payment). Net $60k in equity, $40k of that from their own pockets.

They paid $12k more to live in your house for 6 years as owners than renters, and they had $70k liquidity tied up in the downpayment for those 6 years.

Sure there are write offs, etc, and you get more as a business owner. But there was nothing to be gained from buying and selling your house from 08-14 like there was from 99-0X. I contend that your numbers are low, and the longer one stays in a home, the more the maintenance costs build up. But there is no doubt that, if they were to stay in the home until 2038, they would have made a good decision financially. But leaving when they did was a wash, at best. Probably why they left when they did...they were expecting a huge profit from which to move up. Instead, they cut their losses at close to zero and moved up on their own volition. Anytime prices 'recover', this is normal behavior...but not many can move up on their own volition, so the move up market is weak.

SiO2 says

Really need to calculate it out vs assuming 1%

If somebody cares to calculate it out for a $1M home I will listen, but I will also counter argue. I completely understand that 1% is an overestimate, but I've already heard on this thread of a totally non exhaustive list: water heater, appliances, kitchen, paint. This hasn't included anything exterior, and it is non exhaustive on the interior. The number I used in the previous post was the OPs, which is less than $2000/yr. I for one will not be buying a $1M home from someone who paid less than $2000/yr on maintenance, unless it is sitting on a 3/4 acre lot. There are some here...and I have my eyes on them!! :)

JH says

Let's use your numbers. $4,400/mo payment vs renting the same unit at $3,400/mo. That's $1,000/mo extra they are paying. Most expensive areas don't up rent if there is not turnover, but that would cut into it, sure. Ok, so over 6 years, that is $72k more they paid to own than to rent.

You're conflating the two. My former place had PITI of about $2K (not $4400) and I rented it out in 2007 for $3400. I would bet you could get at least that in rent. Even if you bought it now at $699K, the PITI is $3600 or so. This assumes no deduction or principal paydown. You get the deduction, which is better than the standard deduction, or else you wouldnt qualify for the loan. Ignoring this messes up the numbers. Just like ignoring maintenance messes up the negative side of owning.

Current place for me is the same. $3077 for mortgage, $300 for ongoing maintenance and insurance, $850 for prop taxes. About $200 more than renting at $4K, but I get all the prop taxes back in a deduction, or else I wouldnt qualify for the loan based on income limitations. So not counting forced savings, it is $3377 vs $4K.

Of course if I bought now, my mortgage would be a good $800 more/month, and prop taxes would be higher. After the deduction for prop taxes, you are looking at breakeven, not counting principal forced savings.

If you have PMI because you didnt put down 20% and have a bigger mortgage, dont get the tax break from interest writeoff, etc, then it likely is better to rent.

JH says

If somebody cares to calculate it out for a $1M home I will listen, but I will also counter argue. I completely understand that 1% is an overestimate, but I've already heard on this thread of a totally non exhaustive list: water heater, appliances, kitchen, paint. This hasn't included anything exterior, and it is non exhaustive on the interior.

I said I paid $4K to paint the outside of my house. I also threw in FieldTurf at $2500 in my numbers. Figure both last 8+ years. At 1% of a $1M house, what are you annually spending $10K on?

JH says

SiO2 says

Really need to calculate it out vs assuming 1%

If somebody cares to calculate it out for a $1M home I will listen, but I will also counter argue. I completely understand that 1% is an overestimate, but I've already heard on this thread of a totally non exhaustive list: water heater, appliances, kitchen, paint. This hasn't included anything exterior, and it is non exhaustive on the interior. The number I used in the previous post was the OPs, which is less than $2000/yr. I for one will not be buying a $1M home from someone who paid less than $2000/yr on maintenance, unless it is sitting on a 3/4 acre lot. There are some here...and I have my eyes on them!! :)

Totally get this, and it is a personal choice. I grew up on a 1/3 of an acre, which is a big lot in our town, but not where Im from. I have a rooftop deck here, and go to the beach every weekend for 5 months of the year. Sometimes I miss not having a lawn, but my kids seem fine. They still play basketball with our neighbors' kids in both driveways. Kids are resilient. They find ways to have fun no matter the size of the lot.

Waitingtobuy says

You're conflating the two. My former place had PITI of about $2K (not $4400) and I rented it out in 2007 for $3400. I would bet you could get at least that in rent. Even if you bought it now at $699K, the PITI is $3600 or so.

You are comparing apples to oranges. First, your PITI from 1999 purchase vs. the $4400 that is in your calculator for a 2008 purchase. Second, buying in 2014 vs 2008. Same monthly payment because the interest rate is lower now pretty much no matter the downpayment.

Not sure where you are getting $4400 from for a house priced at $699K with 20% down, but it isnt my calculator. My calculator says $3661. Again, no deductions, and no principal payments included.

I cant even get that for a house priced at $799K.

Call it Crazy says

If the median house price today nationwide is like $275K, then 1% ($2750. a year ) would be low. If you had to replace big ticket items (roof, HVAC, kitchen, bathrooms, carpet, etc) over a period of years, you'd blow through a lot more then that...

Sounds right. Depends on the type of roof. Tile and concrete shingle roofs last 25-30 years. HVAC is what, $6K-$7K? (dont know..we dont have AC and heat isnt on a lot). Carpeting a 2000 sq foot place is $2500. Bathroom reno every 15 years for 2 baths is $20K. Kitchen reno is $40K every 15 years.

If you stay 15 years, then maybe an average of $5500/yr. Still not 1% of a $1M house. Likely 2% of a $275K house.

Waitingtobuy says

Not sure where you are getting $4400

Post 46. We are talking about the buyers of your house in 2008.

Waitingtobuy says

Likely 2% of a $275K house.

We are making progress. It's creeping up again. 2% of a 275k house is 5.5k/yr. You agreed that was for a $1M house. Now for your $620k house someone bought from you in 2008, let's estimate it as (0.62*5.5k/yr*6yr) $20k. That is twice the number I used in post 61 that you had previously agreed to. I like the direction we are going. Nothing like a boomer who has bought and sold 6 times to help us do the math :)

Call it Crazy says

I was spending around 3% a year

You must be lining your baseboards in gold. Wait, what's your address again?

JH says

Post 46. We are talking about the buyers of your house in 2008.

Post 46 calculator includes property tax and insurance, and still is $900 less than $4400. Check out the image again.
JH says

Now for your $620k house someone bought from you in 2008, let's estimate it as (0.62*5.5k/yr*6yr) $20k. That is twice the number I used in post 61 that you had previously agreed to. I like the direction we are going. Nothing like a boomer who has bought and sold 6 times to help us do the math :)

The $5,500/yr is averaging it if you live there for 15 years. True. IF you do total renovate. The owners of my old place didnt, except for some room painting, a new dishwasher, fridge, and installed fake grass. They also didnt replace the roof and whoever owns it wont need to for another 15 years. They also didnt replace the HVAC. Total cost over 6 years that I could see...maybe $5K. They moved in with new carpeting, paint, refinished flooring, etc.

My current place is almost 14 years old. By the 15 year average I detailed, I should be replacing the HVAC (may do so, but likely wont; figure $3K of repairs), renovate the baths (I have nice baths so no; just painting the cabinets for $1500 and a new shower door of $1K), reno the kitchen (no again; new appliances over 15 years should run me $4K, and painting the cabinets to cost me $1500). I painted the outside for $4K, will again in another 10 years). Maybe roof repair of $4K, but doubt I will need another entire roof. One more carpeting run in 7 years of $2500. Total with the $20K I dumped in at the start and last three years is $41.5K. Figure another $4K in misc and unseen expenses. Average of about $3K/yr over 15 years.

BTW, GenX, not a Boomer. ;-)

Waitingtobuy says

Post 46 calculator includes property tax and insurance, and still is $900 less than $4400. Check out the image again.

It's still $4372; you changed it last night with the updated int rate. Yes, it includes tax/insurance. That is the TI in PITI.

Waitingtobuy says

Average of about $3K/yr over 15 years.

That's fine. I just used your 2% estimate on a smaller/cheaper house. But it depends on the person, age of home, etc.

Waitingtobuy says

BTW, GenX, not a Boomer. ;-)

I was referring to CiC, another person who understands the cost of ownership in a market that doesn't normally appreciate 20% a year. (Which is all markets, btw haha)

Waitingtobuy says

My current place is almost 14 years old. By the 15 year average I detailed, I should be replacing the HVAC (may do so, but likely wont; figure $3K of repairs), renovate the baths (I have nice baths so no; just painting the cabinets for $1500 and a new shower door of $1K), reno the kitchen (no again; new appliances over 15 years should run me $4K, and painting the cabinets to cost me $1500). I painted the outside for $4K, will again in another 10 years). Maybe roof repair of $4K, but doubt I will need another entire roof. One more carpeting run in 7 years of $2500. Total with the $20K I dumped in at the start and last three years is $41.5K. Figure another $4K in misc and unseen expenses. Average of about $3K/yr over 15 years

When comparing owning to renting, need to compare like to like. For example, few landlords are going to spend $4k on kitchen appliances every 15 years. A fridge is $600, dishwasher is $400, range is $500. And a range like that will last longer than a $5000 subzero-type appliance.

I wouldn't call a kitchen update "maintenance" if the old kitchen is serviceable but outdated. It is true that an owner is more likely to spend money on house improvements than a renter, but, that's a discretionary choice.

SiO2 says

It is true that an owner is more likely to spend money on house improvements than a renter, but, that's a discretionary choice

Buyers also have free will. And they tend to exercise it. IOW, if one tries to sell a serviceable but old kitchen with olive appliances and then slap a $1M price tag on the house...well...

This is not a hypothetical example, by the way.

I would definitely call upgrades "maintenance". It's called "maintaining" the house in a condition that is marketable. But you can budget it in whatever category you want. It still subtracts from your bottom line...either as payments to maintain or as lost "appreciation" opportunity value.

Call it Crazy says

One of the fabled wives tales

Fabled? Don't all wives think that way ;-)

Actually my wife is low maintenance...a better budgeter than I. :) :)

hahha. My (demanding, young) kids provide a nice buffer for me. But I could see that once they are gone, we will become project kings. Actually, we do quite a bit on our rental. Painting, cleaning (both her ideas groan), and a LOT of outside work (my pet projects). As much as when we owned, except then I built a new bedroom. Won't do that on a rental haha!

Oh, and garage painting, shelving, and workbench...as I sit here working at it... All her ideas, I think... Wait, who said renting is any cheaper???

JH says:
"Yes, there is a clarion vision: buy when low and sell when high. "

Exactly my point! They ascribed their success to talent in decision making where it was mostly manipulated markets. The graph is awesome. Thx!

Waitingtobuy says

You're pretty accurate with the 401k, although I have a PSP and I401K, not 401K. I own a business and can deduct a lot to minimize my YE taxes.

As for college, no one saves more for college than retirement. $56K is more like $12K-$15K/year these days. I've been saving since 2001. You can always borrow for college, but not for retirement. Below is proof. Notice the name of the 529 plan is included in the image.

$17,500 retirement
$15,000 College
$18,000 SSI/Medicare
$48,000 Mortgage PITI
$6,500 Federal income taxes
$2,000 State taxes (assuming CA)
$2,400 Electricity/Gas/Utilities
$1,200 Cable TV/Internet
$1,200 Insurance
$12,000 Food/Entertainment (family of 4)

$123,800

I went completely light on all your expenses in your million dollar home. You are completely house poor. You have zero money at the end of the month and if your car breaks down you will have to do a heloc to buy a new one. /golfclap

The funny shit is that you think you have made good choices.

Waitingtobuy says

My current place is almost 14 years old. By the 15 year average I detailed, I should be replacing the HVAC (may do so, but likely wont; figure $3K of repairs), renovate the baths (I have nice baths so no; just painting the cabinets for $1500 and a new shower door of $1K), reno the kitchen (no again; new appliances over 15 years should run me $4K, and painting the cabinets to cost me $1500). I painted the outside for $4K, will again in another 10 years). Maybe roof repair of $4K, but doubt I will need another entire roof. One more carpeting run in 7 years of $2500. Total with the $20K I dumped in at the start and last three years is $41.5K. Figure another $4K in misc and unseen expenses. Average of about $3K/yr over 15 years.

Your million dollar home is starting to look like some dude making 120k/year owned it. You will have a dump in 15 years with your idiotic amounts that you think you need to spend.

yup1 says

Your million dollar home is starting to look like some dude making 120k/year owned it. You will have a dump in 15 years with your idiotic amounts that you think you need to spend.

Real(hidden) cost of home ownership, every one involved in a real estate transaction does not want a buyer to know about it.

yup1 says

I went completely light on all your expenses in your million dollar home. You are completely house poor. You have zero money at the end of the month and if your car breaks down you will have to do a heloc to buy a new one. /golfclap

The funny shit is that you think you have made good choices.

No, to me, the funny shit is you think I dont have any money saved up. Your estimates for taxes are way off (SSI was way less last year based on me receiving partner payments as half my income). I have a really good CPA who is very honest, but smart. Im also able to shelter a ton of money based on contributions to retirement. (in case you dont know, the tax code was written for business owners, especially small business owners). This year I saved $38K in retirement. I also am contributing $12-$15K for my kids' 529s.

You called my "bluff" and basically called me a liar about saving. I showed you the balances in my kids' 529 in post 53, but I heard crickets from you. Why? You on the other hand have not shown me anything about how you are a great money manager.

As for my place being a dump, think what you want. My place is really nice, has very nice finishes, new flooring, etc. Only thing I dont have is much of a backyard with space. The beach is my backyard.

I am really good at getting bargains. My wife is even cheaper than I am, which is one reason I married her. We are trying to raise our kids to respect money and save; so far, so good. I dont believe in materialistic crap, but have a nice home in an upper middle class neighborhood. When I go out to eat lunch, I go and eat from Wendy's value menu. (meanwhile, my college friends are investment bankers, lawyers, doctors--they aren't eating at Wendy's) My last car was a Hyundai, yet my sister who is broke drives a Beemer and before that an Infiniti. My friends are amazed, and some of them make a good amount more than me. I even end up traveling to Europe every summer with my wife and two kids to see family. Havent paid for a plane ticket to Europe since 1993 (tons of frequent flyer miles).

You are right about one thing...no money at the end of month. Sometimes it gets pretty tight, and I have to tap my business line of credit to make payroll, pay vendors, etc. However, I have no cc debt and my business line of credit is all paid off--I never carry debt for long for my business, and never for me. All my partner payments besides expenses go to retirement, college savings, and a cash cushion of nearly $100K. Im a super saver, and have been forever. Heck, when I couldnt get a job after graduating with an MBA 20 yrs ago, I delivered pizzas and still managed to sock away retirement money (ok, just $2K).

I have no reason to lie. None of you know my name, only my user name, and I dont get my jollies from praise with my user name. Not sure yup1 why you are sour grapes.