patrick.net

ForcedTQ says

RWSGFY says

2 yrs worth of expenses in cash? Insane. Especially now.

Exactly, if you’re living correctly, 3-6 months emergency fund for expenses MAX. By that I mean you’ve paid off your debts, and are paying off your house or it is paid off.

With mortgage at 2.25% and inflation north of 8% why the fuck would I want to pay off my house now?

Tenpoundbass says

I managed number 5, I think 3 and 4 are out of order. I don't think anyone has any financial freedom as long as they have a huge chunk on a credit card.
Four really should be a nonstarter. As the whole point of 3 is making enough money to have a nest egg, and emergency funds. If you're making money and have the cash in the bank, you really shouldn't buy consumer hard goods on credit cards, unless you're only doing so to rack up the points, and you zero out the balance when you get the bill.

I've known people with $25K in credit card outstanding debt, they are one paycheck away from ruination.

Ruination from CC debt? How? It's literally the easiest type of debt to walk away from.

Tenpoundbass says

Spent the summer of 78 in Salem SC, I lived in Jacksonville FL, friends of the family took me to SC to spend the Summer in their trailer way way way up in the woods on top of a foothill next to the mountains. I bailed hay, split wood, picked apples, peeled apples, spread them out on clean bed sheets in the sun to dry, tilled soil, worked the garden. Smoked my first Joint(the oldest son, 17 yrs old) Had a Bronco, would go palling around on trails with him and his friends. Lost my virginity to the daughter(13 yrs old) well she kind of raped me by today's standards. I left Jacksonville a little boy, came back a full blown Mountain man.

I did something similar when I was 18. I went to live with my HS girlfriend and her family in Pennsylvania. I worked in a slate stone quarry. Damn hard work. Her father (he owned a logging business) kept me busy also. I washed cars, mowed lawns, changed oil, ran tons of errands etc. The girlfriend and I did find plenty of time for hanky party though. I'm still shocked my parents let me live there for the summer. It was the summer between my junior and senior year in HS. My parents started me late in school so I didn't graduate until I was 19. Don't judge.

Ruination from CC debt? How? It's literally the easiest type of debt to walk away from.

Or pay off. Seriously, $25k worth of debt can be easily eliminated with hard work and a little sacrifice. My brother declared bankruptcy on $18k worth of debt. All he had to do was stop eating out, buying new phones/electronics, and maybe get a weekend/night part time job and he would have erased it in a year.

4 isn't normal, your shit shouldn't be greasy, mushy and sticky, which those turds usually are. I mean it's normal that they happen, but if they persist, you've got bigger problems.

Oh I rode myself the fuck out of riding in the back of a pick up truck while we rode through the blue ridge mountains. Even waved at the Highway Patrol when ever I saw them.

Another way to look at the "4% rule" is "25 x expenses". They mean the same thing. It's easier for me to visualize the later. Others may prefer the percentage.

If your annual spend is $100k you will need $2.5 million in order to follow the 25x/ 4% rule. At that point you are probably safe to retire and let your money take care of you for once. There are outliers but the 4%/25x rules have been studied to death and they will work over 90% of the time through any 30 year period.

Don't forgot that, for most of us, we have more control over what we spend rather than what we earn. Get that annual spend down to $60k from $100k and you can shave a decade off the 'eating someone else's shit' phase of your life.

gabbar says

Love this idea. What do you mean by "remotely convenient to multiple potential employment sources"?

Try to live in a place where you can access 2-3 different cities with industries you're qualified in. In other words, pick a town within 30-45minutes of several other cities with some employment in your field. That way if an employer closes in one, you have at least one other employer nearby.

Try not to live in a place where the city you live next to is the only place of employment within any kind of reasonable commute distance.

gabbar says

What are examples of good debt?

Asset debt not liability debt. Debt that pays me instead of me paying it.

I drove my Grandpa's Oldsmobile on the Southern State Parkway, went on a two week hiking thing on the Appalachian trail, and with my $10 largess from mowing the lawn, pockets were overflowing with candy and Slurpees as I biked all over the neighborhood.

Then I got a tingle from watching Electric Blue with the descrambler and busted my first nut just before I turned 12. So good I fainted and hit my head on the john on my way down because my ding dong didn't know to switch from orgasm to pee mode or something.

Bitcoin says

great article by Logan M like always. without extremely higher inventory, dont expect house prices to fall. But a cool down, sure and see that already.

a lot of escrows falling apart due to rising rates, this i was told by realtor who wants is to sell asap.

“Soft landing” like in 2008 😁

Same shit, different decade

FortwayeAsFuckJoeBiden says

Bitcoin says

great article by Logan M like always. without extremely higher inventory, dont expect house prices to fall. But a cool down, sure and see that already.

a lot of escrows falling apart due to rising rates, this i was told by realtor who wants is to sell asap.

dont doubt it. heard the same. no surprise. but will it increase inventory significantly? If you dont have to sell, why would you give up your locked in rate at 2-3% and lock in a new rate at 5.5%?

#1 year for boomers turning 65 is this year.

Many are counting on selling that property for their retirement.

AmericanKulak says

#1 year for boomers turning 65 is this year.

Many are counting on selling that property for their retirement.

I have heard boomers are retiring and selling in droves for years now. Most boomers will stay put. Fixed income, inflation, higher rates....they will remain in their house until their last breath. They might take equity out to travel or pay for health care. Reverse mortgage is also an option.

Ukrainian cannon fodder fools should be raiding Kiev and hanging the murder puppets rather than fighting Russia. Even Boris Johnson, as great a bounding fool as Biden in his own way, publicly admitted Russia could be 'winning' in spite of all of the MSM fake propaganda to the contrary. Russia is going to cut off access to the Black Sea, at which point Kiev will have to bow even if not conquered. Most of the legitimate enterprise as well as much of the criminal enterprise of the corrupt state flow through the ports.

American armaments winding up in the hands of the opposition seem to be a thing these days with the toothless Biden administration. Maybe when those NATO and American advisors finally crawl out of the catacombs under the Mariupol steel plant, they can tutor the Russians on how to use them.

Bitcoin says

If you dont have to sell, why would you give up your locked in rate at 2-3% and lock in a new rate at 5.5%?

Income and payments, not about rates. Sure the rates change but if I make $50k more, interest rates don't much matter. If you can afford 10% interest on the home you're purchasing, rates will eventually drop and you can refi. Job security, income and monthly payments are the biggest factors, not rates. People get way too caught up with rates.

I agree home prices are stable. Loans are the most solid they've been since the crash. I'd track income and jobs at this point if one is concerned with housing prices. Even then a "crash" would maybe be 10% on the downside. As much as I don't like Biden, the economy is not as bad as it seems in some echo chambers. We'll hit the ceiling with inflation and people that need to will cut back. We'll see if that results in job losses given we're a service based country.

WookieMan says

We'll see if that results in job losses given we're a service based country.

I do wonder if any potential job losses will be in places like China, or if any potential US job losses will look more like less help wanted signs everywhere.

Bitcoin says

AmericanKulak says

#1 year for boomers turning 65 is this year.

Many are counting on selling that property for their retirement.

I have heard boomers are retiring and selling in droves for years now. Most boomers will stay put. Fixed income, inflation, higher rates....they will remain in their house until their last breath. They might take equity out to travel or pay for health care. Reverse mortgage is also an option.

If they are considering moving from Metro to rural area and possibly downsizing many of them can sell and buy with cash, no mortgage necessary. Rates will have little to no effect on them, other than perhaps giving them more inventory to choose from in their move to location. In CA prop 13 will have them either staying put if they are happy with their situation or moving their tax basis with them to their new property.

WookieMan says

Job security, income and monthly payments are the biggest factors, not rates. People get way too caught up with rates.

Rates impact monthly payments. Its simply math. Affordability in housing is way worse since rates have increased. Its all relative because it depends on the house price/area. I live in SoCal, so we are talking 1M+ in order to get something decent.

https://www.nahb.org/blog/2022/03/how-higher-interest-rates-affect-housing-affordability/?source=patrick.net

a decent home in my area is 1.2M

with 5.5% rates and 20% down your monthly nut is $7,017 (PITI), $5,451 is just principal and interest, rest is 1.1% Taxes, HOA $300 and insurance 2k/pa.
with 2.5% and the same DP, its $5,360 (PITI), $3,793 is just principal and interest, rest is 1.1% Taxes, HOA $300 and insurance 2k/pa.

People who could barely afford the 1.2M with 2.5% can no longer afford to buy at 5.5%.

"If you can afford 10% interest on the home" Rates are relative. Many buyers can afford 10% rates on a 200k house. Not many can afford 10% rates on a 1.2M house.

AmericanKulak says

gabbar says

Love this idea. What do you mean by "remotely convenient to multiple potential employment sources"?

Try to live in a place where you can access 2-3 different cities with industries you're qualified in. In other words, pick a town within 30-45minutes of several other cities with some employment in your field. That way if an employer closes in one, you have at least one other employer nearby.

Try not to live in a place where the city you live next to is the only place of employment within any kind of reasonable commute distance.

What do you think about buying a home so constructed that you can rent out a part of your home to a tenant or as a airbnb? How about buying a property that has apartment/home located above a business?

Another way to pay off credit card debt is to die.
It's an "unsecured debt" so they are stuck with the debt when you finally depart this world.

"You can't taper a Ponzi Scheme" - Max Keiser

https://www.zerohedge.com/markets/biggest-story-no-one-talking-about-why-albert-edwards-expects-something-market-about-snap?source=patrick.net

What's happening is SO much bigger than the housing market.

Bitcoin says

Rates impact monthly payments.

Wages impact monthly payments. If no one has money for the monthly payment, they don't spend as much. Go to the source of how you're able to spend money, your employment, business or investments. The interest rate should mean little knowing that it will likely go down again and you can refi. A 2% swing in rates is minor payment wise on a 30yr loan. That's what people buy.

And yes, a $2M house it would make a difference on the payment. Your average to even above average homeowners is usually living in something worth less that $500k. It's not a big deal if you play around with calculators. The loans aren't shit like they were in 2003-06.

I've said it before. Watch the lower end of the market. If the below median priced properties start spiking, then you should start worrying. People get too fixated on the top end or higher priced homes. If the "minions" are spending more on a house, it's concern time. People of above average means will always have no issue with housing prices/payment.

porkchopexpress says

What's happening is SO much bigger than the housing market.

sure, if you quote zerohedge.
Zerohedge is like: alien apocalypse combined with zombie outbreak daily.
The sky is just a continuous fall with Zerohedge.
Zerohedge is dangerous because it can lead to being too defensive (in cash) instead of investing in the market. You want money allocated to stocks, RE and crypto.

AmericanKulak says

Most Olive Oil is tainted AF, too.

I remember reading years back that Italy exports three times the amount of olive oil they produce. Like in The Godfather, it's an industry dominated by the mafia. That's why we only buy it from California, but mostly we use Avocado due to it's high temperature tolerance.

WookieMan says

Bitcoin says

Rates impact monthly payments.

Wages impact monthly payments.

so that they we don't get carried away.....I was initially questioning the narrative that we get a lot more inventory due to higher rates. Higher rates are the reason why the market is finally cooling down - which is good! (doesn't mean YoY price reductions). its just a shift / cool down at this point. But I doubt that It will lead to enormous high inventory that will cause significant price reductions.
There is still a housing shortage, inflation and too much demand from high wage earners. The last time rates shifted the market temporarily was in 2018 when the FED went crazy with rates. shortly after rates dropped and prices exploded higher. I also think high rates are a 1-2y deal max, before they drop significantly.

Booger says

Because the US imports cooking oil from Indonesia?

Everything is a fungible commodity. If there's a shortage of X in country Y, Y will import X from all over the world.

This is the danger of globalism.

They are purposely making inter-dependencies on nations to WEAKEN the nation. This is a double edged sword - it prevents war because it leads to shortages in every case, but it weakens nations by making them subservient to artificial economic circumstances.

Bitcoin says

porkchopexpress says

What's happening is SO much bigger than the housing market.

sure, if you quote zerohedge.
Zerohedge is like: alien apocalypse combined with zombie outbreak daily.
The sky is just a continuous fall with Zerohedge.
Zerohedge is dangerous because it can lead to being too defensive (in cash) instead of investing in the market. You want money allocated to stocks, RE and crypto.

Time will tell. Remember, you used to make fun of "conspiracy theorists" about the vaccine, and it wrecked you. Don't dismiss alternative news sources.

porkchopexpress says

and it wrecked you

temporarily. I am fine now. Got the pfizer booster and had no issues. Once it comes due, i will get my next booster. Lots of business travel. This thread is about housing.

The #1 participants in war are neighbors.
The #2 most common participants in war are... trade partners.

NuttBoxer says

but mostly we use Avocado due to it's high temperature tolerance

AO is good. We use it. Fact is good ole' fashion butter is still the best cooking fat. Not healthy, but it's super abundant. If you move (walk/run) the health consequences are minor outside of hereditary issues. There won't be a butter shortage here in the midwest I can tell you that. I grease almost everything up with real unsalted butter. AO is great though for the high heat cooking level. It's butter or AO on the flattops indoors or outdoors. Olive oil when necessary. Don't think I've purchased palm oil, but I'm sure it's in stuff I've eaten. I won't notice a difference if there's a shortage. I'm easy to please food wise cooking at home.

DooDahMan says

She said most homebuyers in the $2 million and over range are not as adversely impacted by interest rates, but that doesn't mean they're getting what they want either.

You're talking about a micro market of the economy. Fly over country you're rich if you have a $500k house. CA is not the reality of the rest of the country. Median is $200-250k in my small town. You take away the the high end that raises the median price, most people are buying $250-350k houses across the country. 1 in maybe 100 people are buying $2M houses as a primary residence.

Bitcoin says

i will get my next booster. Lots of business travel. This thread is about housing.

It is housing, but you don't need the vaccine at all. I've traveled a bunch and outside of wearing a mask I've had no issue. You still have to get tested coming back in if traveling internationally. Vax or no vax. It's an admittance that it doesn't work and they know it. Why test if the vax worked?

Bitcoin says

porkchopexpress says

and it wrecked you

temporarily. I am fine now. Got the pfizer booster and had no issues. Once it comes due, i will get my next booster. Lots of business travel. This thread is about housing.

I'd say it's also about insanity..

It's networking. Has nothing to do with knowledge. You get little to nothing from college that you cannot just figure out on your own. Outside of invention, knowing people is the biggest value add you can have as a person. Degrees are generally worthless if you want to learn on your own. You go to college to meet people. That's basically all it is.

richwicks says

I'd say it's also about insanity..

Prices are not insane in the US but you would have to have a comparison in order to grasp it. I travelled to more countries than most and have lived in Europe. People can still afford to buy in the US. In other tiny countries where rates are 1%-2%, with virtually no inventory, prices are way higher than here. A dual high income family has often no choice but to rent for decades.

In the US you can buy if you have a decent salary and if you have invested in the stock market/crypto.
Not if you follow conspiracy theories all day long and waste time with zerohedge garbage though. That will probably keep you from investing and holding cash instead with is a terrible idea during times of high inflation......sometimes it might be better to listen to those who made it and are self-made millionaires :)

richwicks says

Bitcoin says

porkchopexpress says

and it wrecked you

temporarily. I am fine now. Got the pfizer booster and had no issues. Once it comes due, i will get my next booster. Lots of business travel. This thread is about housing.

I'd say it's also about insanity..

That's the only thing it's about.

Bitcoin says

porkchopexpress says

and it wrecked you

temporarily. I am fine now. Got the pfizer booster and had no issues. Once it comes due, i will get my next booster. Lots of business travel. This thread is about housing.

This thread is about the ability to make sound decisions.

porkchopexpress says

This thread is about the ability to make sound decisions.

Buying RE in 2020 was a sound decision. People told me I bought the top and will lose big time. Giant LOL.
Buying a rental in AZ in 2022 was sound so far. appreciated by ~50k in just a few month and my renter will pay my PITI with 25% down.

to each their own.

Fair enough. Let’s see what the next year brings. None of us have a crystal ball.