patrick.net

Why can't they just own something and enjoy it for what it is rather than only caring what they can flip it for?

Can someone recommend a commodity futures broker with reasonable (NOT necessarily rock bottom) commissions and great customer service?

I want to hedge with gold options. GDX/XAU options just don't track GLD well. :(

Thanks.

Oh, this show is great. The guy told the boomer his car might be worth 18K not 22K and he started arguing with him. Just as I thought, the graph showed the price tripled in the last couple of years, right in line with the easy credit we're talking about. These boomers, I tell ya!

DinOR, in 2004 I hit the 1 million mark in net worth

Malcolm, that is very impressive for someone your age, assuming no inheritence. I would tend to discount equity in a principle residence, cars, and collectables when calculating net worth, since these are non-productive assets.

@Malcolm,

"A cynic [Boomer] is a man who knows the price of everything but the value of nothing."
--Oscar Wilde

The tax bill and assessor records actually do seperate the two and then track both. For an income property you use that figure to depreciate the structure.
Not to be overly attentive to details, but shouldn't you get an appraisal to assess the values of the building and land as "the man" tends to error on the side of allocating more to the non-depreciable asset (land). At least this is what I've read (Holmes Crouch book, I think). I suppose you have to weigh the overall benefit of the appraisal vs. its cost.
Euro broke $1.50 today; okay, I am starting to get worried.

Oscar Wilde. Important of Being Earnest. Cucumber sandwiches. :)

Malcom,

They already have such a show. (It's called the Barrett-Jackson Auto Auction) Happens every year in Y-O-U-R.... favorite town!

Yes, no inheritance and that WAS including the principle residence that has dropped by $100K. Take off about another $250K in taxes that I then paid in 05, and 06 and now I'm where I am. To be considered a true millionaire you would have to exclude your home as you say. You could always borrow against it, put the cash in the bank, and have the same net worth excluding your home and loan note. That is, if joining the millionaires list is really that important. To me it wasn't I was happy just to pay off my house.

"and felt poor because everyone had access to cheap money"

And so did I.

I have a client that was frustrated his property loan didn't go through more quickly and I told him; "You should be rejoicing in this!" Having solid financials finally.... matter!

Harm, you slay me. I swear we got our sense of humor watching the same train wreck.

DinOr, Malcolm,

Access to cheap money does not equal wealth, you had nothing to feel "poor" about. Maybe you felt you were "underconsumers."

Never envy another man's debts.

Malcolm,

may I ask how old you are? It will save me an archive search...

It impacts what you can do. When every wannabe Trump is jumping on every bandwagon that you're on, the competition gets to where things (like investment real estate) stop making sense because a fool and his borrowed money especially, are easily parted. That's how you end up with houses valued at 3 times what the income stream says they are. In that respect you feel like you are in old Russia. You have money but no way to spend it properly and the interest rates are punishing if you want to save it. You have to take on more risk to gain the same rate of return, that's why I am so hopefull about the future now that credit is tight and cash is king again.

I am 36.

You have money but no way to spend it properly and the interest rates are punishing if you want to save it.

What about gold and platinum coins/bars?

Not investment advice

I regret not buying more gold when I did, but I had a little fun with it. I did well, can't really complain.
Not having a mortgage is the equivilent of investing that money at about 8% very safely, so I'm happy.

What about gold and platinum coins/bars?

Speculative, ain't we? Some folks like investing in items that pay a return. Why are you trying to inflate another bubble? Just for that, I'm going to try to bid up the price of sushi.

Not having a mortgage is the equivilent of investing that money at about 8% very safely, so I’m happy.

Yep, like having your very own form of rent control.

Speculative, ain’t we? Some folks like investing in items that pay a return.

I like investing in items that pay good *total* return.

I factored in an intuitive risk premium which is why I was conservative. I am definitely NOT a gambler or speculator. I currently make my living lending through commercial trust deeds. Some of the long time posters like DinOR know my activities in a little more detail since the subject has come up. I used to try to represent the investor's point of view on the threads where we talked about the roles of the servicers and what they can and can't do, and how mortgage pools work.

Buying gold and PMs when the Fed & Con-gress are trying to debase the USD like mad is "speculative"? Since when?

I agree that putting 100% of your savings/investment money into PMs is risky --as any undiversified investment is-- but having a small % as an inflation hedge hardly reflects a casino mindset. There are also plenty of other inflation-hedging plays out there: foreign currencies, oil/gas/commodity ETFs, etc.

I like buying into something with a tangible income stream where I can compare the rates of return and determine whether it is actually more than banking it. That's what I mean by everyone having access to cash sucks because you are then looking at a proposal where you get to invest money which should be called a subsidy since the return is so poor. Some of these deals look so ridiculous you have to put hundreds of thousands into them to just break even on a monthly basis. I then would say, why the hell would I do that, the response, "I know what you're saying but that's what these buildings are selling for." My biggest asset is that I have the discipline to say, thanks but no thanks, at leas the banks will pay me a real return.

least

The information I got from this site led me to buy gold when I did because I knew that was happening. Remember, gold had been very stable up until then, it was definitely a perceived risk. Very few things react logically in the marketplace, speculators and interests constantly throw it off kilter.

RE: Foreign currencies

I have a feeling that other countries will too run into "issues" like ours and have to debase their currencies like crazy.

Of course, some currencies are safer than others.

Not investment advice.

That's my fear with gold now, is that it has surpassed the real decline in dollar valuation but it seems unstoppable probably because of these legitimate future concerns. Logically, an ounce of gold should always buy the same thing, now it buys a lot of the same thing. Real wealth has been created by gold ownership over the last few years. That welath is further amplified if you want to buy a house which is decreasing in price as your gold is increasing in dollar value. It's a nice position to be in, then again, houses are dropping much faster than the inflation tax on your saved dollars so it's kind of hard to screw up right now. All these sideline buyers IMO are doing exactly the right thing, nothing!

People make a recurring mistake which is they feel they always need to be doing something. Sometimes doing nothing is a very logical decision.

Again, nobody should be married to his gold. Eventually, gold WILL become overpriced and a spectacular decline in gold price is in the future. For now, it looks interesting.

I swear to jump headfirst into the next financial orgy.

Disclaimer: I have position in gold and GLD.

Not investment advice

No offense intended, I just think buying a PM merely on the hope of price appreciation is a but speculative to ME.

Yes, the US gov looks like it is trying to devalue the dollar, but that fact is well known and may already be priced into today's gold. There is still a reasonable chance that gold and other PMs may fall in price.

I have paid off real estate that I think protects me against deflation or inflation. I am assuming we will get deflation in house prices, which is making my money in the bank more valuable to buy more real estate in the future. In the mean time, I am putting up with 3.5% to 6% returns (6% were long term CDs bought a couple years back). If we get rampant inflation that hits even house prices, I lose, and you PM folks win.

No offense intended, I just think buying a PM merely on the hope of price appreciation is a but speculative to ME.

Why is speculation bad? Success is mostly about making the right decisions by taking calculated risks.

Real estate is one of the best investments most of the times. It just happens that these few years are the exceptions.

Not investment advice

> * No one creates land (except perhaps in Holland).

It would not be hard to turn Richardson Bay in Marin in to a subdivision since at high tide it is only a few feet deep.

I couldn't find a map quickly right now....but present-day SF bay is only about 50% of the size it was pre-Anglo. People have been filling it in and "claiming new land" for a long time. "North Beach", now inland, once really was a beach in the 1800's. ;) The Marina district was an inlet that got filled with debris from the 1906 earthquake.

That's a difference in definition. To me speculation isn't a calculated risk, that's what makes it speculation. Buying a stock based on a trend is speculation. Buying a business with an income stream is a calculated risk.

Just for that, I’m going to try to bid up the price of sushi.

Be careful....I understand Peter P is dangerous when "cornered". :)

The problem of "doing something stupid with lots of people" is that the smart people bail early. I'm not certain that I qualify as "smart" but bailing out of Cambrian Park SJ in May 2006 is starting to look that way. I figure AU is already fairly pricey and that other precious metals like AG won't be as much of a hedge. The industrial use of AG is declining and there's still lots of AG in the ground around here just waiting for the price to get a little higher. What do you guys know about PT? As the world turns to more cat cons in cars and trucks, wouldn't investing in PT be both a precious metals hedge and a "green power investment"?

Peter P,

Oh, I suppose speculation isn' "bad,' I just prefer to create wealth than merely hoard it.

Fixing up or building a home up for rent adds wealth that did not exist before, Arbatrage and speculation just reallocate wealth that already existed.

Isn't a large part of SF built on reclaimed bay land? I thought that was part of why the 1906 earthquake was so bad because it shook up the looser fill material.

DennisN Says:
February 27th, 2008 at 2:54 pm
"Be careful….I understand Peter P is dangerous when “cornered”. "

Nice guy, just don't cut in front of him at the sushi bar.

I just prefer to create wealth than merely hoard it.

Huh?

Arbitrage and speculation just reallocate wealth that already existed.

Well, if it creates wealth for me, that is good enough. :)

Randy H will spin in his rental house if he hears this: human society is a ZERO-SUM game.

DennisN

Good point on the PT. But do hydrogen/electric/fuel cell cars need catalytic converters? Tesla types and plug-in may be one invention away from mass acceptance.

human society is a ZERO-SUM game.

If that were true we would still be merely allocating caves and hunting/gathering lands. Societies has obviously created vast wealth where none was before.

I said this once before but I went and saw some artifacts from King Tut in LA and concluded that the equivilent of most of these treasures were attainable to most people. The rise of mass production, innovations, and our modern forms of government have proved that entire societies can advance. It doesn't have to be the case that one person has to get poorer for another person to get richer.
A celebrity marriage and divorce is a zero sum game.