patrick.net

Nothing. Everyone is simply afraid of “missing out” and being “priced out forever”.

Priced out? Who will support the market then? MIRAGE?

hymie,

C'mon. Everyone "knows" that renting is bad for you. Long-term it leads to jealousy, bitterness, crime, job instability, bad relationships, unwanted pregancies, etc...

You will *never* be complete as a human being until you've owned a home, or rented money to live in a home that the bank really owns. Some people consider falling in love or having children to be the most fulfilling experience a person can have in life. Let me tell you, it PALES in comparison to making those mortgage payments every month, my friend.

It has just come to me why the Gen X crowd is so angry

Who says we are angry?

Instead of being angry, channel that energy to something useful/positive!!

Please suggest a strategy to capitalize on the demise of the marginal recent homeowners/speculators. That is the positive thing I have in mind.

Man, I wish I had gotten out of college and earned 50/60/70K a year! I thought I was a big shot if I was earning 20K.

I think there is a lot of social pressure to own. When I tell people I rent, boy do I get some looks. But the house I'm moving into costs 60% less to rent than to own. Why the hell would I buy? But everyone always says "but you have money, you could buy?" Or here's my favorite, "you gotta stretch to get into that first house."

The gov’t encourages us to spend (propping up a faltering economy), therefore, I save.

To be fair, "not spending" alone is insufficient. Having a sound investment plan is essential. As we have discussed before, supercharing the rate of return by just 2% per year will improve end result by more than 100% over 40 years. To match this with increased saving alone one will need to put away more than 100%!

Why do you think that it’s only the boomer causing all your woes?

I'll toss in this rant I posted elsewhere...

I don't want to nail the "Boomers", because I think it's more a mentality than a demographic. It has much more to do with chasing after "the good life": consume until you die, and common sense be damned.

This mentality gets hooked easily on a herding lifestyle that appeals to vanity, greed, and the hoarding mentality. Much of product marketing targets this impulse; they see their friends doing/buying it, and they follow. The readily buy into crazes: beanie babies, those trite Kinkade paintings (or Leroy Nieman), Y2K survival, huge SUVs, execrable Lladro figurines, junk dot-com stocks, Amway, new age tchotchkies, dieting supplement resale, and now real estate.

Once bitten by the fad, by overnight they become experts, spinning wide-eyed yarns about health supplements, heralding dot-coms as the "New Economy", smugly gloating that "real estate never goes down". It's impossible to objectively engage them in their mania and bring them down to earth; that would burst their illusion. If they're banking on quick profits, critical thinking goes out the door.

Fittingly, there are businesses who play these foolish minds, promising wealth, luring them into half-baked schemes--and parting with their cash. Such was the dot-com--a well-engineered ploy to overmarket bad business and sell high before the little guy spun his head around. So do we have a similar situation today? Certainly the noise from the RE pundits sounds familiar: "Act Now or Miss a Unique Opportunityâ„¢". And once again, as greed often prevails over critical thinking; the sheeple will get royally fleeced.

I think there is a lot of social pressure to own. When I tell people I rent, boy do I get some looks.

I do not care how other people see me.

To be fair, “not spending” alone is insufficient. Having a sound investment plan is essential. As we have discussed before, supercharing the rate of return by just 2% per year will improve end result by more than 100% over 40 years. To match this with increased saving alone one will need to put away more than 100%!

My husband showed me some spread sheets showing how much more money you have after investing long term at a fixed percentage rate can earn you. It just shows that even "mediocre" investing is worth it long term.

My husband showed me some spread sheets showing how much more money you have after investing long term at a fixed percentage rate can earn you. It just shows that even “mediocre” investing is worth it long term.

Exactly!

I do not care how other people see me.

Mostly I don't care either, but the social aspect of this mania affects my children and whom I can get play-dates with, and that burns me up. One of the reasons I am moving is to go to the other side of town where the lifestyle is more middle-of-the-road and no one really cares who rents/who owns. It's ridiculous what all this percieved wealth has done to a once nice little town.

For example, if you contribute $5000 a year to your retirement, at 8% return you will have about 1.3M after 40 years. But if you start with just $5000, do not contribute anything afterwards, but can manage 15% return, you will have about as much after 40 years!

Now, 15% return over the long term is very difficult to achieve, but this demostrates that investment strategy is more important than just saving.

(Not investment advice. Not retirement advice.)

SactoQt, I just do not understand why people look at renters differently. It is a simple financial decision about numbers and numbers only.

SactoQt, I just do not understand why people look at renters differently. It is a simple financial decision about numbers and numbers only.

It should be. I just think that with the wealth effect that has come with the RE market has come a snobbery. I guess it's the same as with the dot.bomb and all the other bubbles. It brings out the most obnoxious side of people.

SactoQt, let's just forget about other people (except clients and potential business partners of course) and focus on the true priority, which are IMO...

1) Happier family
2) Higher investment return
3) Higher income
4) Higher saving rate

The sun is going to burn out in a couple billion years anyway…Surfer X is one AWBWRE…angry white boy without real estate

Huh?

These are your priorites?

So what?

How about enjoying each day…Appreciating good health…
Caring more about family than the almighty toadskin

These are all about "Happier family", no?

Not wanting everyone suffer/lose money…

Are you a communist or something? We are playing a zero-sum game. Someone has to suffer.

Being thankful for what you have…Kindness

Sure... but how is that a "priority"?

There doesn't seem to be much work ethic anymore, that's for sure. Everyone figures you can sit back and watch your house/stocks earn your living for you. When that doesn't work anymore, I'm not sure what people are going to do. I do worry that a recession could affect our ability to just get by. But my husband has worked through setbacks before and I can always jump into the workplace if necessary, so I think we'll be ok. But a lagging economy is bad for everyone, I think most of us agree on that.

I am actually a libertarian…That doesnt mean I will be happy
if people suffer….I dont want to get as negative as most
people on here.

Okay, you had me worried. :)

I do not wish harm on people either. It is just that in any place other than Utopia someone must be worse off than others. As a libertarian, I am sure you will understand that everybody is out there to fend for himself/herself and perhaps a selected few that he or she cares about. It is a very sad reality indeed.

The first 15 years after school should be to have fun…The next 15 years should be to earn as much as possible/save.
The next 15 years should be to manage/invest what you have saved….So sitting back/investing/managing is not a “bad” thing.

Perhaps... but investing is about getting time to work for you, thus one should start as soon as possible. One should strive to have fun while making money in a job that serves the society. Not a easy thing to do though.

But a reality nonetheless, one that must be coped with, no?

Absolutely.

If that workd for you, fine, but there are many other ways to skin the cat.

Leave that cat alone, please.

My fear is getting stopped/wiped out of my short-side positions before the recession and bear market start.

Dipanjan, you have to be prepared for getting stopped-out. Taking losses is a very integral part of trading, no?

Lets say you made a couple/few million by saving/investing and you are in your 50s…How would you spend your energy?….Put your head down in your work/career, or look for ways to make your money make money?

If I have the resources, I will probably run some foundations to "save" the world. Helping others is important but it should be done and can be done only if you have the power and resources.

Caring more about family than the almighty toadskin…Not wanting everyone suffer/lose money…Being thankful for what you have…Kindness

Good thing for me to remember--that I shouldn't gloat over my gain/other's loss; miserable existence actually. However, a small part of me doesn't mind if smug investors lose their shirts; I hate seeing how this thing has stressed the incomes of people who simply want a home.

As a possible hedge, has anybody here considered foreign currencies? I know a guy that converted half of his cash to euros a few years back. Not bad, in retrospect.

Jack, hehe...happy to entertain.
And with that, I'll post my all-time-favorite rant:
http://tinyurl.com/d98kk
OT to be sure, but what the hey...

Economist: I worry about those things too. I hope those things don’t happen again. We went through that in the late 1970s, and I would hate to see our country’s living standards fall. But, if they did happen it would not be the end of the world. The average person would still have a higher standard of living than what was the norm a few decades ago. However, it would be a major adjustment for those who have only experienced the last few decades.

"Lets say you made a couple/few million by saving/investing and you are in your 50s…How would you spend your energy?….Put your head down in your work/career, or look for ways to make your money make money?"

At some point you keep working because your love of the game supercedes your financial incentives. Or you are hyperactive and can’t stop. The energy that propels you to such success often precludes withdrawing from the action. Unless you find a new passion…

Jack: Compared to a few decades ago, when we use the inflation adjusted incomes of the middle class from that time and carry it forward to today, we do find that the middle class is shrinking. But, the bottom class is also shrinking. The affluence of America has grown significantly over the decades. The real growth in living standards has averaged about 1% per year for the last 50 years, propelling the majority of Americans to greater affluence. Unfortunately, we are now becoming obese and soft as a consequence. Some would say spoiled. It has been referred to as affluenza.

I think that the average american now consumes so much, and has so much material wealth, that we are suffering in other ways.

Much of this wealth is good, to the extent we use it positively.

affluenza

The sickness of the affluent, it fits doesn't it? It's amazing when you think the poorest in this country live better than most people in the rest of the world. Kind of makes me feel like a schmuck complaining about the housing market but the more you have, the more you want.

I re charge by sitting outside at dusk until it gets dark. WAY easier than going to the airport, waiting, sitting on a plane, TWICE, to do nothing.

I recharge by reading a good book. If you buy them at half.com you can get a paperback for less than $4.00 with shipping. Good, cheap entertainment.

My biggest fear is that the government will attempt to bail them out in some made up reason to save the economy... so in the end, those of us who are wise with our money end up paying for it all

I have a question. Suppose there is a government bailout, what does that entail? Who benefits? If a homeowner defaults on their NAAVLP, and they're facing bankruptcy, does a bailout matter to them? I guess I'm wondering what are the consequences of both bailout/no bailout.

Re: healthcare

It's a reasonable fear with an aging boomer generation. Health care is going to face a real crisis soon.

All,

I have the misfortune of owning a domain that is very close to the domain of a small credit union, and I get email intended for the credit union all the time. I offer the following email I received today, edited only to protect the... well, whatever:

=====================================
From: l*** r******
Subject: my e-mail address
To: ***@****.org
X-Keywords: Junk
X-UID: 8583

[-- Autoview using lynx -dump -force_html '/tmp/muttZ7Xesa' --]

A reminder to send a loan appl. to me please.
_________________________________________________________________

Yahoo! for Good
=====================================

_smile_

The only way to win this game is... not to play.

Cheers,
prat

"Who benefits?"

I'm gonna go out on a limb here and say... the boomers.

Utter speculation, I admit. But call it a hunch.

Cheers,
prat

Face Reality,

Welcome back! Hope you stick around a while this time. Agree with you that BA prices are unlikely to fall by October, but seriously doubt they'll stay in the stratosphere forever. Nothing defies the laws of gravity forever (except Realtor hype).

My prediction for the start of a CA/nationwide crash is still no later than end of 2007, though I think modest declines will be underway in most areas by mid-2006. See out "FuckedCounty.com" thread for everyone's 2 cents. $1.3 trillion in adjusting/amortizing neg-ams & IOs + inevitable change in "investor" psychology is bound to pop this sucker by then. If it goes beyond '07, then its truly a New Paradigm.

Definitely agree on the healthcare crisis. No easy answers there, plus Americans seem to be getting LESS healthy and more obese by the minute.

There are obvious ways to solve the healthcare problem... for example, we can introduce some form of "subprime" program. IMO such program is much better than no program in terms of solving a clear and present problem.

The "subprime" healthcare program can be supported by imported medical personnels. Alternatively, we can create some 3 year accelerated medical associate degree to quickly reduce the cost of medical care.

To me, providing medical care at 70% competency to 100% of the public is not a bad choice at all.

I am not kidding.

It would not surprise me if America resurfaces from the soft depression of the early 21st century with a national healthcare plan. But the plan will be a disappointment, because it will simply be a veiled attempt to get young people to pay for the health care of the boomers.

True. If the Katrina disaster has demonstrated anything it's how inefficient government is on all levels. I don't want to get into a political debate, but does anyone really think the government does anything better than can be done private sector? (though private sector hasn't been a rousing success-- but that's another discussion) All government does is tax and spend the money on a committee to decide how the money should be distributed to various state committee's who then vote on which branch of government gets the next raise. How many cents on the dollar of our tax money actually gets spent on anything we vote for?

We must relax our standard of doctors or create another tier of medical care before it is too late. Why should all doctors go through so much education? Why is it considered ethical to keep healthcare so expensive? On the other hand, why is it considered unethical to reduce standard and make sure that healthcare is more accessible?

How many cents on the dollar of our tax money actually gets spent on anything we vote for?

Good question.