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  • #31
    Originally posted by TQP View Post
    It depends on your state's housing taxes. In NY the tax on multiple family homes is very high compared to single family homes. That tax gets passed on to renters and the rent is ridiculously high. When I can I am buying a shack... Even if it sucks.
    Oh, good point. There could be variability in specific locations.

    I think that's more of a lose-lose scenario unless you have a real reason for being there.

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    • #32
      Originally posted by DrHackenbush View Post
      I have to pipe up to your home-buying statement and say bullcrap under certain conditions. I do not think housing is a good investment. I've run the numbers, and you lose money on it when compared to stocks/bonds/mutual funds. If you purchase a home at 200k, you will end up spending about 270k for it. I'm talking in terms of "year zero dollars" because while you pay lots of interest on the mortgage, you also have monetary inflation helping you limit that effect on you. This is a conservative estimate too. Housing is going to get cheaper over the next 30+ years for multiple reasons.

      Chances are, young people will also want to move around. Rather than pay a month's rent, they could pay for a month of travel. Maybe they'll find someplace better to live than their current situation.

      Only if you have a totally settled life should you ever decide to buy a home. If you aren't settled, the truly frugal thing to do is share flats, share rooms, or live with family members. You could even go "Supertramp" on us, but I wouldn't recommend quite that extreme.
      I agree that under certain conditions, buying a home might not be great. Of the four homes I've owned, I lost money on one. A whopping $7k. I lived in it for seven years. Assuming a rent of $600/month (low for that area), I would have spent $600/month x 12 months per year x 7 years or $50,400. The $7k seems low in comparison. I paid very little interest on that home because I bought it with about 80% down. I had a two year mortgage. Still, for the average person, I stand by my statement. If housing/renting does actually become cheaper over the next 30 years, then I'll reassess. Until then, the average renter is only making his/her landlord rich while flushing money down the toilet.

      Young people moving around is also a valid consideration. But 80% of people die within 50 miles of where they were born. So, if a person thinks they are going to be in the same place for 10+ years, buying is better than renting. Again, not all markets are the same. Buying in CA is different than buying in NE.
      "Right is right, even if no one is doing it; wrong is wrong, even if everyone is doing it." - St. Augustine

      B*tch-lite

      Who says back fat is a bad thing? Maybe on a hairy guy at the beach, but not on a crab.

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      • #33
        Originally posted by JoanieL View Post
        I agree that under certain conditions, buying a home might not be great. Of the four homes I've owned, I lost money on one. A whopping $7k. I lived in it for seven years. Assuming a rent of $600/month (low for that area), I would have spent $600/month x 12 months per year x 7 years or $50,400. The $7k seems low in comparison. I paid very little interest on that home because I bought it with about 80% down. I had a two year mortgage. Still, for the average person, I stand by my statement. If housing/renting does actually become cheaper over the next 30 years, then I'll reassess. Until then, the average renter is only making his/her landlord rich while flushing money down the toilet.

        Young people moving around is also a valid consideration. But 80% of people die within 50 miles of where they were born. So, if a person thinks they are going to be in the same place for 10+ years, buying is better than renting. Again, not all markets are the same. Buying in CA is different than buying in NE.
        It's basically an economic rule that commodities become cheaper as developed countries progress. Thus, the value is in the business itself not the commodity. Invest in what grows the most, which is business.

        Furthermore, I think we are reaching the peak of the world's population. This is especially true in developed nations. Natural-born Americans are barely replacing themselves on average, and I expect the number of children per woman to decrease until the lifestyle changes fundamentally. America's population has only grown in recent times because of immigrants. If immigrants are becoming the new tenants to your reasonably-purchased rentals in 10 years, then I would expect that home's value to decrease further. This is no judgement of anyone's character. It's just shown time and time again that different cultures will often not respect each other's customs, among them being proper housing maintenance.

        Secondly, on the point about a decreasing population, this will increase supply and lower demand for housing even further. We could potentially even see ghost towns in suburbia in about 50 years.

        Lastly, I forsee an increase in economic separation over the next 30+ years. More people will be poor. Some will still be wealthy, arguably more wealthy considering the advancements in technology that they will be able to purchase. This will further limit housing prices because rent value is tied to average income, and housing value is tied to rent value.

        The future is very hard to predict due to it's chaotic nature. These are just my two cents.
        Last edited by DrHackenbush; 01-28-2014, 11:22 PM.

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        • #34
          I'm loving all the suggestions.

          I did start this thread cause someone in another mentioned that paleo/primal was expensive (and if your only eating the most expensive cut of meat you can find it will be)


          Sent from my HTC_PN071 using Marks Daily Apple Forum mobile app

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          • #35
            Originally posted by DrHackenbush View Post
            I disagree on the internet issue. I think internet is a critical resource.

            I will concede the movie theater issue, but that is one of my guilty habits.
            I think internet being critical depends on what you do. It's certainly handy, and we actually have it at home now, but did not for many years.

            Like I said, I think which of these someone chooses to do is going to depend on what's important to you. I just happen to prefer to spend money on a camera and a new backpack than going to see a movie myself, but those are certainly not necessities either. Just things I enjoy and if I have the finances available, no problem. It's just a list of ideas, all of which I've done for many years, due to having a job I loved, but that didn't pay much at all. Now I have a little more money that's free with a new job and no longer do quite all of them, because sometimes just tossing all my clothes in the dryer is so handy, or because I really want to drink a bottle of kombucha and am too lazy to make my own at the moment.
            ~Ariel

            http://arielcsblog.blogspot.com/

            "To argue with a person who has renounced the use of reason is like administering medicine to the dead." - Thomas Paine

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            • #36
              Originally posted by Ariel C. McGlothin View Post
              I think internet being critical depends on what you do. It's certainly handy, and we actually have it at home now, but did not for many years.

              Like I said, I think which of these someone chooses to do is going to depend on what's important to you. I just happen to prefer to spend money on a camera and a new backpack than going to see a movie myself, but those are certainly not necessities either. Just things I enjoy and if I have the finances available, no problem. It's just a list of ideas, all of which I've done for many years, due to having a job I loved, but that didn't pay much at all. Now I have a little more money that's free with a new job and no longer do quite all of them, because sometimes just tossing all my clothes in the dryer is so handy, or because I really want to drink a bottle of kombucha and am too lazy to make my own at the moment.
              The internet is a million things entertainment-wise, and it's arguably your greatest resource to produce future income. It's money well-spent.

              You can get movie tickets for $8 during the matinee period, and some places have old school theaters that show old school movies for just a couple dollars. For me, that's money well-spent when I get an urge to see a movie. I appreciate cinema. I understand if you don't so much, but it's hardly saving you any money.

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              • #37
                I disagree a little on having pets.
                We have chickens, they eat scraps, very little chicken food, give us eggs and sometimes meat, and entertainment.

                Sent from my HTC_PN071 using Marks Daily Apple Forum mobile app

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                • #38
                  Originally posted by Hannakb View Post
                  I disagree a little on having pets.
                  We have chickens, they eat scraps, very little chicken food, give us eggs and sometimes meat, and entertainment.

                  Sent from my HTC_PN071 using Marks Daily Apple Forum mobile app
                  Goats can be fun too. Get a few males together, make some popcorn, and kick back.

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                  • #39
                    Originally posted by JoanieL View Post
                    Drive a used car. A new car not only loses value the minute you drive it off the lot, but it's more expensive to insure. If you really like newer cars, buy one that is two years old. At that point, it has accumulated a lot of paper depreciation value while still being a great car.

                    Buy a home. This might not be true in all locales. But for the most part, when you pay rent, you're paying someone else's mortgage, taxes, maintenance, and insurance. You might as well pay for your own. After 20 years of rent, you have nothing. After 20 years of paying your own taxes, mortgage, etc., you have an asset to sell or borrow against.

                    Buy in bulk as often as you can.

                    Barter is a great thing. Do you know someone who knows plumbing/car maintenance, etc.? Exchange for taking care of their cat or doing their bookkeeping.

                    Even if you don't have the greenest thumb or much space, do an herb garden or grow anything that keeps you from having to buy it from a grocer.

                    Stay vigilant. The supplier that has the cheapest liver/ground beef/etc., might not have the cheapest bones/eggs/etc. If you have the time, stay current on these.

                    Rice, potatoes, tomatoes, peppers - stretch meals with not a lot of expense.

                    Take supplements. Do the occasional protein shake. No, it's not better than food, but in a pinch, it can save you money while giving you the nutrients you need.
                    I do work in investments/retirement...your statement about buying a home is incorrect unless you time the market perfectly. Long term appreciation of home assets about 4%, a diversified stock portfolio more than doubles that...so you buy your home, and ill invest the same amount as your down payment in stocks and most of the time i will come out ahead of you...and tax breaks on homes take 15-20 years to return a positive value when you consider average maintenance costs of a home that will be free in my apt..

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                    • #40
                      I should add that obviously locations and markets may vary

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                      • #41
                        Originally posted by codered5 View Post
                        I do work in investments/retirement...your statement about buying a home is incorrect unless you time the market perfectly. Long term appreciation of home assets about 4%, a diversified stock portfolio more than doubles that...so you buy your home, and ill invest the same amount as your down payment in stocks and most of the time i will come out ahead of you...and tax breaks on homes take 15-20 years to return a positive value when you consider average maintenance costs of a home that will be free in my apt..
                        I think how you maintain your home has a lot to do with how much you pay for the maintenance.

                        Just an example:
                        My step dad has owned his house for 20yrs. It's just had its first paint job on the outside since he bought it, from paint given to him for free, painted by a friend's son (for the price of food).

                        Sent from my HTC_PN071 using Marks Daily Apple Forum mobile app

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                        • #42
                          I'm buying my digs on short sale.

                          Mortgage will be less than rent.

                          You can't live in a stock portfolio.

                          M.

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                          • #43
                            Originally posted by MEversbergII View Post
                            I'm buying my digs on short sale.

                            Mortgage will be less than rent.

                            You can't live in a stock portfolio.

                            M.
                            Kinda the whole you can have a million dollars in assets but that's worthless if you can't buy food.

                            Sent from my HTC_PN071 using Marks Daily Apple Forum mobile app

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                            • #44
                              Originally posted by codered5 View Post
                              I do work in investments/retirement...your statement about buying a home is incorrect unless you time the market perfectly. Long term appreciation of home assets about 4%, a diversified stock portfolio more than doubles that...so you buy your home, and ill invest the same amount as your down payment in stocks and most of the time i will come out ahead of you...and tax breaks on homes take 15-20 years to return a positive value when you consider average maintenance costs of a home that will be free in my apt..
                              Except that in the meantime there's the issue of rent. That's lost money, the same as the interest you pay on your mortgage is. Even if you assume NO capital gains, it's still worth it to buy a house.

                              Back when I did the numbers I decided that the breakeven point was if you moved house more than every 5 years, meaning it wasn't worth it to own one if you move more frequently than that (since that's the breakeven point on real estate agent fees).

                              In addition to ignoring the cost of rent, I also think that 'investing in stocks' is a little disingenuous because it ignores stock market risk. There's a thing called the risk-return curve, which basically says that the higher a return is the higher the risk is. Theres NOTHING out there guaranteed to pay you as much as you pay your bank in mortgage interest.
                              Disclaimer: I eat 'meat and vegetables' ala Primal, although I don't agree with the carb curve. I like Perfect Health Diet and WAPF Lactofermentation a lot.

                              Griff's cholesterol primer
                              5,000 Cal Fat <> 5,000 Cal Carbs
                              Winterbike: What I eat every day is what other people eat to treat themselves.
                              TQP: I find for me that nutrition is much more important than what I do in the gym.
                              bloodorchid is always right

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                              • #45
                                If the market collapses, I'm SOL (as an individual investor who doesn't get bailouts). If my house burns down, I collect money.

                                M.

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