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balducci Loyal user Canada 227 Posts |
Want to buy a house? Buffet says now is the time.
http://www.businessweek.com/news/2014-10......rt-rates "You would think that people would be lining up now to get mortgages to buy a home," Buffett said today at a conference hosted by Fortune magazine in Laguna Niguel, California. "It's a good way to go short the dollar, short interest rates. It is a no-brainer."
Make America Great Again! - Trump in 2020 ... "We're a capitalistic society. I go into business, I don't make it, I go bankrupt. They're not going to bail me out. I've been on welfare and food stamps. Did anyone help me? No." - Craig T. Nelson, actor.
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General_Magician Special user United States 707 Posts |
Well, I am not big on mortgages. But to answer Warren Buffet's question as to why people are not lining up to get mortgage, at least speaking for me personally, it's because what happenned last time demonstrated that mortgage loans are risky and houses are not true investments. But I don't want to beat a dead horse and go into a debate we have had already. Stocks are true investments given that it has a productive business backing it's underlying value. I am big on staying debt free, including staying away from mortgages as the only people who win are the banks. Not the homeowners. Maybe a few decades ago, it was a win/win situation for both homeowner and bank.
But not today. Since the banks have become deregulated and still are not properly regulated, it's simply too risky to take a mortgage loan unlike decades ago when the banks were better regulated. The safest bet is as always, simply stay out of debt and invest towards your goals without using debt. The banks are not held accountable and are not properly regulated and use their power to prevent themselves from being properly regulated and accepting any of their loans is just not safe. Since they can't be regulated properly because they are too big and powerful, then the only defense is not to take any of their loans. The reason why we had the financial crisis in the first place was because the banks were deregulated in the past and it was this deregulation that led to the financial collapse. It can still happen again today because like I said, the "reforms" have not been fully implemented and the banks are simply not properly regulated and I think there are a lot of people out there that are aware of this.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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LobowolfXXX Inner circle La Famiglia 1196 Posts |
Houses are better than stocks as an investment. Not only do the historically appreciate, you can live in them, too.
"Torture doesn't work" lol
Guess they forgot to tell Bill Buckley. "...as we reason and love, we are able to hope. And hope enables us to resist those things that would enslave us." |
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General_Magician Special user United States 707 Posts |
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On Oct 7, 2014, LobowolfXXX wrote: That's where I disagree with you. Stocks are better investments than houses. Houses are just wood needing constant maintenance and repairs. It's not productive or producing you wealth unless you own it in full and are renting it out. They certainly can be money pits. Sure a house can appreciate in price over the years as inflation goes up or their is mad speculation on the housing markets driving prices up, but it's still not producing you real wealth made from productivity like a business can. It does produce wealth if you outright own it without a loan and are renting it out to others though. It MIGHT produce you wealth if you have a loan on it and are renting it out to others, but it's also more risky to have a loan on it and renting it out and I can see where you can get over your head financially if you have a run of bad luck.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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Dannydoyle Eternal Order 21219 Posts |
OH my GOD here we go again.
Yes you are right. Houses are a stupid thing to buy. I can't imagine why anyone buys one for any reason. They are a stupid investment, they require more money than they are worth and Warren Buffet says never borrow money. Not only that but if you have to live in it you must actually maintain the stupid thing. What moron wants to buy one? Also I can rent and save money and that is a better deal. There guys I just saved us 12 pages of grief.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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magicfish Inner circle 7006 Posts |
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On Oct 7, 2014, LobowolfXXX wrote: Not according to Warren Buffet. |
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imgic Inner circle Moved back to Midwest to see 1337 Posts |
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On Oct 7, 2014, Dannydoyle wrote: Lol...made me spit out my iced tea...
"Imagination is more important than knowledge."
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
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On Oct 7, 2014, General_Magician wrote: Absolutely wrong! When a house appreciates it is as productive as a stock is when it appreciates at the same rate, and, historically, houses have appreciated at rates faster than stocks. Furthermore, if it's your primary residence, you're exempt from capital gains on, if memory serve, the first $500,000 in appreciation, an advantage that stocks don't have. There's no questions that houses require maintenance. So do the apartments that you rent. But to say that houses don't produce wealth is at best naïve; it's patently false. |
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
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On Oct 7, 2014, magicfish wrote: Warren Buffet says you can't live in houses!? Color me shocked. |
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General_Magician Special user United States 707 Posts |
My strategy is simple: to earn returns and compound my assets, not pay interest and compound my debt. The way to do that is to stay out of debt and save and invest money wisely. It works! Simplicity works.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
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On Oct 8, 2014, General_Magician wrote: No argument about your strategy. The argument's about the patently false statements you present to justify that strategy. |
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General_Magician Special user United States 707 Posts |
A mortgage is a loan, it's debt capable of blowing up in your face and ruining you financially for at least 7 years. Who knows? Maybe longer. If you stay out of ALL debt, work hard, save money and invest wisely, earn returns off your investments and compound your assets, you can't go wrong.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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magicfish Inner circle 7006 Posts |
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On Oct 8, 2014, S2000magician wrote: Im surprised, Bill. You're usually on the ball. No, According to Warren Buffet, (and Peter Lynch and Benjamin Graham, the stock market is a better investment. |
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magicfish Inner circle 7006 Posts |
Since its inception, including the depression, and all subsequent recessions and market crashes, the stock market has returned 11% per year.
Way way way better than real estate. |
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
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On Oct 8, 2014, General_Magician wrote: There's no guarantee you'll do this, unless you invest in risk-free investments, whose growth is paltry. None of this addresses the statement that started this discussion: your contention that a house doesn't produce wealth. |
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
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On Oct 8, 2014, magicfish wrote: Even when typical real estate leverage is factored in? |
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General_Magician Special user United States 707 Posts |
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On Oct 8, 2014, S2000magician wrote: I don't think it does. They certainly go up in price a lot because of either inflation or a combination of inflation and mad speculation on the housing market. But eventually it comes crashing down big time and all you are left with is just a house that produces nothing or provides no services but certainly requires a lot of services and money to keep up with repairs. About the only time I see a house as an investment is if is owned without debt and is being rented out and is producing rental income. That's about the only time I see a house as an investment. If you stay out of ALL debt, then that minimizes your risks which minimizing risk (it can't be eliminated) helps with wealth preservation. I think debt leveraging is risky and finanically dangerous and has the potential to backfire. So, to me, it's better to just not use debt at all, rather a good business plan to generate income and a good investment plan to generate returns and compound assets. None of which would require any sort of debt at all. Just hard work and smart planning.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
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On Oct 8, 2014, General_Magician wrote: Then you’re mistaken. Quote:
On Oct 8, 2014, General_Magician wrote: There are other reasons that the price of houses goes up. And don’t think that stock prices are immune to the effects of inflation and mad speculation. Quote:
On Oct 8, 2014, General_Magician wrote: You say this as if it were certain and unique to houses. It’s neither. Many people have lived their entire lives without the value of their house dropping, and you may recall that stocks came crashing down in 1929 and 2008, to give but two obvious examples. Quote:
On Oct 8, 2014, General_Magician wrote: A house most certainly provides a service: it provides its owner with a place to live. You pay for exactly that service with your rent payment every month. To say that a house provides no service is silly. Quote:
On Oct 8, 2014, General_Magician wrote: That you see it this way doesn’t make it so. Quote:
On Oct 8, 2014, General_Magician wrote: If you stay out of all debt you eliminate one risk (or category of risk, if you prefer); it does not necessarily minimize your risk. Quote:
On Oct 8, 2014, General_Magician wrote: But borrowing money can help with wealth accumulation. You seem to miss this point. Quote:
On Oct 8, 2014, General_Magician wrote: It is risky, just as investing in stocks is risky. Whether it’s financially dangerous depends on how you define financial danger. As for backfiring . . . well . . . that depends too on what you mean by backfiring, and whatever you mean, other financial strategies can have the same risk. Quote:
On Oct 8, 2014, General_Magician wrote: Planning to generate (positive) returns and compounding assets isn’t the same as actually generating returns and compounding assets. Investing in stocks and bonds does that sometimes, and sometimes it doesn’t. Investing in a house does that sometimes, and sometimes it doesn’t. You have to make your choice about which is better for you, but don’t think that buying a house is intrinsically more risky than paying rent and investing in stocks and bonds. It simply isn’t. Quote:
On Oct 8, 2014, General_Magician wrote: Not that having debt is intrinsically bad. Quote:
On Oct 8, 2014, General_Magician wrote: How’d that hard work and smart planning fare in 1929 and 2008? |
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landmark Inner circle within a triangle 5194 Posts |
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On Oct 7, 2014, LobowolfXXX wrote: Historically yes. But I'd be curious (though too lazy to look up right now) to know what the figures for appreciation are for over the last five years.
Click here to get Gerald Deutsch's Perverse Magic: The First Sixteen Years
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Dannydoyle Eternal Order 21219 Posts |
Why cherry pick 5 years? I pick 5 years of the depression for stocks.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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