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General_Magician Special user United States 707 Posts 
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On Oct 8, 2014, S2000magician wrote: Well, I don't want to get caught up in a long drawn out debate again. So, I will end with this post to answer your question. Stock prices here recently or at least for the indexes seem to have been going down, so the shares of my fund of index funds has been selling cheaper. My company turns a profit, so I can take a portion of my profits and make monthly investments in that fund of index funds. Given that here recently, the indexes have went down and I make monthly investments from my business profits, I have been buying them at cheaper prices. This happens because most in the index have been selling their shares of stock. But I don't think we should beat a dead horse. We all have your views on investment and money some of us have certain convictions about money and investment that don't seem are going to change. That doesn't mean we can't learn from each other, but I think we all have certain convictions that none of us are going to change either. I have no idea if the stock market is going to go down or up or if we are in a bubble. I just follow a simple strategy: invest monthly in a fund of index funds whose fees are cheap. It is my hope that over the long term I achieve an adequate return by doing so, no matter how well or poorly the stock market does. It's no guarantee have you, that I will generate a return, but the data suggests if I do this, there is a good chance I will over the long term while minimizing my investment costs. I'm also not looking for stellar returns either, but rather, adequate returns that increase my purchasing power over the long term. This is a simple way to achieve that without getting too bogged down in complicated investments or using debt leveraging which has a potential to backfire in a real bad way as it has for some people. If I am in a stock market bubble and it bursts, I have no idea where I will be. But I tell what I will do: keep buying shares in my fund of index funds every month for the then much cheaper prices after the bubble bursts. I might still have an overall return given that my fund of index funds pays dividends (not quarterly but twice a year, it turns out my fund of index funds pays a dividend twice a year) and that could offset any losses from a stock market bubble burst. I could still have a loss or I may still have an overall return. It's hard to say. You won't know until it happens. I don't have crystal ball and can't predict the future. All I can do is follow a simple and easy to understand strategy that gives me a good chance of getting an adequate return over the long term to achieve some of my financial goals I have set for myself (and my wife too but I discuss this with her as well).
"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: Well, there's the problem right there: y'all don't have my views on investment and money. If y'all did, these discussions would be a lot more productive. ;) |
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S2000magician Inner circle Yorba Linda, CA 3465 Posts
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On Oct 8, 2014, General_Magician wrote: You keep mentioning this potential for debt to backfire. I wish you wouild explain exactly what you mean by this. I say this because I strongly believe that the "backfiring" problem has nothing to do with debt per se; its cause is something else entirely. If you believe that debt backfires, I'd like to know exactly how. |
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General_Magician Special user United States 707 Posts
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On Oct 8, 2014, S2000magician wrote: Sorry about that. Grammar error on my part. Anyway, we've had this long discussion before. I don't want to have it again. Some things are more important than money. Like discussing the Art of Magic for example  .
"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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By the way, I did a simple calculation in Excel: if you put 20% down on a house, borrow the remaining 80% at 4% interest for 30 years, and the price of the house appreciates 5% per year (so not as fast as stocks), at the end of 30 years your investment has produced an internal rate of return (IRR) of 5.58%, ignoring the tax advantage of mortgage interest. If the annual appreciation is 6%, the IRR is 7.03%.
That's a pretty good return, and you get a place to live as well. |
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Dannydoyle Eternal Order 21245 Posts
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On Oct 8, 2014, S2000magician wrote: Why is it in these discussions it always seems we are discussing one point of view? He never even asks anything about your point of view, but rather simply wants to defend his and the only other choice is some bizarre configuration of events that is as bad as can possibly be.
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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Dannydoyle Eternal Order 21245 Posts
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On Oct 8, 2014, General_Magician wrote: One would ask then why you would participate in the thread at all, or have to engage all the time when someone posts?
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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Dannydoyle Eternal Order 21245 Posts
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On Oct 8, 2014, S2000magician wrote: Isn't that the point? You get a place to live as well? Which means that the rent you are paying which for arguments sake can be identical, is money you may as well throw out the window. Even IF there are upkeep costs to owning (My belief is eventually you pay those in renting as well.) that does not offset the advantages. Also something important is if you do not get an ARM you mortgage payment is flat. It does not change. Rent usually goes UP!
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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balducci Loyal user Canada 227 Posts
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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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mastermindreader 1949 - 2017 Seattle, WA 12586 Posts
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I agree with William that somethings ARE more important than money. I would say that having a fulfilling life is one of those things, and I'd say that owning your own home to live it in is another.
But this discussion is really pointless, William, because you've always maintained that there is no such thing as good debt. The is fact that no one here, nor any economist or successful entrepreneur that I can think of, agrees with you about that. I think Mick Dodge might agree with you though. He has no debt, doesn't own a home, doesn't care about money, and is quite happy with his life: http://www.thenewstribune.com/2014/01/07......ler.html In case you're interested, here's some very basic information about good debt vs. bad debt: http://www.bankrate.com/finance/debt/goo......t-1.aspx And there's plenty of land where he lives where you, too, can dwell happily without banks. |
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Payne Inner circle Seattle 4571 Posts
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On Oct 8, 2014, mastermindreader wrote: Owning a house for me is far more fulfilling than renting one. I can paint and wallpaper and decorate any way I want to in my house. Not so with a rental. In a rental one, at least in my experience, is generally stuck with boring white walls and bland carpeting. Most of the places I rented wouldn't even let you hang pictures as that might possibly damage the walls. You can't build custom shelving or hang vintage light fixtures or do anything of interest in a rental unit. Plus you live under the constant threat of having to move as the landlord won't renew your lease or decides he's going to double the rent on you for no reason.
"America's Foremost Satirical Magician" -- Jeff McBride.
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acesover Special user I believe I have 821 Posts
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General magician,
Please tell me how you can bet this. Put down let us say $60,000 and purchase a a rental property worth anywhere from $300,000 to $400,000 and by shopping one can do much better depending on the rental income as to what the property is really worth. Monthly payments to bank which includes taxes and insurance around $2500/350,000. This property has to yield in rental income of at least $5,000/month (you should be able to do much better). Now show me where you can do the same with stocks and control a 350,000 investment at TODAYS prices but only put down $50,000. In 30 years will have collected around $2,800,000 in rent and that is not raising rents in those 30 years. however that is at 100% occupancy. Lets base it on a more realistic figure of 80% occupancy which equates to around 1,440,000 in rental income. While I gave you the benefit of the doubt of 100% occupancy I did not take into consideration an increase in rents over those said 30 years which would definitely have gone up considerably. While this is a very simplistic explanation of rental wealth it should give you the general idea of what can be accomplished. Also in those 30 years you will have built up equity in your initial investment to have the leverage to purchase additional properties. But I am not going to get into that as I am only giving a simplistic approach here. Every month you pay on your loan you build equity, however it is small for the first number of years but at todays interest rates it does not take long to start to see gains inequity. There is obviously more involved but we are talking about what is a better deal stocks or rental property investments. To me there is no comparison and I truly feel property is much more secure...it is real not a sheet of paper.
If I were to agree with you. Then we would both be wrong. As of Apr 5, 2015 10:26 pm I have 880 posts. Used to have over 1,000
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Dannydoyle Eternal Order 21245 Posts
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Again facts and proof have no place in this discussion. Ideology and adherence to it is what maters.
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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balducci Loyal user Canada 227 Posts
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On Oct 8, 2014, acesover wrote: If you live in an area where that is possible, more power to you. That would be a sweet deal. Where I am, it would cost at least $200,000 to $400,000 to purchase a not very exciting (but perfectly liveable) older condo / rental suite and it would rent out for $2,500 at most. Having said that, I agree with your overall point. That purchasing reasonably priced real estate at today's low interest rates is generally a smart investment. Hey, even Warren Buffet agrees with us.
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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acesover Special user I believe I have 821 Posts
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On Oct 8, 2014, balducci wrote: I understand what you are saying. But maybe I did not make myself clear. Not necessarily limiting one to purchasing a property that is only one rental. It could be an apartment complex. It could be a building in which to house several offices or small retail shops. Not just limited to a family dwelling. But family units are great investments when purchased for multiple families not just a single family dwelling. Needless to say one can save themselves quite a bit of money if they are somewhat handy and can do some minor repairs and remodeling especially when starting out. It is not a prerequisite but as I said it can help. Such as painting, paneling, drywall etc. If not find a dependable contractor and treat him well. You can even some electrical work (but be careful there, I know from experience )
If I were to agree with you. Then we would both be wrong. As of Apr 5, 2015 10:26 pm I have 880 posts. Used to have over 1,000
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tommy Eternal Order Devil's Island 16543 Posts
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A lot of High Street slops have gone broke in England recently. In particular many clothing shops have closed, which has left the city here looking like a to-let forest as most are cloth shops there. Yet houses, they seem to be doing OK, which seems a bit odd.
If there is a single truth about Magic, it is that nothing on earth so efficiently evades it.
Tommy |
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S2000magician Inner circle Yorba Linda, CA 3465 Posts
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On Oct 8, 2014, tommy wrote: Freudian slop . . . um . . . slip? |
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funsway Inner circle old things in new ways - new things in old ways 9988 Posts
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Wow -- so much disinformation and false statements -- all on one thread.
Here is a real-life scenario to ponder. I found a seven acre parcel with woods, stream and a small house for$55,000. Since it was a fixer-upper a regular bank would not touch it as the appraised value on the house is too small. So, I borrow from a local bank at 6% for five years with $10,000 down. It takes $5,000 to fix it up. It will now appraiser for $78,000. I rent out the house for enough to cover mortgage, taxes, insurance, utilities and $100 per month for upkeep. I get full use of the land and stream for free plus depreciation on $78,000 and show a loss on my taxes. In three years I will refinance for enough to cover the mortgage plus get my $15,000 back and 12% interest on said money for the three years -- with the provisor that the 1/2 acre around the house is split off. I will then be able to sell the house and small parcel in the future if desired and keep the 61/2 acres on which to build another home. Meanwhile, I enjoy the property for camping, etc for free -- and get a $3000 write off on taxes ........... me -- as soon as I get my $15,000 back I am going to buy another house, showing the rental income as an increase in my net worth.
"the more one pretends at magic, the more awe and wonder will be found in real life." Arnold Furst
eBooks at https://www.lybrary.com/ken-muller-m-579928.html questions at ken@eversway.com |
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wwhokie1 Special user 512 Posts
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For home owners, their house is their biggest investment, but not the best investment. On average the stock market will out perform the return you get on your house. By the time you calculate taxes (which in some areas eat up most of your increase in value), maintenance costs (including plants, mowing etc), and time (homeowners invest a lot of time maintaining their property (mowing, raking leaves, planting flowers etc). The cost of painting, replacing carpet, replacing the roof, making repairs, these have to all be considered. Buying a house is not something someone should do because it will give a great return on the investment. They should do it because it is the lifestyle they want. Buying a house is a lifestyle choice. It consumes time, but some people want and enjoy that. You pay for that lifestyle. If that is the life you want, its worth the cost. Otherwise, it's not worth your time and money - just rent an apartment and spend your time doing something else. Personally, I own a home and have for over twenty years. The increase in value of home ownership has not covered all the cost I have mentioned. Twenty years of property taxes alone is a lot of money. My stock investments have outperformed my home. But for me home ownership is worth it.
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slowkneenuh Regular user After 5,278+ posts, only credited with 133 Posts
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That is why I have a condominium. I own it, it is an investment like home ownership, I leave the exterior maintenance, groundskeeping and upkeep to the condo association (and am willing to pay extra for it). It fits my lifestyle of frequent travel. It is also one of the fastest growing segments in the real estate market as the younger generation wants to spend time doing whatever their interests are rather than be a weekend slave to their home.
John
"A poor workman always blames his tools" |
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Posted: Oct 8, 2014 09:46 pm 
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