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Nobody can know the future and we can be optimistic and do our best, or lament the lost opportunities of the past that we don't have. Yet I'm sure there are opportunities of today that I didn't have, either.
Regarding housing - who says buying a home is a good idea, anyway? I believe that statistically over time, housing has more or less kept up with inflation, while the stock market has done far better. There are plenty of people who bought homes in the wrong years that took a long time to make any money from that if they ever did.
Fin, I know we've had similar discussions for many years on these forums - I'm not going to change your mind and you aren't going to change mine. What I do know is that people born into this country are still much more fortunate than the bulk of the world's population. Their situations certainly aren't going to be identical to those in some gone-by time. A person can study and work hard and make the best decisions possible to help themselves - or not. Our society is full of people at both ends of the spectrum. But in this country, a significant number of the poor are obese. That would be unfathomable in many much more underprivileged locations around the world. It is all relative.
Many who have too much influence in the economy say housing is good. The FIRE industry almost sunk the ship not too long ago, and they still have control. Unreasonably low down payments, interest deductions, offshore money, endless subsidies, one can go on and on. Maybe it should end. A couple lucky (not to be confused with smart) generations fared much better in housing than others, and they should admit it. It's not going to be repeated. But moving away from the dream might be un-American.
Regarding discussions and not changing minds, who responded to who most recently? They should be thankful we babble - as the markets themselves eventually run out of discussion, as they are a manipulated roulette wheel where you just hang on and ride. Regarding that, the recent run up made my modest (relative to everyone here I am sure) holdings hit a "milestone" per the automated analysis service I signed up for that sends me an email each week, so all hope isn't lost.
I also don't think a direct comparison with other regions of the planet is apples-to-apples, or is realistic. Maybe just a reason for feeling thankful. Although some have the dumb dream, this isn't an open border everything equal world yet, and everything isn't the same. Such comparisons are diminished expectations, and are as negative as anything else you dislike. If only study and hard work did it all, without other factors doing more. Regarding the spectrum, it is tilted in a manner that resembles the times of Gatsby or the Belle Epoque more now than in generations. Obesity is a red herring, unhealthy food is cheap, the poor don't receive education on healthy living, etc etc etc - not the same as a lack of food. It's another third vs first world comparison too. When the US starts saying "we're better than Somalia, so things aren't bad", all hope is lost. It's all relative to a point.
By the way, when we built our home in Des Moines in 1981 our mortgage rate was a mind boggling 15.3%. We refinanced at 11% a year or two later. But I could not stand it and we paid the whole thing off by around 1986.
I re-financed a couple years later for 7.5% which was a screaming deal, relatively.
Moved to Oregon in 1993, paid this place off about 6 years ago.
Feels good, doesn't it?
It is nice to see some posts here for a change. I agree with you tiong. Each generation has its ups and downs. I remember signing for a 10% mortgage in 1980, and I was glad to get it. Some mortgage rates went to almost 20%. But it is what it is. You just deal with it.
Congrats cyclone. I have heard parts of your story, and what you and your family had to go through is just unbelievable. I will try to catch your interview if possible.
I worked 16 years for the phone company before I could afford to buy a home. That was 1977. I bought a nice farm and within 3 years the economy was so bad for farmers, I had to head back to Alaska to my old job. During the 3 years from 77-80 we also built 3 homes and bought two and remodeled. That was a near disaster as well because of the interest rates. 21% for contractors interim financing. And the local banks were real tough to deal with on home buying, 15% the going rate. We had to find buyers with 50% cash to sell those homes we built. As tough as financing can be right today, it is far better than the late 1970s and early 80s. I think someone mentioned one of the main reasons housing prices are so bad in certain areas is the local governments are not allowing expansion. I know that is a big issue in San Diego. Near impossible to find a building lot and get all the permits before you have $400k plus cash into the project. The only building going on around here are Federally financed apartments for Section8 welfare. 20 years they will all be slums.
A friend in my town is a contractor, told me that to build an 1800 sq. ft. 3/2 around here is approx. 30K in permits, and can take 6-12 months to get approved.
Not very conducive to growing the economy...
I'm in a "high cost" area and permits are typically 1% of the project estimate for the GC, the plumber and the electrician. For commercial projects of $3 million +, the town adds a plan review charge of .12% on top of the permit fee.
My friend was talking about city fees, sewer hookups, etc.
Not sure what the county fees would be(Lane county), but the city fees sounded ridiculous.
Stever, what's the story on the emotorcons?
Connecting to water and utilities are a whole different thing. I live in a town with very little open land and any new residential construction is usually tear downs so the water, sewer, gas and electric are all there. If a new house is built, then they do have to pay street opening fees, sewer connection fees, et al. The gas and electric companies also charge for new service.
Hi Gary, thanks for the comments.
I guess we must have practically sat on our Grecian couches and ate grapes to get where we are today! So many "know" how much easier we had it... even those who weren't there to experience it. I appreciate all of your decades of hard work and I hope my family and friends appreciate mine, too. CEOs make be raking in the millions but I'm certainly not one of those.
The market - where does it go? I went through my play the market phase in the 90's; today I just hold a variety of mostly index mutual funds and rebalance as necessary to maintain asset allocation. It's going to be what it's going to be and few can guess with any reliability where things will go.
I certainly hope my kids aren't the types who spend wildly on high-end cars and go on trips all over the place while not planning for their future. Thankfully they both seem to be willing to save and be frugal as necessary. In general they certainly don't have to work as hard as I did back then.
It's funny that one can enjoy life a little and save at the same time, if they don't make other life choices. Think about it. Nice passive aggressive line there, funny. You'd fit in very well in this area.
Did those kids get a free ride from mommy and daddy, then for grad might get a car and eventual down on a house, etc, all while building it themselves? Good for them.
Google the "old economy Steve" meme, it fits some people here
2013 LX 570 2016 LS 460
My modern car isn't the fanciest nor a huge expense, and my other car I bought when I was 18 (and is still in "ran when parked" status, due to a hiccup). I'm not a high roller
Everyone knows you are a high roller if you drive a Mercedes.
Then some people would rather wear out 3 CamCords over 20 years than spend the money on one solid luxury car. I am with you, I have gone cheap and expensive and find spending a little more pays off in so many ways.
2013 LX 570 2016 LS 460
If he plays his cards right, he could be set for life. Yep, these kids have it tough !!
2013 LX 570 2016 LS 460
Tell your neighbor's kid to forget the new car and put some money away. It sounds like he is taking on an entry level programming job and will be taking advantage of a tuition reimbursement plan. If he isn't committed, he won't finish school because he will be too busy spending what he thinks is big money.
I have a friend whose daughter worked as a programmer at large dot com based in Seattle during her summers. Her pay was close to six figures a year and they paid her living expenses. When she graduated with her BS, they offered her mid six figures and she turned it down to pursue her PhD. She will probably be able to command over $200K to start at any number of tech or consulting firms when she finishes.
Didn't you just buy your wife some enormous 100K Lexus SUV that should require a special license endorsement? I'm the high roller? :P
Nothing wrong with receiving help - we've all had some in one form or another. But many who really luck out act like they are the second coming of Horatio Alger who built Rome in a day with a hand tied behind their back. Something something build that
Some people see cars as an appliance, and that's fine - they can blow money at the casino or on electronics or kids. Nothing wrong with a little fun now and then, if you run in the black. Hearses don't have luggage racks
The kid next door is your typical nerd type. I hope he will be able to develop the corporate survival skills that will enable him to rise through the ranks, etc. His dad has done very well, so the bloodlines are there.
2013 LX 570 2016 LS 460
of a pauper's box.
2014 Malibu 2LT, 2015 Cruze 2LT,
With any luck, the kid will have a brilliant idea, develop it, sell it, and not have to deal with the corporate grind. That grind can be overrated.
2013 LX 570 2016 LS 460
Just as I am thankful that I didn't lose it all in 08, and that the markets don't seem to be dying off anytime soon.
2013 LX 570 2016 LS 460
http://www.usatoday.com/story/money/markets/2014/12/27/timeless-advice-from-the-sage-of-wall-street/20870987/
Which way will it go from here?
I have given up guessing. I took most of my money out of stocks in 2012, and we all know what a mistake that was. I did put a lot into real estate projects that may yet give me a decent return. I need to dig out the old dart board.
First-quarter revenues at the company, now valued at $650bn by investors, grew 30 per cent year-on-year to $74.6bn. Earnings increased by 48 per cent to $3.06, well ahead of analysts’ estimates. “For a company of our size that is not a small feat,” said Luca Maestri, chief financial officer.
Apple’s cash position at the end of the quarter stood at $142bn, net of debt. That is almost $23bn up on three months earlier, with 89 per cent of its cash now held outside the US.
http://www.ft.com/intl/cms/s/0/b3bb354a-a666-11e4-89e5-00144feab7de.html#axzz3Q5Jg9rfC
I still have shares that I bought in 2005; they are up around 12x. I sold quite a bit of them a few years ago and now wish I had kept it all. Oh well, hindsight is 20/20. Going to hang onto the existing shares indefinitely since the current dividend is over 2%, which is over 20% of my original investment, per year, returned to me!
Is there any concern regarding 85Billion being printed every month, diluting the buying power of the dollar?
Is this why the market is so high?
I figure that major trouble is probably approaching.
Of course there will be a downturn sometime, markets are cyclical, we all know that. Crash and rebuild, crash and rebuild. Don't look for timing or logic, just let it ride and enjoy real life.
http://moneymorning.com/2015/04/08/is-google-buying-twitter-twtr/
I see market going marginally higher for Q2. I see GOOG making a big acquisition soon.
As far as the earnings report is concerned, I strongly believe it will be another blowout report. China, China, and more China plus the rest of the world. Analysts have been totally underestimating China's impact on Apple products. Analysts are also now underestimating the importance of the Apple Watch. It will be much more significant to Apple's bottom line than these idiots are stating. Are any of you guys buying the Apple Watch? I am, but going for the sport model with the larger screen. I think this product will be neat to have along with the iPhone. As always, there are a few bugs to be worked out on this first iteration. The second one should truly be awesome. My thinking is that if I don't spend a lot of money on this first one, I will also purchase the next iteration.
What about Apple Pay? Do you folks that own the iPhone 6 use it? I use it all the time wherever it is allowable. It is so easy and secure. This will catch on like wild fire in the next couple years.
As far as the overall market is concerned, I remain quite bullish over the next year at least. Don't listen to these doom and gloom jerks that have been predicting doom and gloom continuously since the last major market collapse in 2008/09.