Inspired to go into debt?

[anatess2]

1 minute ago, JoCa said:

I tend to agree, you should have the ideal of staying in a place for a long period of time.  But more than that you need to have the flexibility to go where the jobs are! 

And given a recession, the best thing one can do is pick up and move (even if it is from the north end of town to the south end of town) to where the jobs are.  The people who are smart figure out real quick, "if I lose my job, I'm going to find a job and I'm going to go where that job is located!"  That's the part people don't think about.

And you can't have that flexibility with a mortgage hanging around your neck.

Errmm... job security is - how fast you can find a job after you lose it.  If your job is not secure - as in, you have to go far and wide to get another job - then you're gonna have to work that into your financial plan.  Recession or not.  That's the part people should be thinking about.

If you are in such dire straits that you end up not being able to pay your mortgage, paying your mortgage is the least of your worries.  You can always walk away from a mortgage.

[Guest]

1 hour ago, mdfxdb said:

This is the weirdest thread ever.....

OP manages to pay off a 6 figure home in a few years.  Good for him (passive brag?)

OP prays and gets confirmation that it is ok to go into debt.  God / spirit confirmed this is ok.  (passive brag?)

OP justifies the expenditure because he makes so much money and is so frugal. (passive brag?)  I find this interesting because a $200K mortgage for 15 yrs at 3.25% is about $1,400/mo at 26.4% of OP net income means OP is taking home $64,000 per year more or less.....Which means OP is living off of less than half of his take home if he is paying off his house in 5-7 years.   wow........what's for dinner top ramen? Spagetti o's?

OP then takes all of this info to an anonymous web- site asking if we think it is ok, even though he prayed about it and knows it's ok?

Weird.......

Yes, ramen and beans and rice.  Who would eat spaghetti - o's?  Those are more expensive anyway.

I believe you're making an assumption about his income.  You don't know the nature of his work.  Many people have a base income and then a supplemental income.  They make long term decisions (like the base mortgage payment) on the base income.  But then they have larger goals based on the supplemental income. 

I'm only assuming, of course.  But this is taken from hints that he gave and the fact that I have that kind of income, and I set my financial goals in that manner.

And back when I was making that kind of salary with that kind of payment, I only spent about $100/month on food.  We didn't feel like we were lacking anything.

Edited November 15, 2017 by Guest

[anatess2]

7 minutes ago, Carborendum said:

Yes, ramen and beans and rice.  Who would eat spaghetti - o's?  Those are more expensive anyway.

I believe you're making an assumption about his income.  You don't know the nature of his work.  Many people have a base income and then a supplemental income.  They make long term decisions (like the base mortgage payment) on the base income.  But then they have larger goals based on the supplemental income. 

I'm only assuming, of course.  But this is taken from hints that he gave and the fact that I have that kind of income, and I set my financial goals in that manner.

And back when I was making that kind of salary with that kind of payment, I only spent about $100/month on food.  We didn't feel like we were lacking anything.

I have 2 teenaged boys. and a cadre of pets  My grocery bill is 250 a WEEK.  It's like all my money goes to my kids' stomachs.

[JoCa]

13 minutes ago, anatess2 said:

You can always walk away from a mortgage.

And this right here is the problem and why we are headed for another bust.  This attitude is too prevalent.  Hey not my money anyways . .. who cares that I signed the document saying I'd pay them back, I'll just walk away from it.

You have cognitive dissonance.  You want a home but are perfectly willing to walk away from it.

I'll buy a house for whatever the price I can get for it just so I can "own a home" (which you really don't-if you have a mortgage you are renting from the bank) and if I get into trouble I'll just "walk away from it". 

Bingo.  All the things you decry about stability making a "home" . . .it all goes poof with this attitude.

Edited November 15, 2017 by JoCa

[JoCa]

1 hour ago, mdfxdb said:

 I find this interesting because a $200K mortgage for 15 yrs at 3.25% is about $1,400/mo at 26.4% of OP net income means OP is taking home $64,000 per year more or less.....Which means OP is living off of less than half of his take home if he is paying off his house in 5-7 years.   wow........what's for dinner top ramen? Spagetti o's?

OP then takes all of this info to an anonymous web- site asking if we think it is ok, even though he prayed about it and knows it's ok?

Weird.......

Yeah, well some people (those who actually get ahead financially speaking) are very well attuned financially.  I save 50% of my income.  Some people get the financial system and the path to true financial prosperity in this life.  It requires a lot of hard work, a lot of sacrifice over a long period of time. You don't have to make 150k/year to be well off . . . in fact there are plenty of people who make 150k/year who live paycheck to paycheck. And I guarantee there are people who make 60k/year who after 30 years have more wealth than those who make 150k/year.

It's an attitude of financial discipline and knowing what you are getting into.  It's called minimizing your expenses, little to no debt, saving a significant portion of your income and then using those savings wisely (not trying to chase financial bubbles).

But unfortunately, most people are stupid when it comes to money . . . I wish that weren't the case, we'd be a lot better off as a society.

 

Edited November 15, 2017 by JoCa

[anatess2]

10 minutes ago, JoCa said:

And this right here is the problem and why we are headed for another bust.  This attitude is too prevalent.  Hey not my money anyways . .. who cares that I signed the document saying I'd pay them back, I'll just walk away from it.

You have cognitive dissonance.  You want a home but are perfectly willing to walk away from it.

I'll buy a house for whatever the price I can get for it just so I can "own a home" (which you really don't-if you have a mortgage you are renting from the bank) and if I get into trouble I'll just "walk away from it". 

Bingo.  All the things you decry about stability making a "home" . . .it all goes poof with this attitude.

Sigh.

You are not paying attention.  You are riding your hobby horse and cannot see.

I don't really care if you insult me and think I'm such a reprobate and have no honor.  But I hope you get off your horse long enough to see the damage you tried to do to my character just so you can continue riding your horse.

Edited November 15, 2017 by anatess2

[JoCa]

8 minutes ago, anatess2 said:

Sigh.

You are not paying attention.  You are riding your hobby horse and cannot see.

I don't really care if you insult me and think I'm such a reprobate and have no honor.  But I hope you get off your horse long enough to see the damage you tried to do to my character.

??? What??? Okay then.  I said you have cognitive dissonance . . .that is an insult? that means I think you are a reprobate and have no honor?

No, I'm pointing out the logical inconsistencies in your argument. Saying that I'm insulting you and saying you are a reprobate and have no honor is not an argument.

It is logically inconsistent to state:

 Recap STTE You: "I needed to buy a home so when you buy it doesn't matter, you buy a home for stability"

Recap STTE Me: "Well if you get into trouble you will lose the home"

Recap STTE You:"Yea well, if you lose your job, needing a home will be the least of your worries, you can always walk away from a mortgage"

Those two ideas are logically inconsistent.  Because actually if you lose your job, having a roof over your head is the best thing you need.  Food, shelter, clothing . . . .

Where did I insult you?  Where did I say you "have no honor" or are a "reprobrate". Please do not put words in my mouth. 

I love the reverse ad hominem straw man attack line, nice.  I've got to remember that one for logical fallacy attacks . . .

Edited November 15, 2017 by JoCa

[person0]

1 hour ago, mdfxdb said:

This is the weirdest thread ever.....

OP manages to pay off a 6 figure home in a few years.  Good for him (passive brag?)

OP prays and gets confirmation that it is ok to go into debt.  God / spirit confirmed this is ok.  (passive brag?)

OP justifies the expenditure because he makes so much money and is so frugal. (passive brag?)  I find this interesting because a $200K mortgage for 15 yrs at 3.25% is about $1,400/mo at 26.4% of OP net income means OP is taking home $64,000 per year more or less.....Which means OP is living off of less than half of his take home if he is paying off his house in 5-7 years.   wow........what's for dinner top ramen? Spagetti o's?

OP then takes all of this info to an anonymous web- site asking if we think it is ok, even though he prayed about it and knows it's ok?

Weird.......

I've been a fairly active member of this forum for most of this year.  I didn't just pop in one time for this thread.  What @zil said is correct; I was never looking for people to confirm or deny that this is a good or bad decision.  However, because I expected people to do that anyway, I included and responded with information that would defend and make it clear that our finances and lifestyle put us in a position to reasonably make this work without straining us.  That said. the finances are really not the point of the question, there are plenty of people in this forum who are just as or more frugal than me (see @Carborendum's savings on the Whopper!), and/or who have greater incomes than me (will keep them nameless), so I have no reason to boast, although I am extremely grateful to Heavenly Father for the blessings he has provided to my family.  I am just looking for other people's experiences where they have been inspired to do something against the norm and/or against the general guidance of the Church, and later were able to confirm that the inspiration was accurate.  I gave the example of Nephi earlier as it came to mind.

Either way, I do appreciate someone who would look at this with your perspective, although I would contend that this is definitely not the weirdest thread ever!

[person0]

41 minutes ago, JoCa said:

But unfortunately, most people are stupid when it comes to money . . . I wish that weren't the case, we'd be a lot better off as a society.

Amen!

[paracaidista508]

 

[anatess2]

 

9 hours ago, JoCa said:

??? What??? Okay then.  I said you have cognitive dissonance . . .that is an insult? that means I think you are a reprobate and have no honor?

Where did I insult you?  Where did I say you "have no honor" or are a "reprobrate". Please do not put words in my mouth. 

This:

9 hours ago, JoCa said:

I'll buy a house for whatever the price I can get for it just so I can "own a home" (which you really don't-if you have a mortgage you are renting from the bank) and if I get into trouble I'll just "walk away from it". 

Bingo.  All the things you decry about stability making a "home" . . .it all goes poof with this attitude.

That's a reprobate.  You read my post and think me of such low character that you think that's what I'm saying.

 

9 hours ago, JoCa said:

It is logically inconsistent to state:

 Recap STTE You: "I needed to buy a home so when you buy it doesn't matter, you buy a home for stability"

Recap STTE Me: "Well if you get into trouble you will lose the home"

Recap STTE You:"Yea well, if you lose your job, needing a home will be the least of your worries, you can always walk away from a mortgage"

Those two ideas are logically inconsistent.  Because actually if you lose your job, having a roof over your head is the best thing you need.  Food, shelter, clothing . . . .

I love the reverse ad hominem straw man attack line, nice.  I've got to remember that one for logical fallacy attacks . . .

I'm a programmer.  I eat logic for breakfast.  The 2 bolded statements above are a reduction of my entire contribution to this thread that has put my position completely out of context.  It tells me you are too focused on your hobby horse that you are not even hearing me.

And that's all I'm going to say about that.

 

[JohnsonJones]

16 hours ago, person0 said:

I've been a fairly active member of this forum for most of this year.  I didn't just pop in one time for this thread.  What @zil said is correct; I was never looking for people to confirm or deny that this is a good or bad decision.  However, because I expected people to do that anyway, I included and responded with information that would defend and make it clear that our finances and lifestyle put us in a position to reasonably make this work without straining us.  That said. the finances are really not the point of the question, there are plenty of people in this forum who are just as or more frugal than me (see @Carborendum's savings on the Whopper!), and/or who have greater incomes than me (will keep them nameless), so I have no reason to boast, although I am extremely grateful to Heavenly Father for the blessings he has provided to my family.  I am just looking for other people's experiences where they have been inspired to do something against the norm and/or against the general guidance of the Church, and later were able to confirm that the inspiration was accurate.  I gave the example of Nephi earlier as it came to mind.

Either way, I do appreciate someone who would look at this with your perspective, although I would contend that this is definitely not the weirdest thread ever!

Well, here's a link in that regard...

Gordon B. Hinkley tells us to get our house in order almost 20 years ago

It's a long talk, so only going to quote some small parts relavant to what you asked.

Quote

repeat, I hope we will never again see such a depression. But I am troubled by the huge consumer installment debt which hangs over the people of the nation, including our own people. In March 1997 that debt totaled $1.2 trillion, which represented a 7 percent increase over the previous year.

In December of 1997, 55 to 60 million households in the United States carried credit card balances. These balances averaged more than $7,000 and cost $1,000 per year in interest and fees. Consumer debt as a percentage of disposable income rose from 16.3 percent in 1993 to 19.3 percent in 1996.

Everyone knows that every dollar borrowed carries with it the penalty of paying interest. When money cannot be repaid, then bankruptcy follows. There were 1,350,118 bankruptcies in the United States last year. This represented a 50 percent increase from 1992. In the second quarter of this year, nearly 362,000 persons filed for bankruptcy, a record number for a three-month period.

However, you were asking specifically about a House.

Quote

I recognize that it may be necessary to borrow to get a home, of course. But let us buy a home that we can afford and thus ease the payments which will constantly hang over our heads without mercy or respite for as long as 30 years

So, obviously he okays us going in debt to buy a House.  In fact, you may be inspired to do so.  He even references one of the twelve that went into debt to buy a house...

Quote

What a wonderful feeling it is to be free of debt, to have a little money against a day of emergency put away where it can be retrieved when necessary.

President Faust would not tell you this himself. Perhaps I can tell it, and he can take it out on me afterward. He had a mortgage on his home drawing 4 percent interest. Many people would have told him he was foolish to pay off that mortgage when it carried so low a rate of interest. But the first opportunity he had to acquire some means, he and his wife determined they would pay off their mortgage. He has been free of debt since that day. That’s why he wears a smile on his face, and that’s why he whistles while he works.

Which sounds very much like what you did with your first house, and what I assume you will try to do with this new house.

So, there you go...hopefully that gives you the example you were looking for.

[JoCa]

8 hours ago, anatess2 said:

I'm a programmer.  I eat logic for breakfast.

Lol . . .you'd like to think so. I'll one up you.  So am I and a dang good one at that!!!

Edited November 16, 2017 by JoCa

[JoCa]

8 hours ago, anatess2 said:

T

9 hours ago, anatess2 said:

It tells me you are too focused on your hobby horse that you are not even hearing me.

 

Lol, look in the mirror.

[JoCa]

9 hours ago, paracaidista508 said:

 

What . . .wow.  What a total complete pack of lies.  Man people are stupid when it comes to money.  There are so many assumptions baked into this cake (and lies) . . .oh my goodness.

Financial idiocy.  This guy is just plain stupid and is just working to enslave people, very unfortunate so many people listen to snake-oil charmers.

[anatess2]

7 minutes ago, JoCa said:

Lol, look in the mirror.

I hear you just fine.  I simply don't think that your Wall Street savvy is that critical to home buying.  And homebuyers are not contributing to the recession just because they don't know a bear market from a bear rug.

Edited November 16, 2017 by anatess2

[JoCa]

3 minutes ago, anatess2 said:

I hear you just fine.  I simply don't think that your Wall Street savvy is that critical to home buying.  And homebuyers are not contributing to the recession just because they don't know a bear market from a bear rug.

Man . . .(now I am going to say it) you are being obtuse.  You obviously have 0 clue as to what happened in '08.  Recession happen b/c of leverage.  Banks lend out more capital than they should, people borrow more than they should, they stop making payments, they start defaulting, defaults on banks balance sheets go up, they start retracting credit, b/c people & companies are overleveraged they cut their expenses (i.e. layoff people), which causes more defaults, etc., etc. until the overleveraged bad debt is killed.

Oh my goodness . . . this is the credit business cycle . . .  

Recessions don't just "happen" it is a process that occurs b/c of leverage (i.e. debt).  And one of the largest sources of debt is homebuyers!  And yes they do contribute to a recession, b/c right now banks are giving loans to people who don't qualify!!! I know you think that doesn't happen due to '08, but yes it is happening right now. It is not as bad as '08 but it's not sound leveraging practice. 

You want to know how I know . . . b/c on "paper" I currently have 3 times my income in housing debt.  That is what a bank sees when they pull my credit report.  Now I have an interesting situation b/c I have business ventures paying that debt.  But not taking that income into account, I can currently as of right now, qualify for 6x my income in housing debt!  Six flipping times; there is no way I should be able to do that. 

I swear it's like the economy on auto-repeat.  This is very, very similar to '05-'06.  Even the responses are similar to '05-'06 . . . .

And that you are making it out like I'm insulting you and impugning your honor is just absolutely stupid.  I'm not and I haven't. 

[paracaidista508]

1 hour ago, JoCa said:

What . . .wow.  What a total complete pack of lies.  Man people are stupid when it comes to money.  There are so many assumptions baked into this cake (and lies) . . .oh my goodness.

Financial idiocy.  This guy is just plain stupid and is just working to enslave people, very unfortunate so many people listen to snake-oil charmers.

Do you mind listing which of the 11 reasons is a lie? Obviously I'm an idiot so I need it in black and white please.

I have followed a theory close to his and yes I have a long mortgage, but have also amassed enough in 401K and 457 money to pay cash for the home (after taxes and early withdrawal penalty) if things get that bad. Even with a 50 % market downturn I could make my house payment for at least 30 years. People end up with a home by paying early but miss out on market returns by investing in a dead asset. Disaster comes and they still don't  have enough only to fund their daily living expenses even without the house payment.

 

https://www.moneyunder30.com/why-your-house-is-not-an-investment

Edited November 16, 2017 by paracaidista508

[person0]

3 minutes ago, paracaidista508 said:

Do you mind listing which of the 11 reasons is a lie? Obviously I'm an idiot so I need it in black and white please.

I can tell you some:

• Assumption of the rate of investment returns.  There is a historical pattern, but never a guarantee.  Also, returns - taxes - broker fees may net you a much smaller return, and you have to pay broker fees regardless of gain or loss.
• Saving $0.35 on your taxes for every $1.00 in interest means you still lose $0.65 of every interest dollar.
• Just because a mortgage interest rate is low means you should have one as an investment vehicle for your other money - False!
• Payments only get 'easier' *if* your income rises, and if you aren't stupid with the rise in income and actually save it rather than spend it.  In reality there are too many unknowns.
• Paying Taxes and Insurance is the same as a mortgage payment - False!

[zil]

25 minutes ago, paracaidista508 said:

I have followed a theory close to his and yes I have a long mortgage, but have also amassed enough in 401K and 457 money to pay cash for the home (after taxes and early withdrawal penalty) if things get that bad. Even with a 50 % market downturn I could make my house payment for at least 30 years.

One does not need to ignore prophetic counsel in order to save or earn money and have sufficient for their own needs and generous offerings.  (Do it if you want, that's your business, but it's not necessary.)  If you need me to post details to demonstrate that statement, I can, but it feels like bragging and I don't like it (tried two different write ups and deleted them both).  It's enough to say my mortgage is paid off and I'm in a better situation than you describe.

[paracaidista508]

On ‎11‎/‎16‎/‎2017 at 8:13 AM, person0 said:

I can tell you some:

• Assumption of the rate of investment returns.  There is a historical pattern, but never a guarantee.  Also, returns - taxes - broker fees may net you a much smaller return, and you have to pay broker fees regardless of gain or loss
  • How is an assumption of a rate of return a lie? To guarantee a rate of return in equities would be a bit closer to a lie and illegal for a financial advisor to do-- at least so says the SEC. Assumptions are allowed to be made in order to illustrate to a client what the investment MAY do. In fact an advisor may be committing malpractice of sorts by not illustrating an assumption because they have not made the effort to ensure a client understands an investment. As for the fees etc- of course those have to be factored in. In regards to high fees, an investor has to use his own due diligence to determine if an investment is appropriate. If he does not do the research and relies on someone selling equities or other "investments" such as whole life ins, variable annuities, front end loaded funds with 12b1 and other fees etc, then he deserved the ripoff that will happen. Buyer beware.
• Saving $0.35 on your taxes for every $1.00 in interest means you still lose $0.65 of every interest dollar.
  • Uh yea he explained how that works. Not a lie and yes the dollar is gone. The loss is offset by the anticipated growth AND compounded growth over time to compensate for the realized loss of the interest dollar on the front end. The value of investments compounds.
• Just because a mortgage interest rate is low means you should have one as an investment vehicle for your other money - False!
  • Not false, it is an option and it has been proven over time to work. Just like paying off a home has worked over time for many people. What makes you sleep at night is what you should do.
• Payments only get 'easier' *if* your income rises, and if you aren't stupid with the rise in income and actually save it rather than spend it.  In reality there are too many unknowns.
  • Still not a lie. Inflation reduces the value of your dollar and with inflation wages and prices also generally rise. The concept is that the percentage of your paycheck going to the mortgage will be less and less over time. Just because there are people out there who are irresponsible with their money does not make his statement untrue. As for the *if.* If after 10-15 yrs in a job you still have not had a raise and have done nothing to find an increase in wages- you deserve to not have a raise.
• Paying Taxes and Insurance is the same as a mortgage payment - False!
  • His point is that your "house payment" never goes away even if you pay off your mortgage. The taxes are always there as is the homeowners and other hazard insurances. You knew that though. This is an important topic because some people actually think they are done and suddenly get a semi-annual notice from the county or state for property taxes due. In the case of my current home, that would be approx. $220 / month. Homeowners insurance is $60 I think so yea, i pay off my house I still have to pay about $280-300 per month.....and that goes up nearly every year too. That said, you are never done "paying for your home."

 

[paracaidista508]

On ‎11‎/‎16‎/‎2017 at 9:09 AM, zil said:

One does not need to ignore prophetic counsel in order to save or earn money and have sufficient for their own needs and generous offerings.  (Do it if you want, that's your business, but it's not necessary.)  If you need me to post details to demonstrate that statement, I can, but it feels like bragging and I don't like it (tried two different write ups and deleted them both).  It's enough to say my mortgage is paid off and I'm in a better situation than you describe.

 

I didn't say you need to ignore prophetic counsel in order to have sufficient ....etc... I presented this as an option and it does work. 

A few million lost their homes during the mortgage crisis as you know. I'm sure there were many who were paying their mortgages early so they could escape the debt earlier. Great concept, but if you lose your job and don't make the payment, the bank wont care how much you have paid down. In fact, the more equity you had the less likely they would work with you. If you can show me how the equity in your home is more valuable than being in your account while in the middle of an extended crisis AND you wont lose your home then I would conceded that the early payoff is a much wiser choice. Additionally, someone with a paid off home who doesn't pay their taxes anymore can have it seized and sold off in a state tax lien auction. Paid off or not, it can still be lost.

My situation- I'm not paying one red cent early. I will follow my mortgage contract to a t with one exception (early pay my mortgage ...possibly). Since I have an incurable illness and a significantly reduced life expectancy the fact I use Edelman's ( and have used it for a long time) concept has come to be a major benefit. I started all this waaay before I was diagnosed and it just worked out good just like good ole Ric Edelman says:

1- long mortgage,

2- I have a permanent pension that lasts as long as I live and also for my wife. At the death of the last person the pension goes away.

3- We have maxed out our 457 / 401K / IRAs for about 13 yrs now. Stayed in the market during the three crashes since 1999 and have been buying it on sale all the way up to about two years ago. Now it is just token purchases as my income is much less than when I was working.

4- Have a good size taxable brokerage account which at this time throws off almost a house payment every month in dividends. They are all blue chips with some very lucrative sin stocks to boot. I have had this account for over 20 yrs. All dividends have been reinvested to this date. When I reach the point where I cant pay the taxes on them, I'll take some as income.

5- Long term life policy which ends long after my expected life expectancy which is less than 10 yrs. Policy face amount is over 2x the amount we have mortgaged.

6- If my wife passes before me, her policy covers 100% of the mortgage amount, plus a six figure sum for whatever...rest home maybe.

7- We don't have debt on cars, credit cards or anything else other than the home

That being said, the life policies will pay off the home in the event of either one of our deaths. Since life insurance benefits are tax free, the money will be tax free to the mortgage and is in effect "cheaper money." Much better than paying 15% income tax on it just before putting it in my mortgage to save 3.5% interest as I would be doing by prepaying right now.

I have enough in savings, investments, taxable account income streams and pension to easily cover all of our expenses even with about a 50% market downturn. My investments alone will cover 10-15 years of all expenses if my pension disappears and we don't work. I structured it this way so that we would have income during tough times instead of having to do a reverse mortgage and/or a viatical settlement in order to cover expenses. Also that will keep the elders and priests from having to mow our lawns for the next 25 yrs or so. We can take care of it ourselves.

I think the prophetic advise in respects to debt is to keep people in general out of debt. Frankly most couldn't tell you what good, bad or advantageous debt is much less how to leverage it. It is much easier to address the issue so the least common denominator can understand the concept. Once you start waxing on about different strategies people check out. 

Bottom line is people need to know what they are doing. If they choose to be ignorant and not learn ways to make money then they need to just flat out pay everything off an not leverage their situation to their advantage. Problem is with many people is they don't save anything anyway. They can pay off their house and then spend as opposed to invest/save and in the end they are living only on soc sec and saving coke cans to make ends meet. 

Both paying off and leveraging work- and both situations require discipline.

I'm curious in your situation- how old were you when your mortgage was paid off and how long ago was that? I'm not even 50 yet. Most people who are that well off after paying off a home early in my experience have six figure incomes and have compounded for a while. I was in that situation, but now am just compounding my investments as my income is a third of what it was before I got sick.

As for ignoring prophetic advise- they have no problem cashing my tithing check paid for with my dirty money so I think we are ok.

[JoCa]

On 11/16/2017 at 10:00 AM, paracaidista508 said:

Do you mind listing which of the 11 reasons is a lie? Obviously I'm an idiot so I need it in black and white please.

I have followed a theory close to his and yes I have a long mortgage, but have also amassed enough in 401K and 457 money to pay cash for the home (after taxes and early withdrawal penalty) if things get that bad. Even with a 50 % market downturn I could make my house payment for at least 30 years. People end up with a home by paying early but miss out on market returns by investing in a dead asset. Disaster comes and they still don't  have enough only to fund their daily living expenses even without the house payment.

 

https://www.moneyunder30.com/why-your-house-is-not-an-investment

Because passive investing in the stock market is for fools-it violates the 1st rule of owning stocks: don't play with money you aren't afraid to lose! and the 2nd rule of owning stocks . . .know what you own!

You are the sucker that the big boys prey on. His advice is downright idiotic b/c he is assuming the future will be like the past (i.e. stock market returns will average 8%/year).  In fact it's the same lie that most pension funds have based their rates of return on (i.e. 8%/year stock returns). 

There is an extreme high level of risk that is associated with this advice that is just plain dumb for most people.  Yes that is great it has worked out for you . . .but I hate to break it to you that is b/c you have been lucky;it's not the strategy it's just dumb luck.

Because if you really study markets, you find out that what has happened over the last 25 years is actually really rare.  Markets can stay dead for a very, very long time.  Look at the Naz . . .all those suckers who bought in 98'98 had to wait 20+ years just to break even.  Same thing happened with the Japanese stock market.

The other thing is violates is that housing is not an investment . .. it's an expense and you minimize expenses. Yes if you lose you job you could lose your house . . . that's why you buy below your means and have at least 6 months of savings built up in cash.

The biggest flaw you have is that when you are fully invested in the market, everything is connected, stocks, recession, housing, etc.  So when it goes down and you lose your job and you need to pull money from stocks to live or make mortgage payments you are now selling at (what most likely will be a loss).  Stocks are all about timing.  

You've had great timing . . .awesome, but don't let it fool you into thinking this strategy is a winning long-term strategy; for some people it works, for most it totally sucks.  Oh and having a pension . . .bully for you, baby boomers were the last generation to really have pensions (unless you are a government employee).

You know it's funny . . .the crowing is all the stuff that happens at tops . . .it's actually quite hilarious.  More signs of a top:

CNBC: Profits don't matter for investors anymore, only whether a company can beat Netflix or Amazon.

GM CEO goes on CNBC says Tesla isn't making money and can't make money . . .gets laughed out of the room.

Lol you've got to be kidding me . . . these things only happen when you are close to a top.  Markets can stay irrational longer than you can stay solvent so it could keep going up for another 6 months . . .but we are very, very close.  Yield curve inverts and boom we are done-6 months.  Personally I'm getting ready in the next 6 months to deploy some capital.

I'll put my strategy against your strategy any day of the week.  Once you have a house paid for . . .welfare could cover tax payments!

[paracaidista508]

On ‎11‎/‎18‎/‎2017 at 5:31 PM, JoCa said:

Because passive investing in the stock market is for fools-it violates the 1st rule of owning stocks: don't play with money you aren't afraid to lose! and the 2nd rule of owning stocks . . .know what you own!

Actually passive investing routinely does very well- When we are not a certifiable expert like you that's what we do as it has been proven over time to be EFFECTIVE and profitable.

https://www.schwab.com/resource-center/insights/content/does-market-timing-work

Who said I was afraid of losing the money I have invested? and who says I don't know what I own? Maybe I do. 

You are the sucker that the big boys prey on. His advice is downright idiotic b/c he is assuming the future will be like the past (i.e. stock market returns will average 8%/year).  In fact it's the same lie that most pension funds have based their rates of return on (i.e. 8%/year stock returns). 

Yea his advice is so poor, he is one of the top financial advisors in the country. you don't get that way by losing everyone's money. The market average return has been approx 8% which btw is a reasonable assumption since nearly every annualized 20+ year investment period actually returned more than that. Invest for more than 20 yrs and compound and your growth is even better...at least it has turned out that way. 

There is an extreme high level of risk that is associated with this advice that is just plain dumb for most people.  Yes that is great it has worked out for you . . .but I hate to break it to you that is b/c you have been lucky;it's not the strategy it's just dumb luck.

Not dumb luck. I've been a buy/hold, dollar cost average , passive investor since 1992. I definitely have made way more than I contributed. All while dollar cost averaging the whole time.  

Because if you really study markets, you find out that what has happened over the last 25 years is actually really rare.  Markets can stay dead for a very, very long time.  Look at the Naz . . .all those suckers who bought in 98'98 had to wait 20+ years just to break even.  Same thing happened with the Japanese stock market.

Theres been 57 market corrections since 1928. Ive been invested during 5 of them, never pulled my money out. Stocks are on sale during a correction/crash. As for those who bought in 98...if they stayed invested and bought all the way down and all the way back up they have a lot of money now. It will go up/down/up/down ... Are you saying it wont?

The other thing is violates is that housing is not an investment . .. it's an expense and you minimize expenses. Yes if you lose you job you could lose your house . . . that's why you buy below your means and have at least 6 months of savings built up in cash.

So who said housing is an investment? Ric didn't and neither did I. Also who said I bought above my means? You have no idea when I bought my house, what I paid for it, how long I have left to pay for it, how much equity is in it or if it is paid off. You also have no idea what my debt to income ratio is. There is a possibility i may have purchased a house or two in a Self -Directed IRA after the housing crash, renting them out and not pre-paying a cent. Maybe...and now they are worth almost triple what I paid. You never know. All you know is not enough to judge my financial position.

The biggest flaw you have is that when you are fully invested in the market, everything is connected, stocks, recession, housing, etc.  So when it goes down and you lose your job and you need to pull money from stocks to live or make mortgage payments you are now selling at (what most likely will be a loss).  Stocks are all about timing.  

Who said I am fully invested in the market? You have no idea what I have in my portfolio other than the few blue chips I have mentioned. You  also have no idea if I have been rebalancing for the past decade skimming profits into cash. You know nothing about my portfolio.You don't make money in the market only with timing. That certainly helps, but a market timers are morons because they rarely win.

As for needing my stocks to live or make mortgage payments- that's why I have a dividend portfolio in a taxable account. Throws off enough to make a house payment every month. All I need to do is turn off the "reinvest" switch in the account. Doesn't reduce my position. Could the stocks stop paying dividends? I suppose. In the 09 crash and after they didn't. A couple froze the increases though IIRC. 

You've had great timing . . .awesome, but don't let it fool you into thinking this strategy is a winning long-term strategy; for some people it works, for most it totally sucks.  Oh and having a pension . . .bully for you, baby boomers were the last generation to really have pensions (unless you are a government employee).

Just because I have a pension doesn't invalidate my strategy. It should be considered a cash position when building an investment strategy. You can get one too btw. Police depts and the military are hiring and you can go earn one yourself.

You know it's funny . . .the crowing is all the stuff that happens at tops . . .it's actually quite hilarious.  More signs of a top:

I agree and I cant wait for another 2-3 corrections so my dividends can be reinvested at a discount. I still have at least 15 yrs before I will need my money so let it ride.

CNBC: Profits don't matter for investors anymore, only whether a company can beat Netflix or Amazon.

Yep flawed concept. I own AMZN (and BABA and JD.com), but they are a minor percentage of my portfolio. 

GM CEO goes on CNBC says Tesla isn't making money and can't make money . . .gets laughed out of the room.

I agree people are a little overboard with that one. I'll buy it if they ever make money and start producing cars near the rate they promise. Until then, I'm on the sideline. They have very high demand for the cars so we will see. Also- GM is a poor rep to go up there bad mouthing. The only reason they are still around is the bailout.

Lol you've got to be kidding me . . . these things only happen when you are close to a top.  Markets can stay irrational longer than you can stay solvent so it could keep going up for another 6 months . . .but we are very, very close.  Yield curve inverts and boom we are done-6 months.  Personally I'm getting ready in the next 6 months to deploy some capital.

Well since you are the omniscient expert in the room- please share with us the next big winner

I'll put my strategy against your strategy any day of the week.  Once you have a house paid for . . .welfare could cover tax payments!

Yea perhaps you make more profits than me in the market. Never said you didn't. I have more than sufficient for my needs and have no reason to compete- that's a stupid thing to say anyway. I did this on a cop salary so it works and doesnt take tons of money, just time and discipline. You have no idea what the market will do and neither does anyone else. If you did you would be on the list of world's richest people. Since you are on here waxing on about this I highly doubt it.

Bottom line- I find it priceless that you think you can effectively evaluate my portfolio with only a couple statements I have made. You know nothing about my situation, how much cash I have on hand, what I'm invested in, what I owe etc... passing judgement with no info. Sounds like you have been sucking on the glass pipe a bit before that post.

 

Edited November 22, 2017 by paracaidista508

[JoCa]

43 minutes ago, paracaidista508 said:

Not dumb luck. I've been a buy/hold, dollar cost average , passive investor since 1992. I definitely have made way more than I contributed. All while dollar cost averaging the whole time.  

As for those who bought in 98...if they stayed invested and bought all the way down and all the way back up they have a lot of money now

Sigh ... yes dumb luck. 92 right about the beginning of the greatest bull market in history . .. dumb luck. Had you start in '98 different story.  Go ahead why don't you go through a 20-year rolling time span and show me what the returns look like . . .I've done it and it really does depend on when you start and when you stop.  

I really don't feel like explaining basic simple math to you . . .when you start and when you stop are critical and many times factors outside your control dictate both. If you start investing in a down period (or at beginning of a bull market), if you don't need to pull money, if you hold through the down time.  Like I said, I really don't feel like explaining it b/c history bears out that you were lucky rather than smart.

Like I said, I really don't care about your portfolio-it's dumb advice, it really is.  You can not base a society based on this advice . . .it will lead to nothing but ruin.  

Having a house bought and paid for is the way to go; I really can't help you if you think otherwise . . . man this sucker needs to crash so people will realize the idiocy of this type of advice . . .but not until after I sell :-).

If you want to invest in stocks for the dividend, i.e. b/c the stock actually pays something that is one thing . . .but investing b/c you think you'll be able to sell it at a greater price down the road is just the "greater fool" theory.

Oh and you've participated in the greatest bull market in bonds in history . . . easy to refi when rates are going down over 20 years . . .not gonna be the case for much longer.

Edited November 22, 2017 by JoCa