Retirement Planning - Lessons Learned

Thall303

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It's interesting that so many people think I "have money," when I live a pretty modest middle class existence. Any wealth I have accumulated will not long survive me, and is earmarked for elder care as my wife and I age. I guess it shouldn't surprise me, because fewer and fewer people will have the opportunity to live the lifestyle I did. I stayed away from "get rich quick" schemes because I had a grandfather who was always looking for the next best thing, and died a pauper. I stuck to "plan your work and work your plan." I won't go into details, but it was not always easy. I about starved to death in 1982, when there was no such thing as a social safety net for young men. A 13 foot $500 travel trailer kept me from being homeless. It's why I have no truck with people who badmouth the poor.

I'm also a student of history. I'm familiar with the horrible abuses of aristocracy. I know about the private armies killing miners and their families. I see the same thing coming in the United States, fueled by vast accumulations of wealth beyond any possible use. We're turning into a third world country controlled by the wealthy, while the ranks of the poor grow and grow.

I count myself lucky that my retirement will probably survive long enough for me to die. Some of you will not be that fortunate.
Don’t worry, I’m pretty certain you are not wealthy and certainly not very happy 😂
 

Larry Caldwell

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The reality is if you own a home you have money to many...

If you own a home and timber land, etc... well, you might as well be rich

My biggest expense in life are taxes of all shapes and sizes...

A rental property in WA takes 8 months rent to cover property tax and another for property management and another for insurance and it is vacant at the moment...

Expecting taxes to take a big leap next year...
The path to home ownership that I took is no longer available. We bought 93 acres of timber and pasture and a 22 year old 1700 sf. ranch style house in 1994, for $159,000. Property taxes were $1,000/year. The planning was that we would have it paid off by the time we retired, and the fact that there were no steps made it practical as we aged. Over the years, we used income fluctuations for home improvement, aimed at comfort and affordability rather than resale value. That was things like insulation, upgraded windows and doors, a heat pump, a deluxe kitchen, bath expansion and finishes, landscaping, a gazebo overlooking the creek, a shop building, deck repairs, a new roof, etc. It was very much "one piece at a time" home ownership. Next year the house will be 50 years old, and it incorporates most modern amenities and some that no one would expect, like a front projection home theater with a retractable projection screen and THX certified sound system. I logged 20 acres in 2013, cleared about $50k, and put it right back into the property, when contractors were eager to sharpen their pencils.

For several years, we were a two income family living on one income. My wife is not known for being frugal, so I stuck her with paying all the bills while I saved 90% of my income. She was a top executive while she was working. In 2009 she was named C of C Woman Of The Year. We're not talking NYC salaries, but we could live comfortably on her income alone. She got the bills, I got the savings. I also got the companionship of a dynamic and fascinating woman. Having a true life partner is a great pathway to success.

Property taxes are still just $2400/year. Oregon doesn't tax SS. I figured it out a couple years ago, and my total state tax bill is about 3.5% of my gross income. The feds are another issue, starting with taxing 85% of my SS.

Anybody today would have a tough time doing what we did. In 2004, just 10 years later, a co-worker paid $275k for 40 acres and a mobile. We thought about moving in 2006, but couldn't find any comparable property under $1 million. That's nice to know. If we ever need 24/7 nursing care, we can probably sell cheap and have enough cash to die in comfort. However, anyone starting out today would be servicing a much larger mortgage, in an environment where wages have not tripled or quadrupled like real estate prices. That would blow a huge hole in anybody's cash flow.
 

ultrarunner

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Amazing your property taxes are so reasonable on a million dollar property...
 
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Sigarms

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I'm also a student of history. I'm familiar with the horrible abuses of aristocracy. I know about the private armies killing miners and their families. I see the same thing coming in the United States, fueled by vast accumulations of wealth beyond any possible use. We're turning into a third world country controlled by the wealthy, while the ranks of the poor grow and grow.
I think your missing the trees looking at the forest.

Both sets of my grandparents came off the boat in the 1900's from Eastern Eruope and both grandfathers worked in the coal mines until their deaths from working in those coal mines.

Dad was one of 11, mom was one of 12. I have some aunts and uncles (slowly dying off) and some cousins who still live in the same area of coal towns and will probably never leave.

My dad enlisted in 1952, and got out around 1975. Never had a college degree, but after getting out in his 40's, he worked another job for 15 years, then two part time jobs just to keep himself busy until his late 70's. My father isn't a rich man money wise, but he saved when in the military, and saved when he got out and although he's not a millionaire, he will never want again in his life.

Funny thing, I always thought we were poor when my dad got out of the military because they always bought second hand cars, smaller house than most of my friends, and I never got really big expensive chirstmas gifts like my cousins at family Christmas's.

If I wanted to go to college, I was paying for it, they would help with the room and board. My excuse when my dad was pissed when I enlisted out of high school 🤣

It wasn't until later that I found out that my parents could probably afford whatever they wanted, but that's NOT the way they lived their lives.

When you live through the great depression as a kid and don't have a pot to piss in, guess being greatful for what you have really sticks with you and when you get money, you try to use it wisely.

My one cousin who always got the cars and motorcylces as a kid at Christmas time who I was envious of growing up, he got some cash when his dad died (mom had passed previously) plus his dads house. I believed my cousin basically pissed everything away and he lives in a trailer because that's all he can afford now (still remember when he got married, bought a new house and a harley, but that's all gone now along with the wife). Thing is, when I talk to him, he makes decisions that boggle my mind with his line of reasoning.

THIS is why our country is great. Yes, sometimes you are born with the wrong deck of cards and you don't do anything about it, but with hard work, saving, and some luck, you can do anything you want to do.

I can assure you I understand all about big coal and the coal wars, but in spite of that, I still had family that were able to better for themselves.

Right now, I've got two teenage sons, one who seems to get it about saving and being thrifty, and another who has to blow it all alway.

No different for retirement.
 
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Fuddy1952

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Dad & I were close, and before he passed in 2015 at 88 was the greatest thing he gave me was his wisdom, but never ever a dime.
I had to work for everything, clothes, college, car, then business with $145!
I had less than a two income experience since my wife was an employee!
She's a sweetheart. We have each other's best interest at heart 1/2 century and I hope lots more in future. Retired now over 8 years.
 

Larry Caldwell

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Larry, you gamed your non-frugal wife into paying for everything. I am impressed!
No games. She held up her part of the deal, and I held up mine. I did mention that she was a top executive. You bet we built spreadsheets and did budget projections to make sure we were being realistic.

Early this year the transmission went out on her car. I wrote the check for a new one - $4200. It's her money as much as mine. I wrote the check because I'm the family CFO. Her name is on every account. She could take the money and leave if she wants. I don't worry about it.

I read occasional stories saying most people can't handle a $500 emergency expense. That would make retirement very uncomfortable, because there are always unexpected expenses. A retirement needs:

1. Adequate cash flow to meet ongoing expenses (housing, food, utilities, taxes, insurance, transportation, clothing, entertainment)

2. Budgeted funds for lifestyle enhancements (travel, tools, art, charities)

3. Reserve funds for emergencies.

How anyone structures their retirement is up to them. My cash flow needs are minimal. Living here is almost free. Thanks to major insulation upgrades, our electric bill today is 70% of our 1994 electric bill even though we have built a shop, and that's our only utility bill. Heat is a wood stove, and we have more wood falling off of trees than we can burn. Not everybody can live in the country. If they have a 7500 sf. lot in the city and plan their retirement differently, that's none of my business. Thanks to galloping asset inflation, people have to downsize. People look at my assets and think I'm rich because they couldn't afford to buy what I have. Neither could I, if I were buying today.
 

MossRoad

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...

When you live through the great depression as a kid and don't have a pot to piss in, guess being greatful for what you have really sticks with you and when you get money, you try to use it wisely.

...
Same thing with both of my parents. My dad was born in 1919, so he was about 10 when the depression started. My mom was born in '27, so she was about 2. Both of them had great stories about how they and their families dealt with it. It showed in their examples to us growing up.
 

ultrarunner

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Would be nice if WA limited increases... one year it went up 80% using a crazy nearby sale as a comp...
 

Sigarms

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Same thing with both of my parents. My dad was born in 1919, so he was about 10 when the depression started. My mom was born in '27, so she was about 2. Both of them had great stories about how they and their families dealt with it. It showed in their examples to us growing up.
My father was the baby and my mother second to the last in her family. They were both around 10 by 1940, but with all their siblings, couldn't forget what the families went through. Then most of the boys of both families went off to war for our country.

Watched a movie last night called "The good lie". Although it was fictional, it was based off the plight of the "lost boys of Sudan".

Watching the movie reminded me how it seems that immigrants who come to our county who have nothing, actually realize what it means to work to be paid, work hard, and try to better yourself. Say what you will about immigrants today, but from my own peresonal experience, they seem to work just as hard as most "hardworking Americans" I know.

There is work out there, you just have to want to do it and show up on time, put your time in giving 100% and taking advantage of any breaks you get.
 

JethroB

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Brother, from what I can tell from your posts, you get it. I quit a high paying job to teach HS Economics in a school with 3/4 of families living below the poverty line. Today I showed them how to use a spreadsheet to put together a personal budget. You would think I invented fire.
When I was a senior in college I needed to take an elective to fill a gap so I took a class called Personal Finance (I was a Finance major). I have always thought that course should be required in every high school.
 
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Oaktree

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Watching the movie reminded me how it seems that immigrants who come to our county who have nothing, actually realize what it means to work to be paid, work hard, and try to better yourself. Say what you will about immigrants today, but from my own peresonal experience, they seem to work just as hard as most "hardworking Americans" I know.
Probably harder. It takes a lot of drive to leave everything that's familiar and start all over again in a new country. More likely than not, this translates into a very good work ethic.
 

arto98607

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I hope you all recognize the difference between legal and illegal immigrants?

The mainstream media and so many politicians are trying their best to fudge it the best they can...

:cry:
 

Sigarms

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I hope you all recognize the difference between legal and illegal immigrants?

The mainstream media and so many politicians are trying their best to fudge it the best they can...

:cry:
The only difference I really see between my grandparents (who came to ellis island) and illegal immigrants is that both sets of my grandparents HAD to take a boat to get to this country instead of being able to walk.

When you make peanuts and come to our country, and you're willing to break your back and work hard for what we as American Citizens see as "chump change" which we think people are idiots for to work for as no Americans would be "disgraced" as to taking a lower wage.

Not saying anything is right or wrong, just I can understand people making a better life for themselves.

Both of my grandfathers (who came legally) died working in the coal mines, living in a "company town" for peanuts as well just trying to provide for the family.

I can repsect anyone willing to work.

Funny enough a good friend is a local born and bred NC farmer. He feels the same way, and if I need some "local labor work", he always knows the guys who are available. Let's just say they don't look like Billy Bobs or Hanks LOL
 

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This will kill a retiree's retirement planning pretty quick if interest rates do not follow along...

E-xMC-VXEAI-3cM
 

newbury

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Right now it's looking like my CSRS COLA will be 5% to 6%.
/edit - Civil Service Retirement System, Cost of Living Allowance
 

MossRoad

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I became a legal adult in 1979. I've lived through worse. So have most of you.

877A8DE1-331A-4A8B-AEF2-417167C4F3B2.jpeg
 
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arto98607

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The only difference I really see between my grandparents (who came to ellis island) and illegal immigrants is that both sets of my grandparents HAD to take a boat to get to this country instead of being able to walk.

...............snip...............


It's only the difference between lawful and law breakers, no big deal!

Among the law breakers who enter illegally are some who have nothing to loose and will disregard any and all laws as they wish.

I mean as an example, no need for a car insurance if they have nothing to loose and what's another hit and run - no big deal eh?

And if they are caught it's really no big deal since we don't even know who they are or where they came from; they will be released soon anyway and go on and on.

😨
 

Fuddy1952

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It's only the difference between lawful and law breakers, no big deal!

Among the law breakers who enter illegally are some who have nothing to loose and will disregard any and all laws as they wish.

I mean as an example, no need for a car insurance if they have nothing to loose and what's another hit and run - no big deal eh?

And if they are caught it's really no big deal since we don't even know who they are or where they came from; they will be released soon anyway and go on and on.

^^^^^so true^^^^^
All my ancestors came over legally, one as an indentured servant a boy 12 years old.
Worked hard, started with nothing and became wealthy...many employees starting a foundry.
What does it say about a person's character who sneaks across a border...any border?
Just because I worked hard having a nice place doesn't give a trespasser rights to use my things or enjoy benefits of what I have.
This is apolitical...just simple facts.
 

Snobdds

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I became a legal adult in 1979. I've lived through worse. So have most of you.

View attachment 712741View attachment 712741
Here is the thing about the last bout with inflation, it actually caused the greatest accumulation of generational wealth in the history of the US.

When inflation was really bad in the 70's, the Fed at the time under Volcker raised interest rates very high to combat it. In Economics, there is a law that says interest rates and asset prices move in opposite directions. So high interest rates decrease asset prices and low interest rates cause high prices. We are seeing this now. At the time, baby boomers were coming into their prime earning years. They were able to purchase assets, we'll use houses as an example, at very low prices, but very high interest rates. As the effects of inflation subsided because of high interest rates, the Fed moved to lower interest rates. Those baby boomers were then able to refinance to a lower interest rate and most reinvested the equity against the principle. This lead them to pay off their low priced house very quickly. Then they found themselves with a paid off house and a lot of earning years left. So they bought 2nd homes, condos, timeshares, or upgraded to a bigger house. Baby boomers still have a lot of assets that are worth a ton of money today, thus the baby boomers might be the most wealthy generation the world has ever know.

Now my generation will never have that same opportunity to build generational wealth, simply because of low interest rates. Every asset is super high and with low interest rates, they will never be able to refinance to a lower rate and reinvest the equity.

From my stand point, I am cheering on inflation and hoping interest rates move up. This should cause asset prices to come down and later on down the road an opportunity to refiance to a lower rate to cash in on some interest equity. I know this sucks for current retirees', but you had you turn at the trough.
 

Steppenwolfe

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^^^^^so true^^^^^
All my ancestors came over legally, one as an indentured servant a boy 12 years old.
Worked hard, started with nothing and became wealthy...many employees starting a foundry.
What does it say about a person's character who sneaks across a border...any border?
Just because I worked hard having a nice place doesn't give a trespasser rights to use my things or enjoy benefits of what I have.
This is apolitical...just simple facts.
That is one of the best assessments regarding illegal immigration that I have read. Well done!
 

Steppenwolfe

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Here is the thing about the last bout with inflation, it actually caused the greatest accumulation of generational wealth in the history of the US.

When inflation was really bad in the 70's, the Fed at the time under Volcker raised interest rates very high to combat it. In Economics, there is a law that says interest rates and asset prices move in opposite directions. So high interest rates decrease asset prices and low interest rates cause high prices. We are seeing this now. At the time, baby boomers were coming into their prime earning years. They were able to purchase assets, we'll use houses as an example, at very low prices, but very high interest rates. As the effects of inflation subsided because of high interest rates, the Fed moved to lower interest rates. Those baby boomers were then able to refinance to a lower interest rate and most reinvested the equity against the principle. This lead them to pay off their low priced house very quickly. Then they found themselves with a paid off house and a lot of earning years left. So they bought 2nd homes, condos, timeshares, or upgraded to a bigger house. Baby boomers still have a lot of assets that are worth a ton of money today, thus the baby boomers might be the most wealthy generation the world has ever know.

Now my generation will never have that same opportunity to build generational wealth, simply because of low interest rates. Every asset is super high and with low interest rates, they will never be able to refinance to a lower rate and reinvest the equity.

From my stand point, I am cheering on inflation and hoping interest rates move up. This should cause asset prices to come down and later on down the road an opportunity to refiance to a lower rate to cash in on some interest equity. I know this sucks for current retirees', but you had you turn at the trough.
Who needs generational wealth? The 1/10 th of the 1% ???
 

MoKelly

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From my stand point, I am cheering on inflation and hoping interest rates move up. This should cause asset prices to come down and later on down the road an opportunity to refiance to a lower rate to cash in on some interest equity. I know this sucks for current retirees', but you had you turn at the trough.

You don’t need inflation to move very high. You need the Fed to stop it’s $120 billion per month bond buy back program. It is the single biggest factor keeping interest rates low.

It’s also a major reason stocks are so very high on a valuation basis.

As a fixed income investor, I’d like to see interest rates move up into the 4% range. So do many retirees who would like to get out of stocks into fixed income.

MoKelly
 

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Who needs generational wealth? The 1/10 th of the 1% ???
Don't be going all professor on me. What ever happened to him?> We could debate economics for days. I love it as he lived in the theoretical teaching world of economics and I live in the real life economics world. Two very different worlds that should have a lot of common ground, but as our debates showed...they is very little common ground.
 

Snobdds

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You don’t need inflation to move very high. You need the Fed to stop it’s $120 billion per month bond buy back program. It is the single biggest factor keeping interest rates low.

It’s also a major reason stocks are so very high on a valuation basis.

As a fixed income investor, I’d like to see interest rates move up into the 4% range. So do many retirees who would like to get out of stocks into fixed income.

MoKelly

If the fed stops the MBS bond buying, the housing market collapses. They will never be able to stop it fully. Meanwhile, the bubble gets bigger and bigger. But like I like to say...the best medicine for high prices, is high prices.

How did we ever get to a point where a huge segment of our economy is reliant upon a quasi government agency needing to buy loans that a normal market has no desire to own.
 

Steppenwolfe

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Don't be going all professor on me. What ever happened to him?> We could debate economics for days. I love it as he lived in the theoretical teaching world of economics and I live in the real life economics world. Two very different worlds that should have a lot of common ground, but as our debates showed...they is very little common ground.
Yep, I miss him as well; he was retired from Clemson and sure new Econ by the book... I think we all have our own view of economics; one that is determined by our assets, worth, and debt.
 

Steppenwolfe

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If the fed stops the MBS bond buying, the housing market collapses. They will never be able to stop it fully. Meanwhile, the bubble gets bigger and bigger. But like I like to say...the best medicine for high prices, is high prices.

How did we ever get to a point where a huge segment of our economy is reliant upon a quasi government agency needing to buy loans that a normal market has no desire to own.
We just put our home and land on the market... I'll let you know.
 

drssg

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As a fixed income investor, I’d like to see interest rates move up into the 4% range. So do many retirees who would like to get out of stocks into fixed income.

Have you looked into annuities? They can easily provide 4% guaranteed income or more.
 

RickB

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I'm looking hard at municipal bond funds. I have found a couple highly rated tax free funds having equal distribution yields as taxable funds with similar risk profiles. And without federal tax liability that seems attractive for our taxable brokerage account.
 

Snobdds

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I'm looking hard at municipal bond funds. I have found a couple highly rated tax free funds having equal distribution yields as taxable funds with similar risk profiles. And without federal tax liability that seems attractive for our taxable brokerage account.

Bond values and interest rates work in opposite directions. If interest rates go up, bond values will go down.

In today's world, there is no better place to put money than a low cost index fund.
 

Larry Caldwell

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Here is the thing about the last bout with inflation, it actually caused the greatest accumulation of generational wealth in the history of the US.

When inflation was really bad in the 70's, the Fed at the time under Volcker raised interest rates very high to combat it. In Economics, there is a law that says interest rates and asset prices move in opposite directions. So high interest rates decrease asset prices and low interest rates cause high prices. We are seeing this now. At the time, baby boomers were coming into their prime earning years. They were able to purchase assets, we'll use houses as an example, at very low prices, but very high interest rates. As the effects of inflation subsided because of high interest rates, the Fed moved to lower interest rates. Those baby boomers were then able to refinance to a lower interest rate and most reinvested the equity against the principle. This lead them to pay off their low priced house very quickly. Then they found themselves with a paid off house and a lot of earning years left. So they bought 2nd homes, condos, timeshares, or upgraded to a bigger house. Baby boomers still have a lot of assets that are worth a ton of money today, thus the baby boomers might be the most wealthy generation the world has ever know.

Now my generation will never have that same opportunity to build generational wealth, simply because of low interest rates. Every asset is super high and with low interest rates, they will never be able to refinance to a lower rate and reinvest the equity.

From my stand point, I am cheering on inflation and hoping interest rates move up. This should cause asset prices to come down and later on down the road an opportunity to refiance to a lower rate to cash in on some interest equity. I know this sucks for current retirees', but you had you turn at the trough.
You don't need inflation and high interest rates to make assets cheap, all you need is for the economy to take a dump. Just 10 years ago you could have picked up houses at half price mortgaged at rock bottom rates. I was telling anyone who would listen to buy a house on a 30 year fixed, because they would look like financial wizards ten years later. If your generation missed that opportunity, you must be really young. The next opportunity will be along soon. Save your shekels, situate yourself in a secure job, and cultivate a high credit score.

Volcker was in the '80s. I was a building contractor at the time, and he wiped me out. I learned the hard lesson that you can never trust the economy. The GenXers got rich in the '90s with the dotcom boom and a lot of them got wiped out. I warned a bunch of them that the bon temps don't roulez forever. I hope they listened. When 9/11 shut down the NYSE, you could pick up stocks at a 70% discount. Seven years later, you could buy a house for half price. Both of those opportunities happened during times of historically low interest rates.

While nobody knows when the next big crash will happen, it's a certainty that it will happen. There's a rule of thumb that the longer the financial gyrations stave off the downturn, the worse it will be. Signs are, the next crash will be horrifying. Position yourself right, and you will be able to pick up assets for a song.
 

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Don't be going all professor on me. What ever happened to him?> We could debate economics for days. I love it as he lived in the theoretical teaching world of economics and I live in the real life economics world. Two very different worlds that should have a lot of common ground, but as our debates showed...they is very little common ground.
I lived in both. 25+ years in banking and now I teach Economics. Professors who are in the theoretical and not tied to the real world are doing it wrong.
 

Snobdds

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Wyoming
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MF gc1710, Cat 305C
You don't need inflation and high interest rates to make assets cheap, all you need is for the economy to take a dump. Just 10 years ago you could have picked up houses at half price mortgaged at rock bottom rates. I was telling anyone who would listen to buy a house on a 30 year fixed, because they would look like financial wizards ten years later. If your generation missed that opportunity, you must be really young. The next opportunity will be along soon. Save your shekels, situate yourself in a secure job, and cultivate a high credit score.

Volcker was in the '80s. I was a building contractor at the time, and he wiped me out. I learned the hard lesson that you can never trust the economy. The GenXers got rich in the '90s with the dotcom boom and a lot of them got wiped out. I warned a bunch of them that the bon temps don't roulez forever. I hope they listened. When 9/11 shut down the NYSE, you could pick up stocks at a 70% discount. Seven years later, you could buy a house for half price. Both of those opportunities happened during times of historically low interest rates.

While nobody knows when the next big crash will happen, it's a certainty that it will happen. There's a rule of thumb that the longer the financial gyrations stave off the downturn, the worse it will be. Signs are, the next crash will be horrifying. Position yourself right, and you will be able to pick up assets for a song.

08 was an anomaly to the system and housing specifically as the financial world was mixing bad loans with good loans and pushing them off a Grade AAA investments. One can argue fraud, but because the credit rating agencies were backing the grading, it was hard to pin on anyone. You can't count on that happening again. You can count on long term economic principles holding up as I noted. A dead guy buying a place in 08 would look good today, and a lot of people that were liquid enough in cash made a lot of money.

Volcker was the one that raised interest rates, regardless of what specific year he did it in.

I don't know how the next downturn will play out. It might be a brief 10-20% drop before it goes back up again. Those expecting a massive price fall, might not ever see that come again.
 

Snobdds

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I lived in both. 25+ years in banking and now I teach Economics. Professors who are in the theoretical and not tied to the real world are doing it wrong.

Oh I told him...then he would hit me with some graph on theory.

Bless his heart.
 

Fuddy1952

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South Central Virginia
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1973 Economy and 2018 John Deere 3038E
Here is the thing about the last bout with inflation, it actually caused the greatest accumulation of generational wealth in the history of the US.

When inflation was really bad in the 70's, the Fed at the time under Volcker raised interest rates very high to combat it. In Economics, there is a law that says interest rates and asset prices move in opposite directions. So high interest rates decrease asset prices and low interest rates cause high prices. We are seeing this now. At the time, baby boomers were coming into their prime earning years. They were able to purchase assets, we'll use houses as an example, at very low prices, but very high interest rates. As the effects of inflation subsided because of high interest rates, the Fed moved to lower interest rates. Those baby boomers were then able to refinance to a lower interest rate and most reinvested the equity against the principle. This lead them to pay off their low priced house very quickly. Then they found themselves with a paid off house and a lot of earning years left. So they bought 2nd homes, condos, timeshares, or upgraded to a bigger house. Baby boomers still have a lot of assets that are worth a ton of money today, thus the baby boomers might be the most wealthy generation the world has ever know.

Now my generation will never have that same opportunity to build generational wealth, simply because of low interest rates. Every asset is super high and with low interest rates, they will never be able to refinance to a lower rate and reinvest the equity.

From my stand point, I am cheering on inflation and hoping interest rates move up. This should cause asset prices to come down and later on down the road an opportunity to refiance to a lower rate to cash in on some interest equity. I know this sucks for current retirees', but you had you turn at the trough.
I don't agree with this reasoning, and this is why. I'm sure you're familiar with inflation calculators. Here's one:


It's simple to use, simply enter the $ amount and year. It tells you in today's dollars what that equals. Now, when I bought my place in 1980 my 30 year mortgage rate was 14%. At that time I was making $3.50/hr. or $11.60/hr. today. I worked my behind off and paid mortgage off in 3 years.
I just now fooled around with the calculator a bit as well as looking at homes for sale in my area. First I compared what I paid back then to today, comparing similar home+land.
That was easy, and found similar ones for comparison.
Then I tried a different way. Knowing what my payments were then the inflation calculator showed me what that would be today. Taking THAT figure at today's low mortgage rates how much home could I buy for THAT dollar amount.
I was shocked beyond belief. With that same equivalent amount I was paying back then, today I could buy not twice but about three times the place I bought in 1980.
Granted, and this is beside the point, over the years I doubled size of home, had a large garage and horse stable built, bought land, etc.
The point is all things equal, employment opportunities are everywhere. Every business around here has help wanted signs. Right now wife & I are taking horse riding lessons. The instructor comes here, he's in his late 50s, yesterday he said his is a dying breed. Younger generation doesn't want to get in to doing that, so no one to carry on.
Baby boomers (I'm 69 and wife & I are) worked hard. Our parents and grandparents worked even harder (the Greatest Generation). Make no mistake...successful baby boomers had nothing handed to them and like our parents and grandparents worked hard for what we have.
 

Snobdds

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I don't agree with this reasoning, and this is why. I'm sure you're familiar with inflation calculators. Here's one:


It's simple to use, simply enter the $ amount and year. It tells you in today's dollars what that equals. Now, when I bought my place in 1980 my 30 year mortgage rate was 14%. At that time I was making $3.50/hr. or $11.60/hr. today. I worked my behind off and paid mortgage off in 3 years.
I just now fooled around with the calculator a bit as well as looking at homes for sale in my area. First I compared what I paid back then to today, comparing similar home+land.
That was easy, and found similar ones for comparison.
Then I tried a different way. Knowing what my payments were then the inflation calculator showed me what that would be today. Taking THAT figure at today's low mortgage rates how much home could I buy for THAT dollar amount.
I was shocked beyond belief. With that same equivalent amount I was paying back then, today I could buy not twice but about three times the place I bought in 1980.
Granted, and this is beside the point, over the years I doubled size of home, had a large garage and horse stable built, bought land, etc.
The point is all things equal, employment opportunities are everywhere. Every business around here has help wanted signs. Right now wife & I are taking horse riding lessons. The instructor comes here, he's in his late 50s, yesterday he said his is a dying breed. Younger generation doesn't want to get in to doing that, so no one to carry on.
Baby boomers (I'm 69 and wife & I are) worked hard. Our parents and grandparents worked even harder (the Greatest Generation). Make no mistake...successful baby boomers had nothing handed to them and like our parents and grandparents worked hard for what we have.

Trying to calculate nominal value at points in time is missing the point of interest rate movement and prices.

Don't try and outthink economic principles.
 

goeduck

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Kitsap, WA
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Watching the movie reminded me how it seems that immigrants who come to our county who have nothing, actually realize what it means to work to be paid, work hard, and try to better yourself. Say what you will about immigrants today, but from my own peresonal experience, they seem to work just as hard as most "hardworking Americans" I know.
Maybe a new concept would be for every immigrant we take in we emigrant a drug addict. That would improve things.
 

Sigarms

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Feb 15, 2005
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Mid north west in the state of N.C
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F3080
Talk about real life supply and demand...

You guys wouldn't believe what kind of long lasting effect that deep freeze in Houston has had in the HVAC industry with supply, demand and pricing.

Looking at flex manufacturing for new construction and commercial projects, and flex is hard to come by. Talked with one manufacturer, and where they once had 24 production lines running two shifts, now they're down to 11 lines running one shift a day because they're still waiting for the material to come in from Houston.

Never realized you need resin to manufacture flex duct, and the majority of that raw material came from Texas.

Been doing HVAC for close to 3 decades now, this is the first year I've seen 3 price increases from pretty much all the the HVAC manufacturers BEFORE the end of the summer of the year in question (and may have yet another before Winter). Major oil furnace manufacturer went up 22.5% in 3 months. Talking with mini split people, and now the issue is the docks in China and the price of shipping containers along with freight.

Sheet metal across the board probably around 45% up this year. PVC fittings, it's a question if you can get them, just like plastic pads.

I've never seen a year like this in my industry.

Starting to feel like I'm in the lumber market....
 

RickB

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Up the road from Dollar General WNC
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Just a Scag
Bond values and interest rates work in opposite directions. If interest rates go up, bond values will go down.

In today's world, there is no better place to put money than a low cost index fund.
That's a broad statement. Index funds are 'indexed' to a wide range of specific asset classes and markets and could be dependent on the ups and downs of whatever the fund is indexed to. Conventional wisdom links the term index fund to the S&P 500 which will skew the investor's dollars disproportionately towards the tech sector. Yes, I have that type of index fund, but far, far from exclusively. At this stage of my investment cycle I am equally interested in capital preservation as growth. Even if that were not true an S&P index lacks the true asset class diversity I require. My equity/fixed income tolerance is no more than 65%. The four taxable bond funds I hold in retirement accounts have outperformed any type of cash holding since day one and continue to do so. I believe a successful bond fund management team is key to successful bond investing.
Comparing an actively managed low cost bond fund to an investor watching a single bond purchase wither are two entirely different things.
10 and more years ago when I was in the accumulation phase I had exactly zero dollars in bonds of any type. Equities was king then. Now they share the stage.
 

Steppenwolfe

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Apr 11, 2012
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6,489
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The Blue Ridge Mountains
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Kubota MX5400, 1140 RTV
I don't agree with this reasoning, and this is why. I'm sure you're familiar with inflation calculators. Here's one:


It's simple to use, simply enter the $ amount and year. It tells you in today's dollars what that equals. Now, when I bought my place in 1980 my 30 year mortgage rate was 14%. At that time I was making $3.50/hr. or $11.60/hr. today. I worked my behind off and paid mortgage off in 3 years.
I just now fooled around with the calculator a bit as well as looking at homes for sale in my area. First I compared what I paid back then to today, comparing similar home+land.
That was easy, and found similar ones for comparison.
Then I tried a different way. Knowing what my payments were then the inflation calculator showed me what that would be today. Taking THAT figure at today's low mortgage rates how much home could I buy for THAT dollar amount.
I was shocked beyond belief. With that same equivalent amount I was paying back then, today I could buy not twice but about three times the place I bought in 1980.
Granted, and this is beside the point, over the years I doubled size of home, had a large garage and horse stable built, bought land, etc.
The point is all things equal, employment opportunities are everywhere. Every business around here has help wanted signs. Right now wife & I are taking horse riding lessons. The instructor comes here, he's in his late 50s, yesterday he said his is a dying breed. Younger generation doesn't want to get in to doing that, so no one to carry on.
Baby boomers (I'm 69 and wife & I are) worked hard. Our parents and grandparents worked even harder (the Greatest Generation). Make no mistake...successful baby boomers had nothing handed to them and like our parents and grandparents worked hard for what we have.
F'n A right on that...
 
 
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