Steppenwolfe
Super Member
- Joined
- Apr 11, 2012
- Messages
- 6,489
- Location
- The Blue Ridge Mountains
- Tractor
- Kubota MX5400, 1140 RTV
Yep... and we get to a better America faster...^^ even better
Yep... and we get to a better America faster...^^ even better
"Lived through" and "experienced it as a mature individual" can be far different.I became a legal adult in 1979. I've lived through worse. So have most of you.
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This current retiree is looking seriously at refinancing quite a bit at the 2% rate my mortgage holder is offering.<snip>
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.
Yup, picked up the 3 bedroom house in town for $25K cash. But "rock bottom" rates were still around 3.5%, WAY higher than todays rates. Was cheaper than a storage unit. Or so I convinced my wife. We needed a storage area for our furniture. We really need to fix it up. Zillow now values it at over $100K.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.
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We bought our first house in 1985. Paid 3 points to get it down to 12.5%. Paid it off in less than 5 years. Bought 20 acres of vacant land. Paid that off in about 4 years. Bought our current house around 1994 and paid that off around 1995. Been debt free ever since. We both put 15% of our income into IRAs and 401Ks as soon as possible. So 30ish years of investing 15% of our income with both of us making average wages coupled with compound interest... we're not complaining. Our houses were modest and the market here has never been for much growth in home prices (this year excluded). We never considered our houses as investments, just a way to get our rent money back if we sold. The house we live in has not doubled in price since we bought it in 1994. The value of our house makes up less than 10% of our net worth. So I think of it this way. We could have bought expensive real estate and had less cash or we could have bought cheap real estate and had more cash, and still probably ended up with the same net worth in this area. HOWEVER, if the poop hits the fan, we'd have to sell an expensive house to access cash, whereas the situation we are in now (and have been in since we said "I Do") is that we would never have to sell our house to access cash, and can pay all of our bills on two people making minimum wage (probably even less, now)."Lived through" and "experienced it as a mature individual" can be far different.
When my children (born after'81') complain about high interest rates I remind them we fought to get a home loan at 12% in 1984 so they could grow up in the $114K house we've lived in since then. Now valued at about $650K.
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But the main thing is - did you have fun so far?We bought our first house in 1985. <snip>
I'm 60 (and thankful).
?!?!?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.
Heck yes!But the main thing is - did you have fun so far?
I think of life as a roller coaster ride, I enjoy the ups an downs, I just don't look forward to the end of the ride.
Mossy=a smart fellow!We bought our first house in 1985. Paid 3 points to get it down to 12.5%. Paid it off in less than 5 years. Bought 20 acres of vacant land. Paid that off in about 4 years. Bought our current house around 1994 and paid that off around 1995. Been debt free ever since. We both put 15% of our income into IRAs and 401Ks as soon as possible. So 30ish years of investing 15% of our income with both of us making average wages coupled with compound interest... we're not complaining. Our houses were modest and the market here has never been for much growth in home prices (this year excluded). We never considered our houses as investments, just a way to get our rent money back if we sold. The house we live in has not doubled in price since we bought it in 1994. The value of our house makes up less than 10% of our net worth. So I think of it this way. We could have bought expensive real estate and had less cash or we could have bought cheap real estate and had more cash, and still probably ended up with the same net worth in this area. HOWEVER, if the poop hits the fan, we'd have to sell an expensive house to access cash, whereas the situation we are in now (and have been in since we said "I Do") is that we would never have to sell our house to access cash, and can pay all of our bills on two people making minimum wage (probably even less, now).
I'm 60 (and thankful).