Your paycheck is now worth 3.1 percent less than last year

#29
#29
Orangeslice13 said:
Each president outspends the last.
We have not had a balanced budget since Bill Clinton
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Balanced in what sense? Having some debt is a good thing. Inflation is telling us we're in the "too much" zone right now, but we have a big economy it makes sense to have some debt in the same way it makes sense to take out a loan to buy a house.

Of course this whole thing is kind of long term win for the conservatives because it will undermine social security, which I think is what's really going on.
 
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#30
#30
jvol1 said:
Balanced in what sense? Having some debt is a good thing. Inflation is telling us we're in the "too much" zone right now, but we have a big economy it makes sense to have some debt in the same way it makes sense to take out a loan to buy a house.

Of course this whole thing is kind of long term win for the conservatives because it will undermine social security, which I think is what's really going on.
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I'm gonna play devil's advocate here for a moment. Can you tell me why taking out a loan to buy a house makes sense? Not being confrontational, I am just wanting to look at a different perspective for a moment.
 
#31
#31
SpaceCoastVol said:
I'm gonna play devil's advocate here for a moment. Can you tell me why taking out a loan to buy a house makes sense? Not being confrontational, I am just wanting to look at a different perspective for a moment.
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Because only a tiny percentage of the population can be homeowners and possess equity without it.
 
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#32
#32
jvol1 said:
Balanced in what sense? Having some debt is a good thing. Inflation is telling us we're in the "too much" zone right now, but we have a big economy it makes sense to have some debt in the same way it makes sense to take out a loan to buy a house.

Of course this whole thing is kind of long term win for the conservatives because it will undermine social security, which I think is what's really going on.
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We've gone far beyond reasonable debt, it's just funny money right now.

How is undermining SS a win for conservatives?
 
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#33
#33
SpaceCoastVol said:
I'm gonna play devil's advocate here for a moment. Can you tell me why taking out a loan to buy a house makes sense? Not being confrontational, I am just wanting to look at a different perspective for a moment.
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Real Estate generally appreciates.
 
#38
#38
SpaceCoastVol said:
You have to sell to realize he gain, and then the .gov takes some of it.
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With low interests rates it makes sense to borrow when buying a house even if you have the cash to purchase outright. At 2.75-3% interest a decently smart person can take a 2-3 hundred grand and make more off of that through investments than the interest costs on a 15 year mortgage.
 
#39
#39
I'm not saying it is a bad thing, I am not sure it is the great investment it is made out to be. By the time you pay all the interest on a long term loan.. especially in the coming inflation storm... you have to see a pretty significant appreciation in order to realize a good percentage annualized increase.

And a fwiw... my house is paid off (made the wife happy but not necessarily me), so I have a bunch of money tied up in 'equity' that will only realize a profit when I sell. So in a way, it really isn't doing me much good at the moment.
 
#40
#40
SpaceCoastVol said:
I'm not saying it is a bad thing, I am not sure it is the great investment it is made out to be. By the time you pay all the interest on a long term loan.. especially in the coming inflation storm... you have to see a pretty significant appreciation in order to realize a good percentage annualized increase.

And a fwiw... my house is paid off (made the wife happy but not necessarily me), so I have a bunch of money tied up in 'equity' that will only realize a profit when I sell. So in a way, it really isn't doing me much good at the moment.
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Rent payments get you nothing and we all have to have a place to live.
 
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#41
#41
hog88 said:
With low interests rates it makes sense to borrow when buying a house even if you have the cash to purchase outright. At 2.75-3% interest a decently smart person can take a 2-3 hundred grand and make more off of that through investments than the interest costs on a 15 year mortgage.
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True. For now.
 
#42
#42
SpaceCoastVol said:
I'm not saying it is a bad thing, I am not sure it is the great investment it is made out to be. By the time you pay all the interest on a long term loan.. especially in the coming inflation storm... you have to see a pretty significant appreciation in order to realize a good percentage annualized increase.

And a fwiw... my house is paid off (made the wife happy but not necessarily me), so I have a bunch of money tied up in 'equity' that will only realize a profit when I sell. So in a way, it really isn't doing me much good at the moment.
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Are you specifically discussing a primary residence?
 
#46
#46
SpaceCoastVol said:
I'm not saying it is a bad thing, I am not sure it is the great investment it is made out to be. By the time you pay all the interest on a long term loan.. especially in the coming inflation storm... you have to see a pretty significant appreciation in order to realize a good percentage annualized increase.

And a fwiw... my house is paid off (made the wife happy but not necessarily me), so I have a bunch of money tied up in 'equity' that will only realize a profit when I sell. So in a way, it really isn't doing me much good at the moment.
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I didnt really view my home purchase as an investment for the sake of investing per se.

It is a place to raise a family. A place to call mine. It just so happens that it appreciates because I purchased wisely. And you're right, I'll never really see the cash out part of it, but my kids can. And there is something to be said for that.
 
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#47
#47
DinkinFlicka said:
Because only a tiny percentage of the population can be homeowners and possess equity without it.
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Not really. Only a tiny percentage can afford keeping up with the Jones's.

Most people just know no other way than to live beyond their means. That doesnt make the system wrong. It makes people dumb, willing victims.
 
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#48
#48
SpaceCoastVol said:
yes. Not rental properties. That is a whole different thing
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I think it is a smart move to borrow if needed to purchase a residence. Assuming the home is in an area with historic appreciation, the loan is structured properly, and you will reside in the home for enough time. Residences are unique in that many people get to deduct their interest rate off their taxes, the asset is insurable against loss, and a couple can sell for up to $500,000 without incurring cap gains taxes. Equity doesn't do you any good until you need it. In my mind, equity is like an emergency fund I can access via another lender or through a sale if/when I need it.
The last time I checked the stats, home ownership was the single asset which increased wealth more consistently than any other.
If you could fund a index fund with your mortgage payment over 20 or 30 years, you might do better. But you would still need a place to live.
 
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#50
#50
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