New Sailboat...not so fast.
- Thread starter kpgraci
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Sorta what happened to us, with similar losses, only we had cash equity we walked away from.
Then the guy who lived next door. He bought his house with cash for almost $400K and thought he stole it. Last I looked the tax appraised value was $139K.
Our son and his wife are currently $100K underwater from what they bought it for 7 years ago with a big down. They simply cannot sell it, and would have to walk away if they need to move.
Anyway, enjoy the boat I guess.
This is why I save up and pay cash for my boats, cars and kids college. We have less than six years to pay off our existing mortgage and then we'll pile up cash for a few years and put 100% down on the next one!
Why complain about banks, mortgages and insurance when you keep going back to get more loans? Unleash your greatest wealth building tool...your income and stop borrowing money. It's pretty simple really.
Like I said before, "you don't need no stinking drywall"! Do a wainscot 4' up the wall.
Why complain about banks, mortgages and insurance when you keep going back to get more loans? Unleash your greatest wealth building tool...your income and stop borrowing money. It's pretty simple really.
Like I said before, "you don't need no stinking drywall"! Do a wainscot 4' up the wall.
Well, there is that as well, I guess.
Ken, let me know if there's anything I can do to help.
The sad thing is that us who played by the rules and where fiscally conservative ended up paying for the bailout of those irresponsible risktakers. What is screwed up is our political system which breeds politicians that in exchange for votes will insure these risk takers get taken care of with our money. They are talking about GDP and financial ratios but not a pip about inflation. Everything seems to cost twice as much as they did three years ago but "there is no inflation" Keep printing the money! Now to the long coming war room.
Floating home?
Don't understand why they don't build floating homes in high flood risk areas?
Don't understand why they don't build floating homes in high flood risk areas?
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Paying cash for things is always good, but that does not protect you (did not protect). The demand for houses went up artificially due to government/bank actions with no money down, liar loans, etc. If you wanted to buy a house (and when you do that is determined largely by your age and the circumstances of job, family, etc.), you paid the inflated rate if you were to get a house. When the banks raised the adjustable loans (a lot of people didn't really understand how they worked, but should have), it was impossible for those people to pay the mortgage, and the foreclosures started, driving the price of all homes down, including those that were previously bought, or those where cash was paid (how many young people 24-35 can pay cash for a house...not many). Mixed with a declining economy, lots of people had no choice...if you want to eat, you need a job (except for welfare), and getting a job that covers the bills, means you may have to move. And a move, meant selling a house that had a loan worth more than the reduced selling price, but then banks stopped making loans (typical overreaction) unless people had large down payments and only the very best credit. So houses that needed to be sold, couldn't be sold, and those that needed to buy those same houses because of relocating, couldn't because they didn't have 30% down payment, etc. So the problem was compounded. In all this, the lucky ones (determined largely by your age and job circumstance) were the older people who bought a house years ago, and didn't (yet) have to move because of a job. As to being smart enough to know when things are overpriced in housing....just when would that have been, 1995, 1998, 2000, 2002, 2004, 2006? Those of you who think you can tell when things are overpriced and when to wait until they come down in price, share your knowledge with the rest of us. I submit that there is no such technique or skill. You maybe didn't get caught up in this, but it was more likely due to other factors than you being smart.
Not everyone should buy a home. If you're not 99.9% certain you want to stay in a home at least 5-10 years don't take the risk.NC-C320 said:
Adjustable rate loans should be illegal
100% of foreclosures happen when there is a mortgage. Save up and buy what you can afford and stop risking everything!
You don't need no stinking drywall!
You obviously aren't married because if you were, this conversation would sound familiar:
Husband: "What do you want to do for dinner tonight, honey?"
Wife: "I don't know. What ever you want dear."
Husband: "Okay, let's have Italian, then."
Wife: "I hate Italian"
(1) You should have a home and others should not? When you have a job, even if you are the boss of your own company, you can never be 99.9% certain that will have that job for 5-10 years. Companies go bust, downsize, people have to respond to life changes that are beyond their control. When you have a home that's not paid for, that due to market conditions is underwater, and you lose your job, you cannot pay for it, or if you have to move to another location, you have to sell your home (paid for or not) and get a place to live in the new location. So even if you have paid for your home, to sell in the depressed market, you still lose...you may have paid $450K (a modest home in CA) and can only sell for $150K, so you lose $300K. And where are you going to live in you new location?
(2) Adjustable Rate Loans were all the rage...financial advisors all advised to use them. And liars loans, and no money down were worse. But you could still have no mortgage or up to date current mortgage and you still lose if you have to sell your home. If you don't have to sell, you've still lost much of its value, you just haven't realized it. Maybe the market will return, maybe not.
(3) For the average family, getting by is a struggle. So just how long do they have to live in someone's tiny little apartment before they can save enough to buy a home without a mortgage. Ever hear of something called inflation? Save your money, get 1.5% interest, pay taxes on that, and see how long it takes for you to save $200K. And in some areas that will get you a double garage converted to a home. But wait, inflation is running realisticly a lot more than 1.5%, so the price of the home (once we get back to a normal market) is going up every year, so you may never get there without using a mortgage to buy a home.
(4) Not getting personal, but do you have a home and if you do, did you save your money until you had 100% of the price....don't answer, but just ponder the question.
Yes I am married and that conversation is very familiar. I always suggest Denny's (she hates it). Then she has to tell me where "I" really want to go.You obviously aren't married because if you were, this conversation would sound familiar:
Husband: "What do you want to do for dinner tonight, honey?"
Wife: "I don't know. What ever you want dear."
Husband: "Okay, let's have Italian, then."
Wife: "I hate Italian"
My earlier posts not disregarded, Fly-H23 is absolutely correct in stating "save and buy what you can afford", the two exceptions where borrowing is justified in my mind are homes and possibly cars....you need a place to live and in this country, you need a car in most places to get back and forth to work. But even in those cases, the principle of what you can afford is important. A small house vs. large, and a Ford instead of a BMW would make sense for lots of people. And almost everything else should be pay as you go. And unfortunately, our joint passion of boats are in reality not necessities and we should be careful in borrowing too much to afford this hobby.
Our focus in housing and the economy is the current crisis, but the Fed artificially keeping interest rates low is setting up for another crisis down the road. At 73, I can tell you that the job does not last forever, old age comes quickly, and since people live longer, we need to be setting aside significant funds to get us through about 20 years after the job stops. And on those savings, we need to be earning significant interest, otherwise when we retire, we will burn through our meager savings quickly. Those same people who lost money on their homes, and many who lost in the 2000 stock bust before that, are going to be in deep trouble. Too bad the government can't just leave things alone and let the market work out things. If you do something artificially to help one side of a situation, you hurt the people on the other side (i.e. buyers vs. sellers). Government should stay out of the economy, especially when they are too busy to even read the laws they are going to pass, and which have been written, in large part, by lobbyists for one side or the other.
Sorry for hijacking the tread. Back to buying a boat or drywall to fix the house. Admirals out rank Captains....keep the Admiral happy and things will work out ok, otherwise there will be trouble.
Yep. Very familiar!You obviously aren't married because if you were, this conversation would sound familiar:
Husband: "What do you want to do for dinner tonight, honey?"
Wife: "I don't know. What ever you want dear."
Husband: "Okay, let's have Italian, then."
Wife: "I hate Italian"
"Do you want a steak or a pork chop?"
"Mmmm, steak!"
"Pork chop it is."
"Then why did you even ask?"
LOL! Yes.
"Here's our new boat honey."
All that needs to be said.
I said to my wife. "Would you like to see my new boat?"
That was last November.
I just moved back in last month. (Kidding)
I do have a place to go now though!
Sailing!
"Here's our new boat honey."
All that needs to be said.
I said to my wife. "Would you like to see my new boat?"
That was last November.
I just moved back in last month. (Kidding)
I do have a place to go now though!
Sailing!
Yes we own a home and live where prices never skyrocketed and so also haven't fallen more than 5%. We choose a home well within our ability to pay for it on one income. As I stated it will be paid in full in a few more years, then we we will save up one of our salaries until we can pay cash 100% for our next house.NC-C320 said:
It's sad when regional economies boom and bust, I've lived in places like that a few decades ago. You can move away from the craziness that is California! Many have done it and found places like Texas, Tennessee that aren't boom and bust and also don't have a state income tax.
My point is, most people borrow too much money on cars, homes boats, ect....then cry foul when (not if) the economy takes a dive. Why risk loosing everything?
I learned long ago that I cannot out earn my own stupidity and those are mistakes that I simply won't repeat.
I blame no one but me for my financial success or failure and neither should anyone else.
Wasn't this about drywall or a sailboat?
A little disingenuous. This from a Californian, of course!
Tennessee has snow, here, if I want it, I drive to it. Texas has lots of great people and I have friends there, but my Mediterranean climate is something I prefer.Discounting the folks who bought completely out of their reach, consider the, at best, misleading tactics of the banksters. They have a lot more real estate than they did before, they're still in business (thanks to our $$ used for their bailout) and they ain't loaning. Yes, economies have ups & downs, but this one was "manufactured." Greed should have its limits with reasonable regulations. It's a delicate balance. But necessary.
I'd be interested, for instance, at how you plan to deal with the real inflation that will (usually) be the result of economic distress and recovery. As much $$ you have under your pillow, all of us will be hurt as a result, you included. Unfortunately.
The idea of a floating home, rather than one underwater (pi!) makes a lot of sense, drywall-wise.
Next keep enjoying the boat you already have
First you need to make it known that this was actually and insurance check, from an insurance policy. The smart thing to do is to invest in gold coin. Keep the purchases made only in cash and in small amounts very important to keep it low key. And stash it in a very secure place. Do not tell anybody!!! Especially your kids maybe even the wife ( because they blab!)...Plant a vegetable garden. Learn to preserve and can vegetables. Replace the sheet-rock with simple wood paneling wainscoting . Do the work your self. Next keep enjoying the boat you already have.
I must impress upon you the importance not to let your neighbors know of what you are doing not even people you might consider as close friends.
Also never go on line again and tell the public you just got a check for 10 grand, insurance or otherwise!:naughty:
Some friendly advice...
First you need to make it known that this was actually and insurance check, from an insurance policy. The smart thing to do is to invest in gold coin. Keep the purchases made only in cash and in small amounts very important to keep it low key. And stash it in a very secure place. Do not tell anybody!!! Especially your kids maybe even the wife ( because they blab!)...Plant a vegetable garden. Learn to preserve and can vegetables. Replace the sheet-rock with simple wood paneling wainscoting . Do the work your self. Next keep enjoying the boat you already have.
I must impress upon you the importance not to let your neighbors know of what you are doing not even people you might consider as close friends.
Also never go on line again and tell the public you just got a check for 10 grand, insurance or otherwise!:naughty:
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