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Good luck. According to Robert Shiller the real CAGR of US home prices over the past 120 years has been less than 1%.
It doesn't matter if a home loses 100% of its value. At the end of the day, a home is a tangible asset that you can still live in. Stock, bond, and the 401k are intangible asset that if they lose 100% of their values; what do you have left in your hands???????
Age: late 20's, Married, no kids yet
Roth 401K: $50K
Pension: $10K
Cash: $20K
House: $900K
==========
Total: $980K
Debt:
House Mortgage: $640K
==========
Total: $340K
We bought a multi-family home as a investment and to avoid having all our future earning going to paying off the mortgage (renting a section of the house to cover the mortgage). Sucks being cash poor for the moment, looking to save money in the near future for investment opportunity and build a decent reserve (for when you have a unexpected cost).
My biggest concern is making a mistake given my age and lack of experience.
I don't join the 401k because I think the employer match is not "free" money. I have to work x years to get xx % of vesting. I don't want my money to get locked up in an IRA either. My 401k is my mortgage.
Reading this I felt like I was transported back to 2005!
It doesn't matter if a home loses 100% of its value. At the end of the day, a home is a tangible asset that you can still live in. Stock, bond, and the 401k are intangible asset that if they lose 100% of their values; what do you have left in your hands???????
Has anyone ever, in history, lost 100% of their stock and bond holdings outside of collateral for overextended loans?
It doesn't matter if a home loses 100% of its value. At the end of the day, a home is a tangible asset that you can still live in. Stock, bond, and the 401k are intangible asset that if they lose 100% of their values; what do you have left in your hands???????
The chance of your stock and bond losing 100% value when properly diversified is lower than the chance of your house losing 100% of its value in a calamity.
today a paid off house down the road may account for zip in the equation.
when we first bought homes in the 1970's a home in the tristate area was 35k.
30 years later it was paid off. big deal , today taxes are 18k a year on that house. that paid off mortgage was like peeing in the ocean. you saved little in the end by paying off the mortgage. a 30k mortgage was such a tiny part of what it costs today between taxes and insurance that it hardly counts at all in the affordability equation.
today a paid off house down the road may account for zip in the equation.
when we first bought homes in the 1970's a home in the tristate area was 35k.
30 years later it was paid off. big deal , today taxes are 18k a year on that house. that paid off mortgage was like peeing in the ocean. you saved little in the end by paying off the mortgage. a 30k mortgage was a couple of hundred bucks in that deal today.
I agree.
And people really need to remember before they think that their house is a tangible thing that it will no longer belong to you if you miss a tax payment. So do you really own it?
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