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Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by TuborgP
A comfortable cash flow with a low debt to income level (even with a mortgage) , high credit scores and strong assets are all related to money and often associated with peace of mind.
For this retiree...I have positioned a few existing 'retirement' mortgages to free my capital for other investments (Bought 4 bargain rural homes this week for income / fix and flip).
I get an aggregate 13% net positive cash flow and have lots of equity upside (usually 20%) on several mortgaged properties. When I get to age 70 or so... I will be carrying back the paper for some of my long term tenants to buy very nice properties (that they love and take very good care of).
So people cry about the risk / hassle of income properties. I have been very fortunate and thank my lucky stars. 15th of Dec means 1 month 'cash back' to my tenants that have been 'on-time' for a yr, and never called me for something that they could fix or have fixed.
Next year we will do a one yr RTW (Round-the-world) and will be gone for 10 months. My 'rentals' are less of a worry than my other investments / responsibilities.
2.7% to 4.3% mortgages in retirement? I say 'bring me as many as you like.
While I have no pension or healthcare (after 43 yrs with a great company)... I do have positive rental income that is far higher than my previous salary. KoW
I was raised by two, dyed in the wool, hope-to-die, abusive alcoholics.
I can relate.
I'm the daughter of 2 alcoholics. My father abandoned us when I was 8 yrs old, my mother fell back on welfare. I left home at 16. At 17, I became an emancipated minor and accompanied two sheriff's deputies to check my mom into a state mental hospital. I became the guardian and head of household for me and my younger brother.
I muddled through, worked my way up from a minimum wage job to a corporate hq management position. Along the way, I obtained an undergrad then a grad degree (on my own dime and time), gave up the cushy corporate job and took a huge pay cut to become first a public school teacher, then a public reference librarian. Younger brother worked his way through school, achieved personal and financial satisfaction. Both parents eventually found redemption on their own.
Color me not impressed by any poster's whining. At the same time, color me eternally grateful that welfare, puny as it was, kept us from entirely starving during my late childhood and early teen years. Many's the time we were cold and a little hungry but that meager payment ($58/mo in the 60's), along with occasional handouts from local charities and church groups, enabled us to keep body and soul together.
edit to add: a striking memory is 1967, when members of a local charitable organization (I think they were Lion's Club but not sure) knocked on our door a couple of days before Xmas and delivered several paper grocery bags of groceries. They wore Santa caps and were no-nonsense, didn't waste any time on niceties because they had many deliveries to finish. Wow, talk about overwhelmed, I felt like we had won the lottery! Every holiday season, I remember that and try to pay it forward.
Last edited by biscuitmom; 12-07-2014 at 12:27 AM..
I think it is those of us who had the toughest childhoods who had to mature the fastest and learn that personal responsibility is not optional. I realized when I was about 12 that if I needed something done in life, I would probably have to do it myself. I learned that lesson and have lived it forever.
We have a mortgage and probably will until we decide to stop owning a home. We also have cash flow to support that. We wouldn't have retired otherwise. We own a rental outright and could always fall back on that if we had to, but hopefully we won't as that would mean a significant change in lifestyle and location.
I have never, as beergeek relates, looked at a mortgage statement as a threat of foreclosure looming over me. It's just another bill, and it gets paid first. That simple.
I would have to at least think about taking on a mortgage.
Assume you are 66 when you sell your old home, the mortgage was paid off 5 years before, for $200k and move down to a $150k house.
Do you want to put $150k on the new house purchasing it directly or do you want to put 20% down, take out a 30 year (40 year might be better) fixed mortgage at 4%? If you do the mortgage thing you keep $170k in your bank account instead of $50k but paying a monthly mortgage of $572.90?
The whole idea is never to pay the mortgage off.
To some it might seem insane but what if your health issues led you to believe you had 10 years left?
Then there are other issues as well to consider such as a surviving spouse?
Coming here for a few years the one thing, actually two things, I've have learned is a perfect retirement plan doesn't exist because we are all different. I love where I am heading when I retire but I am sure there are plenty of you that would just hate my idea of what is perfect.
The other thing I learned? I learned by working just a few more years can make up for a lot for not saving for retirement like you should have or, as what happened in my case, sometimes droppings just happen and sometimes they aren't your fault.
Here in Indiana, there are plenty of livable homes commutable to Indianapolis for under $50k. They aren't sexy, and may need some work, but a fifteen year mortgage on those at 30 years old means it's paid off by 45, and Is as affordable as it gets. No reason to have a half million dollar mortgage at retirement when you can live more cheaply in so many places.
Here in Indiana, there are plenty of livable homes commutable to Indianapolis for under $50k. They aren't sexy, and may need some work, but a fifteen year mortgage on those at 30 years old means it's paid off by 45, and Is as affordable as it gets. No reason to have a half million dollar mortgage at retirement when you can live more cheaply in so many places.
Here in New England, I have seen a number of homes sell for as low as $40k, ready to live in.
Also the real estate auctions commonly have nominal prices starting at $1,000. Commonly they go for under $20k, but those will generally need some work.
We have $60k invested into our home, but we have no mortgage.
Here in New England, I have seen a number of homes sell for as low as $40k, ready to live in.
Also the real estate auctions commonly have nominal prices starting at $1,000. Commonly they go for under $20k, but those will generally need some work.
We have $60k invested into our home, but we have no mortgage.
Yeh, in the northern forests of Maine, maybe. Here in Mass. houses go for $1 million, some more, some less. The average seems to be $400,000-$500,000 although you could probably live miles from anywhere out in the woods for $150,000. Maybe.
We're leaving New England. I will miss it terribly but the high prices of everything, including the sky high utility bills, are forcing more and more people out every year. Not many retired people want to live like you do--but more power to you and I hope you can hold on for many years to come.
ETA: The average selling price for a house in Mass is $387,818, a little lower than I thought, but add in everything else PLUS taxes and it gets impossible. Rentals aren't cheap here either. The given price, of course, averages in the crime ridden slum cities and the one horse---way out in the middle of nowhere towns where you can buy a house for $120--but who would want to? I live near the middle of nowhere and this isn't even affordable anymore.
Last edited by in_newengland; 12-07-2014 at 08:09 PM..
^^^^^^ Yes, the vast difference in home prices from one area of the country to another never ceases to astonish. I lucked out with my timing; I bought my two-bedroom plus loft, 2.5 bath townhouse for $190,000 in 2001, just before the frenzied and insane run-up in prices which led to the crash about six years later. Just before the crash, these units were selling for $435,000! Insane. The prices went way back down, but never as low as $190,000. I still feel like a got a real bargain.
I think it is those of us who had the toughest childhoods who had to mature the fastest and learn that personal responsibility is not optional. I realized when I was about 12 that if I needed something done in life, I would probably have to do it myself. I learned that lesson and have lived it forever.
We have a mortgage and probably will until we decide to stop owning a home. We also have cash flow to support that. We wouldn't have retired otherwise. We own a rental outright and could always fall back on that if we had to, but hopefully we won't as that would mean a significant change in lifestyle and location.
I have never, as beergeek relates, looked at a mortgage statement as a threat of foreclosure looming over me. It's just another bill, and it gets paid first. That simple.
As the result of the childhood I experienced with an alcoholic, abusive father and a weak self-centered, enabling mother who blamed all her problems on the children who came along too soon, I learned three things, hard lessons but which I think serve one well in this tough world of ours: 1) You are NOT the center of the universe, 2) No one owes you a damn thing, 3) If you want something, figure out how to do, or get it yourself.
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