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Old 06-02-2019, 04:35 PM
 
Location: Indianapolis, East Side
1,167 posts, read 575,124 times
Reputation: 2947

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The author just took out a "large mortgage" for a condo at age 75? And yet he's lecturing people on $4 lattes?
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Old 06-02-2019, 05:07 PM
 
2,066 posts, read 699,344 times
Reputation: 5311
Quote:
Originally Posted by sheerbliss View Post
The author just took out a "large mortgage" for a condo at age 75? And yet he's lecturing people on $4 lattes?
Perfectly reasonable if he has the income to make the payments and is getting a higher return on his invested assets than he's paying on the mortgage. I'm 66 and have a 3% mortgage.

To me, it's all about priorities and spending on the stuff and experiences that genuinely make you happy. My vacation budget and my charitable giving are way above average given my income. No tattoos, 5-year old smartphone with a Ting plan that averages under $20/month, 7-year old car bought used, clothing spending YTD is $16 for a pack of socks at Costco, YTD spending on restaurants under $500 and that includes occasionally treating people. I haven't paid real money for Starbucks for years; I get gift cards from donating blood and answering marketing surveys. No credit card debt or car loans. Books from the public library, no stuff for the house other than replacements when needed. I do my own yard work and clean the house. Very freeing to be able to live within your means.
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Old 06-02-2019, 05:54 PM
 
7,895 posts, read 5,024,944 times
Reputation: 13528
Quote:
Originally Posted by ddeemo View Post
You are trying to justify your poor decisions and small luxuries that cost dearly in the long run.
On the contrary, I've spent a lifetime skimping on the small daily indulgences, in effort of training myself to live a more ascetic, frugal life... only to regret it. Instead, to have avoided 2-3 glaring blunders would been financially more prudent. One example of a blunder was having bought a sprawling, poorly-built property in the countryside, in an economically depressed area. Had I rented, or bought a tiny shack in-town, I'd be ahead by decades years worth of lattes (or cigarette packs, were I to have been a smoker).

Quote:
Originally Posted by ddeemo View Post
As a side note - Time makes a big difference also, 45 years ago, the convertible British sports car that I drove in HS, I bought for about $400 from working minimum wage summer jobs. Five or six years later, less than 6 months out of college, I could have bought a 7 or 8 year old used Ferrari Dino that they were asking about $4k for then, now that car would be worth close to $400k.
As something of a car-collector, I can relate. But let's not underestimate the cost of maintenance and storage. The cars that appreciate in value are gingerly pampered. Even a Ferrari Dino that was driven hard, poorly maintained, stored outdoors, and which had gotten rusty, moldy and undrivable, would likely not be worth even $40K. Meanwhile, that $4K that you'd have spent on it in 1980, would be worth considerably more than $40K today, had it been invested in the US stock market.
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Old 06-02-2019, 06:24 PM
 
Location: Indianapolis, East Side
1,167 posts, read 575,124 times
Reputation: 2947
Quote:
Originally Posted by athena53 View Post
Perfectly reasonable if he has the income to make the payments and is getting a higher return on his invested assets than he's paying on the mortgage. I'm 66 and have a 3% mortgage.
The article doesn't clarify the reason for the large mortgage. Maybe he's downsizing from a house to a condo and used a mortgage to make it happen; that's what it sounds like.

I disagree that taking out a large mortgage in retirement is a good idea. I saw from watching my own parents--who were treading water even with a paid-off house--that retirement is a good time to downsize. Elderly people become less and less able to take care of a house and they have to spend more and more on health care and hiring people to do things they used to do themselves. Besides, most of money early in a mortgage goes towards interest. None of this even gets into the transaction costs of selling a house and moving or repairs and maintenance on a house or assessments on a condo.

I never splurged on anything on the list and that's part of the reason I've had a paid-off house since age 46.
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Old 06-02-2019, 06:35 PM
 
Location: SoCal
13,191 posts, read 6,301,958 times
Reputation: 9808
I took a mortgage in retirement, I’ll be stupid not to, at 3.5% interest rate, I’ve esrned at least twice that rate from my investment.
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Old 06-02-2019, 08:21 PM
 
Location: Indianapolis, East Side
1,167 posts, read 575,124 times
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Quote:
Originally Posted by NewbieHere View Post
I took a mortgage in retirement, Iíll be stupid not to, at 3.5% interest rate, Iíve esrned at least twice that rate from my investment.
So you've netted a 3.5% return from being a landlord? You'd have done better in most of Vanguard's treasury funds with a lot less effort and a lot less risk.
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Old 06-02-2019, 09:59 PM
 
Location: Southern California
23,644 posts, read 8,219,173 times
Reputation: 15437
I didn't see a list, but what stands out to me is a $160 Coach bag many years ago, I never used it and it went to goodwill a few yrs ago. I never liked it but didn't take it back.
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Old 06-02-2019, 10:13 PM
 
Location: southern california
55,644 posts, read 74,585,953 times
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All my fellow workers liked that stuff too plus nice cars and club med
I ate a lot of bean burritos and did quadruple mortgage payments
They are still working 12 years later
Signed
A retiree
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Old 06-02-2019, 10:20 PM
 
7,895 posts, read 5,024,944 times
Reputation: 13528
Quote:
Originally Posted by jaminhealth View Post
I didn't see a list, but what stands out to me is a $160 Coach bag many years ago, I never used it and it went to goodwill a few yrs ago. I never liked it but didn't take it back.
This particular example merits emphasis. The handbag is a "style" purchase, perhaps rarely used, and in any case costly only because it's fashionable. Compare that with the much-maligned $4 latte. That is instantly and palpably pleasurable. The pleasure is sensory, rather than some abstraction like status, prestige or group-belonging. A $10 handbag might serve the same utility as a $160 one, but a $0.25 cup of Folger's brewed at home doesn't have the rich, indulgent, caloric taste of the $4 latte. Indeed, to get a machine that brews comparable lattes at home, one might need to spend hundreds of dollars, and perhaps $1 or more per cup on just the ingredients. The economy of scale is such that if one gets a latte every day, then maybe it's cheaper to brew it at home. But a latte 2-3 times a week might actually be cheaper at the coffee shop, especially if one is inept in the kitchen, harried, inattentive and clumsy.

Likewise with restaurant meals. Sure, $200 fine-dining is silly. But a $7 Chinese buffet is not. There's just no way that I could buy at Kroger or Wal-Mart or whatever the amount of pork, chicken or shrimp that I'd consume at a single-sitting at the local Asian King Buffet. At Meijer's, the local discount supermarket, 1 pound of frozen shrimp goes for maybe $8 on sale. Upon having consumed 1 pound of food at the buffet, I'm just getting started. It's my only meal for the day. How is that... not frugal?

While I'm on the subject... many of the items on the "waster" list are indeed a waste for families... but not for single people who don't have kids. Taking a family out to dinner is expensive. Cooking for one person, however, may not be such an excellent deal. Likewise with so many items of personal consumption. One of the most wasteful things that a single person could do - in my personal experience - is to buy a house aimed at families. That house has to be heated, cleaned, maintained. A bunk-bed in a dormitory may be sufficient. But even 1500 square feet - a tiny house by modern standards - is vapid and profligate excess... at least in declining markets, where houses are over the course of decades a depreciating asset.
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Old 06-02-2019, 10:24 PM
 
Location: SoCal
13,191 posts, read 6,301,958 times
Reputation: 9808
Quote:
Originally Posted by sheerbliss View Post
So you've netted a 3.5% return from being a landlord? You'd have done better in most of Vanguard's treasury funds with a lot less effort and a lot less risk.
Investment in stocks.
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