U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 07-02-2019, 05:20 AM
 
39 posts, read 35,547 times
Reputation: 53

Advertisements

Quote:
Originally Posted by ysr_racer View Post
And what does your primary home have to do with rental property?

Because you have decided to rent a property out, it now magically does nothing but appreciate? You bought your places in 2000, which I am guessing was a lucky call for you. If you had gotten the real estate bug in 2006 instead, your view on rental properties might be different. I will leave it here, since you tempered your answer in another post with 'most properties' appreciate... which I of course agree with.
Reply With Quote Quick reply to this message

 
Old 07-02-2019, 05:33 AM
 
Location: RVA
2,164 posts, read 1,265,616 times
Reputation: 4451
Quote:
Originally Posted by ysr_racer View Post
If you retire on stock market investments only, when the market goes up, your portfolio goes up, guess what happens when the market goes down?
Absolutely nothing. Does your income change when the value of your rental drops or increases when it rises? Portfolio size is only indirectly linked to income, when done intelligently. Since you have stated multiple times that you have no interest in learning about finance or investing, but rather pay someone to handle your taxes and savings, then your opinion and understanding of how investing operates as income generation is useless. You have taken the simple viewpoint that if it goes down, then that is bad. If a static portfolio goes from $500k to $1M, then drops to $750k, did you lose $250k or make $250k. The correct answer is neither. Besides possible dividends you own the same number of shares. You have made or lost nothing until you sell shares. This is no different than when people say they made $200k when their house appreciates or lost $100k when a RE bubble bursts. They have MADE or LOST nothing unless they sell the property. Then, gains or losses can be compared to the actual basis cost of the house plus upkeep, taxes, etc. to be compared to other uses of the money.

The advantage of investments are the ability to buy low and sell partially as wanted when high. Its not like I can sell an unused bedroom when real estate is high, then have it added back on when real estate is low. The above posters have stated they bought property when real estate was on the rise and looked to be rising still. Until it didn't. If you bought property in hot markets like FL and Cali in 2006 and had to sell it in 2009, chances are you lost money. I bought my last home in 2007, after selling the previous one for more than double what I paid for it in 2001. I deliberately changed locations in the same city because of my understanding of where the real estate winds were blowing based on new construction, school districts, and employer moves. By 2008, my previous home had dropped in value to slightly more than what I had paid for it in ‘01, and my new home only dropped 10%. When I sold it last year, it had increased in price 43%, (the majority of which occurred in the last 2 of 12 years ownership) while the previous home, which coincidentally sold a month after we sold, sold for $20k less than they had paid for it. All this occurred within a 10 mile area in nice desirable neighborhoods. Some were just currently more desirable than others. Some serious thought and effort coupled with an odds influenced amount of luck, enabled me to actually make a significant net amount. Timing was everything.

Meanwhile, friends & neighbors that have lived in their paid off home in the same old neighborhood lament how their property has lost so much. In reality they are still fine. One purchased the house new in 1982 for $68k. At one point it was worth almost $400k. Now it is only worth about $280k. The problem with them is that they are constantly using their paid off home equity for lines of credit to borrow for new cars and their kids college. But that’s a totally different problem.

When equities drop, as they always do during economic cycles, that signals buying opportunities, which can be taken advantage of after equities rise. People lose money because they are ignorantly uninformed about the risks and normal operations of the investment world and let greed over ride the basics. Unfortunately, for those type people, it is exactly that which allows the level headed investors & professionals to make solid gains. It IS true, of course, that if you are required to sell significant assets during a down market, you may lose money depending on when and at what price the equities were purchased at. But for long held diverse portfolios, you almost have to work at it to lose principal. The real difference is that with investing you can & should control the timing. With real estate you often can’t.

Last edited by Perryinva; 07-02-2019 at 06:04 AM..
Reply With Quote Quick reply to this message
 
Old 07-02-2019, 05:34 AM
 
Location: SoCal
13,221 posts, read 6,320,879 times
Reputation: 9827
Quote:
Originally Posted by fumbling View Post
The S&P 500 is up about 17% ytd and was down 4% last year, not 11%.
Some people on Bogglehead claimed he was up 21% ytd, it turns out he was down 22% last year, thatís why I asked, not everybody is into indexing even on an indexing forum.
Reply With Quote Quick reply to this message
 
Old 07-02-2019, 05:36 AM
 
Location: SoCal
13,221 posts, read 6,320,879 times
Reputation: 9827
Quote:
Originally Posted by leastprime View Post
Of course alternative abbreviations: IS, ID, SS,
I thought DS stands for Dear Stupid in this thread?
Reply With Quote Quick reply to this message
 
Old 07-02-2019, 06:15 AM
 
Location: RVA
2,164 posts, read 1,265,616 times
Reputation: 4451
He had to work at being down 22% for 2018 if indexed investing. Buy high and sell low. Or risky & volatile equities.
Reply With Quote Quick reply to this message
 
Old 07-02-2019, 07:01 AM
 
Location: SoCal
13,221 posts, read 6,320,879 times
Reputation: 9827
Quote:
Originally Posted by Perryinva View Post
He had to work at being down 22% for 2018 if indexed investing. Buy high and sell low. Or risky & volatile equities.
He was in crypto if I recall correctly.
Reply With Quote Quick reply to this message
 
Old 07-02-2019, 07:11 AM
 
71,518 posts, read 71,694,121 times
Reputation: 49100
Quote:
Originally Posted by Perryinva View Post
Absolutely nothing. Does your income change when the value of your rental drops or increases when it rises? Portfolio size is only indirectly linked to income, when done intelligently. Since you have stated multiple times that you have no interest in learning about finance or investing, but rather pay someone to handle your taxes and savings, then your opinion and understanding of how investing operates as income generation is useless. You have taken the simple viewpoint that if it goes down, then that is bad. If a static portfolio goes from $500k to $1M, then drops to $750k, did you lose $250k or make $250k. The correct answer is neither. Besides possible dividends you own the same number of shares. You have made or lost nothing until you sell shares. This is no different than when people say they made $200k when their house appreciates or lost $100k when a RE bubble bursts. They have MADE or LOST nothing unless they sell the property. Then, gains or losses can be compared to the actual basis cost of the house plus upkeep, taxes, etc. to be compared to other uses of the money.

The advantage of investments are the ability to buy low and sell partially as wanted when high. Its not like I can sell an unused bedroom when real estate is high, then have it added back on when real estate is low. The above posters have stated they bought property when real estate was on the rise and looked to be rising still. Until it didn't. If you bought property in hot markets like FL and Cali in 2006 and had to sell it in 2009, chances are you lost money. I bought my last home in 2007, after selling the previous one for more than double what I paid for it in 2001. I deliberately changed locations in the same city because of my understanding of where the real estate winds were blowing based on new construction, school districts, and employer moves. By 2008, my previous home had dropped in value to slightly more than what I had paid for it in ‘01, and my new home only dropped 10%. When I sold it last year, it had increased in price 43%, (the majority of which occurred in the last 2 of 12 years ownership) while the previous home, which coincidentally sold a month after we sold, sold for $20k less than they had paid for it. All this occurred within a 10 mile area in nice desirable neighborhoods. Some were just currently more desirable than others. Some serious thought and effort coupled with an odds influenced amount of luck, enabled me to actually make a significant net amount. Timing was everything.

Meanwhile, friends & neighbors that have lived in their paid off home in the same old neighborhood lament how their property has lost so much. In reality they are still fine. One purchased the house new in 1982 for $68k. At one point it was worth almost $400k. Now it is only worth about $280k. The problem with them is that they are constantly using their paid off home equity for lines of credit to borrow for new cars and their kids college. But that’s a totally different problem.

When equities drop, as they always do during economic cycles, that signals buying opportunities, which can be taken advantage of after equities rise. People lose money because they are ignorantly uninformed about the risks and normal operations of the investment world and let greed over ride the basics. Unfortunately, for those type people, it is exactly that which allows the level headed investors & professionals to make solid gains. It IS true, of course, that if you are required to sell significant assets during a down market, you may lose money depending on when and at what price the equities were purchased at. But for long held diverse portfolios, you almost have to work at it to lose principal. The real difference is that with investing you can & should control the timing. With real estate you often can’t.
"losing principal " is really the wrong phrase when it comes to investing because once that value hits your account it is all your money .

in effect each day we are really buying in and just leaving the money in play over night to see what it brings us the next day . but that value is there for the taking , you just choose not to take it .

heck , if you started in 1987 when i did with 100k and that portfolio is worth 3 million today would you really say you can be down 290k and you haven't lost principal ????? well you could say that but it really makes no sense to look at your balance on any given day and gauge it on what was 30 years ago . that 7 figures was all mine regardless what i started with or whether i sold along the way and put it back in or not .

in fact that total portfolio value is what determines my income draw each year whether i sell or not . since i use a variable draw method it is directly linked to portfolio value .

so not selling investments just means we hope the value changes if markets are down .. but sure as heck that is all it is worth , whether you may care at this stage is a different issue .

in fact i can hope to ride the same investment back up or sell it and ride another investment back up , that does not mean the money in either case is any less all yours .. peiople argue this nonsense all the time with "it's only a loss on paper " ---no it ain't .

Last edited by mathjak107; 07-02-2019 at 08:11 AM..
Reply With Quote Quick reply to this message
 
Old 07-02-2019, 07:18 AM
 
Location: Washington State
18,497 posts, read 9,567,372 times
Reputation: 15768
Quote:
Originally Posted by ysr_racer View Post
My wife and I went to another free dinner/financial planner sales pitch last night. In addition to getting a bunch of free dinners, we're learning a few things.

The "rule of 100" states, take the number 100, subtract your age, what's left is the percentage of your portfolio (minus a year's living expenses in cash) that should be in stocks, mutual funds.

The rest should be in something that provides you income, rental properties, CDs, bonds, and of course annuities (that they'll happily sell you).

So basically, if I'm 61, 39% of my portfolio should be in stocks and mutual funds.

Anybody heard of this investing idea?
I've heard of it and think it's outmoded or was always a bad idea. I think balancing return versus risk should always be the goal and diversity of investments is probably a good thing. To that end, we have diversified between equities and real estate which provides a nice monthly income.
Reply With Quote Quick reply to this message
 
Old 07-02-2019, 07:24 AM
 
71,518 posts, read 71,694,121 times
Reputation: 49100
our real estate was fabulous for the most part ... but the two remaining co-ops we have are just shy of breaking even on the rent and new laws signed in to place last month capped rents so if we can't sell them for cents on the dollar we will likely walk away rather then subsidize tenants , especially being retired .
Reply With Quote Quick reply to this message
 
Old 07-02-2019, 07:30 AM
 
7,979 posts, read 11,657,672 times
Reputation: 10473
Quote:
Originally Posted by ysr_racer View Post
My wife and I went to another free dinner/financial planner sales pitch last night. In addition to getting a bunch of free dinners, we're learning a few things.

The "rule of 100" states, take the number 100, subtract your age, what's left is the percentage of your portfolio (minus a year's living expenses in cash) that should be in stocks, mutual funds.

The rest should be in something that provides you income, rental properties, CDs, bonds, and of course annuities (that they'll happily sell you).

So basically, if I'm 61, 39% of my portfolio should be in stocks and mutual funds.

Anybody heard of this investing idea?
Rental properties, what a headache. CDs, don't pay much. Bonds? part of my mutual funds I think? Annuities. People talk bad about them them but they are still around. Don't know that much about them.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top