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for most americans the only sizable savings they will have is their home . call it the consolation prize if you want but americans are terrible at saving as well as investing .
at the end of the day it generally isn't going to wind up they bought the home and invested the difference from their mortgage or the difference if they rent .
so the more money that gets forced in to a home the greater their choices become later on .
of course it sucks ending up house rich and cash poor but as many long islanders stated in the aarp survey their intention is to sell and have a few hundred k to take elsewhere
for most americans the only sizable savings they will have is their home . call it the consolation prize if you want but americans are terrible at saving as well as investing .
at the end of the day it generally isn't going to wind up they bought the home and invested the difference from their mortgage or the difference if they rent .
so the more money that gets forced in to a home the greater their choices become later on .
of course it sucks ending up house rich and cash poor but as many long islanders stated in the aarp survey their intention is to sell and have a few hundred k to take elsewhere
This scares me as well as I have a plan on paying my mortgage off early but that would leave me with a 500K house and maybe 30-40K in savings.
How much is your monthly payment? You might try this:
1. Pay off mortgage
2. Get pen fed home equity loan for $25k. 5 year fixed at 3.74%. $457.60/month. No closing cost.
3. You now have 55-65 k in cash
(you could reverse steps 1 and 2 if you want.)
Well my goal to pay it in 15 years (we are 3 years in) would be my normal P+I payment of $1600+$1300 Principal payment.
I guess If i just keep paying myself that payment after the mortgage is done then I will have around 35K + existing savings in a year. Hmmm...not so bad.
when we first got homes in long island in the 1970's they were 35k . that mortgage took 30 years to pay off for many in our group and that mortgage was a lot of dough back then to us .
well today the fact our friends all paid off those 30k mortgages is really a moot point in the affordability of living there . taxes can run 5 digits today in a year .
today those homes are 600-700k and for our friends it is the bulk of their retirement savings .
Last edited by mathjak107; 02-22-2016 at 03:29 PM..
Meh, it's just a bunch of junk science and misinformation although just grossly it's not all that bad advice. Just for example, using the average life expectancy of 30 to mean anything. Yeah, it was 30 but it was 30 because a huge number of people died before 5. In paleolithic times if you made it to 15 you had an additional 39 years of life expectancy, 15+39=54. That's also about the age we start having problems today. So yeah, our bodies pretty much were designed for 3/4ths of a century of pounding. The main issue is that people didn't survive childhood. It would be more accurate to say that our bodies aren't designed to survive childhood than draw a fake conclusion that's not based on evidence. Walkable communities. Did you know Loma Linda is a "Blue Zone" community? Yeah. For those that don't know it's in exurban LA and about as car-dependent as it gets. Again, the actual evidence doesn't support his conclusions but he draws them anyway. The closest thing to a grocery store in the entire city is a WalMart. Agenda>Facts. Again, nothing particularly wrong with the agenda but it's unsubstantiated claims and nothing more.
Yes, I read the book, so of course, I know Loma Linda is a blue zone community. He even pointed out that it's in a car oriented area, but that the majority Seventh Day Adventists who live there emphasize regular exercise and nature walks as part of their faith. He also used Loma Linda specifically to point out that one can still get these health benefits by living a fairly typical American lifestyle if you just add a few important tweaks.
I don't know how you can say it isn't scientifically valid. They go all around the world, find people living a similar lifestyle and then there's not enough scientific evidence. Sheesh! How much evidence does one need?
Mathjak gave me this same load of BS before he retired. Then he retired, started exercising and eating healthier and lost a bunch of weight. Then all of a sudden, he started (grudgingly) admitting his health issues weren't rooted in genetics, as people so often say when they don't want to change their habits.
I'm sure that's true for a segment of the population, mathjak, but serious heath issues, whether brought about by accident or common illness, can wipe out a lifetime of good choices and decisions, financially speaking. Chronic illness can be financially devastating, particularly when insurance companies decline to pay what they ought to. Not everything we pay in to in life, pays out; it should, but it doesn't.
70% of the illness we have in the U.S. is preventable. So there's lots of poor decision making there, too.
Most of us experience one of the big three financial killers in life
Divorce - Illness - Job loss .
It is rare it is the event that causes someone to commit financial suicide.
When you trace back you generally find it was a path of poor choices and bad decisions leading up to that event that set them up for the fall.
Spending money on things other than proper insurance types is common, career choices, or lack of action to get better pay, poor mate choices, etc., etc., etc. The list goes on and on but rarely will you find a true case of just the fact of the event did them in .
Yes, there are exceptions but not many. Who you are as person generally relates to how you treat your financial life.
It depends on your value system. In the mathjak107 value system, he who dies with the most money wins. Life decisions that to not achieve that goal are deemed "bad".
I've made plenty of "bad" financial decisions in my life. I'm twice divorced. I opted to spend on lifestyle things rather than save and invest.
Have you sailed your yacht down Merchant's Row off Stonington, Maine on a perfect summer afternoon? Or watched the sunrise from the cockpit in Cuttyhunk harbor? Have you skied waist-deep champagne powder at Steamboat? Or had the adrenaline buzz of skiing the Sudan Coulour or Spanky's Ladder at Whistler-Blackcomb? Or gone heli-skiing in New Zealand? Or snow cat skiing in the Monashees? Or summer skiing at Termas de Chillan or Valle Nevado? Have you seen the Mona Lisa at the Louvre? Or seen the Van Gogh museum in Amsterdam? Gazed at the ceiling of the Sistine Chapel? Have you walked through Chenonceau or Chambord or Versailles? Have you sat 30 feet from Yo Yo Ma performing cello at the Boston Symphony? Heard the national symphony in Prague? Walked the vineyards and tasted wine in Alsace? Or Champagne? Or the Hunter Valley? Or Bordeaux? Or Chateauneuf du Pape? Have you been told at the Hofbrauhaus in Munich after a night of beer and belting out German drinking songs that you drank like a German? Have you played golf at the Royal Dublin? Or hit a ball into a kettle bunker in Portmarnock? Scuba diving the reefs of Grand Cayman?
I'm not going to die with the most money but I wouldn't trade my life's experiences when I was young and healthy enough to enjoy them for huge piles money in retirement.
All of this is perfectly fine, at least in theory. In practice, major problems arise when these folks end up old, broke, and impoverished. When they reach that point, hey almost never say "Oh well, I lived for the moment and poverty in old age is just the trade off I made". They don't say that at all. Instead, they want someone else (the taxpayers, charity, or family) to bail them out in one way or another.
But if it's enough for you why would you be upset?
Because it's just annoying to hear people talk about $1m as if it's poverty or semi-poverty.
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