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As we continue to live in this clown world, how are people affording expensive big ticket items when they are marked up so much? My guess is credit and specifically cash out refinances.
We do very well and still cant seem to pull the trigger on any of the things that we would like to because of the inflated pricing but we continue to see things being purchased like its 2018. Just one example is an inground pool. When we closed on our new home we looked at getting a pool/HT. We were quoted $79k in late 2020. Same refreshed quote now is over $110k. With that said I think we see a new pool project started every week in our neighborhood. Makes no sense to me but not my money.
Same thing with autos. I see people trading in perfectly good cars for the latest and greatest that they are paying MSRP or over for them if new and 30%+ over value for a quality used vehicle. Even with the increased trade values, this is a losing purchase. I hope everyone financing a car right now buys the GAP insurance.
Just curious.
Last edited by fastball92; 01-18-2022 at 11:52 AM..
I had someone tell me recently that an inground pool is about 300k. That seems insane to me and maybe they were off.
I certainly have seen many many people doing house improvements. I think this was happening before the pandemic but seems to have exploded. People spent more time at home and less money on vacations, hosting events they normally would have or going out to eat
We did a project with our front lawn that cost around 50k. I can't say that was money we didn't spend on vacations (although it's been quite some time since we've gone anywhere). We moved into a new house in 2020 and it was just something we wanted to do to make the house look nicer.
I am appalled by what it costs for home improvements...it seems like it's something the only rich people are able to do these days? I dont think home improvements have ever been cheap...but they seem to cost more than they should as far as I'm concerned. I've mentioned before in live in the Boston area and many people here seem to have large amounts of money to say the least. Feels like contractors have just stretched the costs of the labor and companies have upped the supply costs simply because they can.
I am also shocked by what it costs to buy a house around here. My guess is that folks who would have moved decided not to maybe due to costs and chose to have home improvements...there are lots of old homes around here so the amount of work to be done must be astronomical. I dont know that that makes it right as the average joe likely doesn't have the money to improve their home.
The older you get, the more you realize how many dumb people there are in this world. It's called debt and financial irresponsibility, for the most part. Of course, there are some people that truly have the money and can spend it. On the Gulf Coast here, you see many $100k+ boats being pulled by $70k trucks. There's also other situations: inheritance, lawsuit winnings, living in no-mortgage house handed down from a family member, etc.
I don't see it as affording things, I see it more as am I receiving value for what I'm spending. One the price gets beyond a point where I think it's fair value, I don't buy it. Plenty of other people will as the concept of value is very subjective.
Patience. That's how I deal with things when people are in a frenzy. Why get into a frenzy with everyone else fighting for limited resources?
So in the meantime, I'm investing in the market and pay down my existing debt. If inflation is at 6-7% but my investment accounts are doing 26+% then I guess I can live with that for now. When it becomes a buying opportunity again, I'll be there with enough coin and credit to make moves.
I was lucky that I was able to renovate my house in the early part of 2020. I didn't have to buy a house, instead I had a rental that I just happened to take over in late 2019. Then signed a contract to renovate it and moved into it June 2020 with my family. I then was able to refinance it in 8/2020 at 1.875%
I am in the market for a new fridge. The existing one is old, but functional so I'll move it to the basement. I have the cash, but I'll charge it and get the reward points. Points then go towards cash back and added to brokerage account.
Well, I'm losing. I can afford things, but it's affecting my savings rate. A 2% raise meant I'm 4-5% worse off financially vs a year ago. It is what it is. Purchasing power going away thanks to our ghost of a President.
Last edited by Don_Draper; 01-18-2022 at 02:11 PM..
This is my thought on this as well. I have enough cash in the bank to put in the pool. I refuse to pay these prices so I want to move it out of the savings and into the market. Same thing with the autos. We have just about run the wheels off our 2010 pilot, but Im in no hurry and wont replace unless I absolutely have to.
My wife on the other hand keep trying to hang onto the hope of getting a pool. I very lovingly told her that we are priced out of the market and that she would need to get a source of income if she really wants it that bad. sorry, not sorry.
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