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Most folks confuse market volatility with risk. They are not the same at all.
Sure they are. If it comes time for you to exit the market, for whatever reason, on a downturn then you end up taking a hit. That's a risk....specifically "Market Risk."
Not at all. Someone Not having the stomach for volatility is not risk. It is poor planning. Putting short term money in long term investments is poor planning not risk.
Poor planning on your behalf may make something risky for you because of your own actions. That does not mean the asset is risky.
The rise and fall of broad based markets is volatility. Buying penny stocks or betting the ranch on a stocks whims is risk.
The natural cycles of markets are volatility.
Everything has some element of risk even cash and at different times risk levels can be higher or lower depending on time frame.
Volatility changes to risk when time frames are mismatched but again that is user error.
Last edited by mathjak107; 08-13-2014 at 02:59 PM..
At a very cursory glance, NC has kind of been a "worse of both worlds" in my assumption. You have the low wages of Southern states, but some of the highest taxes for a red state in the South.
along with a long coast line and a multitude of beaches in the East and the mountains in the West. For us we have the wonderful Raleigh Triangle as a home base with much to make life enjoyable. It would be foolish for me to include average wage in my feelings about the quality of our life in the state because it is our financial resources that drives our engine. That aside what is great is spending your working years in a high income state with a resulting high level of resources to transplant with to North Carolina-priceless. Taxes here are much lower in comparison to where many retired transplants came from. Again a personal retiree resident perspective. To be honest I just got back from the sand and ocean twenty minutes ago and it is shower time. The beach partially cloudy with Carolina Blue Skies is hard to put a fair tax rate on.
Right but my point was you cant actually LOSE the home, it can decrease in value sure, but you still own an asset. In stocks, its quite possible to lose everything and be left with nothing but a bitter taste in your mouth. I had a friend that worked for Winn Dixie and owned a sizeable amount of shares in them through their purchasing plan. They filed bankruptcy and restructured under a different name, this leaving him holding worthless paper.
LOL..and a piece of paper that is worthless. I still have my F. W. Woolworth stock certificate
This is kinda true. However, it doesn't mean you can't lose money in your home. When the bubble popped in my area, values plunged 70% over about 3 years. That's far worse than what stocks did, and home values will likely not recover for many years to come.
No investment is truly risk free, which is why it makes sense to spread your money around.
BUT! If you didn't buy too much of a house, AND didn't use it as an ATM, and didn't get a screwy mortgage -- you could have ridden out the housing bust. My house lost 75% of it's value, but my house payment was 460 bucks. I couldn't rent a cardboard box on a sidewalk out here for that. I didn't care of my house went to nothing -- my payment was great -- and going down because I got a straight 5/1 adjustable mortgage. And every time the rate changed -- it went down. It's now a 394 a month.
And the one year LIBOR is still hovering at .55, with my rate being LIBOR + 2.25%.
BUT! If you didn't buy too much of a house, AND didn't use it as an ATM, and didn't get a screwy mortgage -- you could have ridden out the housing bust. My house lost 75% of it's value, but my house payment was 460 bucks. I couldn't rent a cardboard box on a sidewalk out here for that. I didn't care of my house went to nothing -- my payment was great -- and going down because I got a straight 5/1 adjustable mortgage. And every time the rate changed -- it went down. It's now a 394 a month.
And the one year LIBOR is still hovering at .55, with my rate being LIBOR + 2.25%.
Could have ridden out the housing bust? Past tense? We are still riding around here.
Yes, you only realize the loss when you sell, so waiting can solve the problem. But, not everyone can wait a decade or so, for various reasons.
It's not among the highest tax states, but NC still has an income tax of nearly 6%. That's 6% more I have to earn in NC vs. TN/FL/TX, assuming all other things equal.
I live in Indiana - not what most people would consider a high tax state. I have to pay almost 4% in state income tax (roughly $120/month), another 1% to Hamilton County, IN ($30/month), and there are other miscellaneous taxes and feeds here that way higher than TN. TN has no county/state level earned income tax. Registering/tagging my Hyundai Elantra cost nearly $500 here - it was $31.50 out the door in TN. Simply going onto the premises of Brown County State Park is $5/visit - in TN, admission to a state park costs nothing. If you go once a week, that's a $20/month bill just to go to the park.
I don't think I get much for my tax dollar here, except at the municipal level, which is more of a function of Hamilton County's wealth (median HHI in Carmel is right around $100k) than the tax itself. We have a terrific municipal park system that is free, a walking track in a state of the art gym facility that is free (membership to use the facility and waterpark is only $35/month). Schools in most of Indiana are average to slightly below, crime in a lot of areas, particularly Indy proper, is as bad as TN. It just doesn't feel like I get any value for what I pay.
Sounds like living in Tennessee is a walk in the park.
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