Retirement

docwyte said:

In reply to ProDarwin :

Those were the right places.  La Jolla has never, ever gone down in value.  Edwards, just outside of Vail, has exploded in the last 25 years, Cape Cod, when I lived there, flew up in price. 

As they say, Location, Location, Location!

Yes... but do you know the right places to be the next 30 years?

I don't, or I would buy there.

In reply to frenchyd :

I'm still not understanding your losses. 

Your leveraged position should have left you with many more shares (worth much less), which would have enabled you to gain excessively when the market rebounded. 

Unless you sold when down...

ProDarwin said:

docwyte said:

In reply to Ian F :

If I'd been thinking in my 20's I would've bought land in Edwards when I lived in the Vail area.  Not sure how much my pizza tips would've bought, but it would've been worth it.  Same thing with buying rental properties in La Jolla when I was there for school.  Or buying a house immediately when I left dental school and was at my first military base.

I can tell you that unless the housing market is volcanically hot, I'll be advising my kids to buy property right away, not to wait.  Metric tons of money is what I'd have right now...

Property... in the right place.  *Most* places in the U.S. do not appreciate like that.  And in many areas with a lot of appreciation, the taxes will kill any gains you are getting on the property.  Its easier to invest in a REIT fund which will provide similarly low returns.  This is similar to saying "If I'd been thinking in my 20's I would have bought GOOG, AAPL, etc."

I plan on telling my kid(s) to avoid real estate for any investment purposes for the most part.  Possibly rent/airbnb some property, but make sure the numbers work out (they often do not).  If its not matching the market returns, don't bother with it.

You seem to forget that people need to live someplace. Food, Clothing, Shelter. 

So a portion of the cost of property is consumed by that. Then you have the leverage effect. If you put down 20% on say a $400,000 property you have to compare the return on  that to $ 80,000 invested at a 30 year average rate of return.  Really you’re comparing an $80,000 investment to a $400,000 investment. 

Real estate differs from investment in that no more is being made.  Highly desired real estate  as has been mentioned appreciates at a multiple of the rate of inflation.   Even ordinary real estate  appreciates at above the rate of inflation since in addition to  inflation there is demand. In my lifetime America has well more than doubled population.  

While Investments only return what management earns.  Past performance is no assurance of future performance.  Look at Sears Penny’s, Chrysler, GM, etc. all of them were major winners in the past and today are limping along. 

Any investment has risk, real estate among them. However, at least with real estate you meet one of your basic needs.  

SVreX said:

In reply to frenchyd :

I'm still not understanding your losses. 

Your leveraged position should have left you with many more shares (worth much less), which would have enabled you to gain excessively when the market rebounded. 

Unless you sold when down

 

Yes in  2008 I along with about 24 million people was laid off.  In order to retain my property I liquidated my remaining shares once all other sources of revenue was used up.  

Unlike most people my home was more than a financial transaction. I had approaching 30,000 man hours, my hours,  in building this place ( at that point ) I’m approaching 31,000 hours now.  

If I compare what that cash was worth compared to the market value of my house now, I made the right choice.  ( even excluding my time)  plus I’m living exactly where I’ve always wanted to live.  

Edit. Re-reading  you are asking about 1987.   No it was all lost  in the first few hours of the market drop.  

When you leverage like I was doing you don’t ever own a share you own an option on the share,  You are betting that the share will go up( ( buying long)  or down ( selling short). Normally there are stops in place to prevent massive losses, but I had gotten greedy and kept moving those to the point where they gave me no protection.   My excuse was that for 3 &1/2 years only rarely had they provided any protection  and they always seemed to limit my returns.  

Stupid greed. 

frenchyd said:

mazdeuce - Seth said:

For a lot of people my age, GenX 40's-ish, we seem to have significant life decisions that revolve around money. Did we borrow money for school and how much? When and where did we buy a house? Did we keep a job through the recession? Did we have money in the market going down or coming back up? Did a divorce/child support wipe you our for a while? Our life stories revolve around those choices/situations and their outcomes. 

Most of us look at where we are now and how we'll go into the next 40 years based on financial decisions. School isn't so much about learning as it is about payoff on investment. Houses are the same way, we're not buying our dream homes, we're trying to catch a rising asset. We were told to fully invest in our 401k's from the first day of our first job out of college and if we did so then a lot of us had as much or more than our parents invested when the market crashed. It feels like we're obsessed with money but I think we're obsessed with the security that money might bring it we can round up enough of it. Or the illusion of security. We look at our parents and grandparents retirements being funded by pensions, social security and massive gains in real estate and none of that looks available. The two generations before us are telling us to do things that they didn't have to so that we can end up in the same place. 

Pensions and SS were designed for a full working life. Show up, don't get fired, and someone else will tell you when it's ok to retire. If you don't have those things, if there is no formal schedule to retire on, then we start to fall into two groups. Those that have saved/been lucky and can check out when the numbers say regardless  of age, and those that don't have savings for whatever reason and are looking at death/disability to take them out of the work force. 

We're a generation of have/have nots as we start to think about retirements and much of that feels like dumb luck based on financial decisions we made in our 20's. 

Speaking strictly about money as security, there are some lessons your generation has to either learn for itself or accept the advice of those who have been through it.  

You really haven’t been through serious inflation.  Post Vietnam Baby boomers lived through up to 19% inflation annually.  President Ford walked around the Whitehouse wearing WIN  buttons ( whip inflation now )  his attempt to get the inflation caused by Vietnam under control. 

History will show that America never really pays it’s war debts rather we inflate our way to the point where the cost of the war becomes insignificant. We’ve done that since the revolution.  

America now has two wars to pay for plus a giant 1&1/2 Trillion dollar tax cut to pay for. Stand by.  

I agree with all of that. We're a small generation numbers wise, we don't vote as much as we should, and we're underrepresented by our peers in government. I think a lot of us are looking at the millenials to fix things through voting and becoming more involved. We always were a bunch of slackers. 

frenchyd said:

yupididit said:

"the greatest generation", Lmao no. 

That is the generation that survived the Great Depression, fought totalitarianism in world war 2, went to the Moon and made America  the  World power it is.  

I’ll call them our greatest generation. Why won’t you? 

I will not turn this thread into that. 

frenchyd said:

Unlike most people my home was more than a financial transaction. I had approaching 30,000 man hours, my hours,  in building this place ( at that point ) I’m approaching 31,000 hours now.  

That's 15 years of 40 hours a week.  I cannot get my head around that.  How on earth has it taken that long to build a home?

I tend to disagree with a lot of your points about a home being an investment.  In order for that to be true, the owner has to be ready to sell when the market is right.  I've been that guy, and I don't really want to do it again.  I will continue to add value to my house through maintenance and updates, so if I choose to downsize, I'll make a few bucks on the deal.  If a home owner is not interested in moving, a home is simply a cost avoidance measure against the sum of renting long term.  The caveat is that home ownership carries risks that renting does not.

bigeyedfish said:

frenchyd said:

Unlike most people my home was more than a financial transaction. I had approaching 30,000 man hours, my hours,  in building this place ( at that point ) I’m approaching 31,000 hours now.  

That's 15 years of 40 hours a week.  I cannot get my head around that.  How on earth has it taken that long to build a home?

I tend to disagree with a lot of your points about a home being an investment.  In order for that to be true, the owner has to be ready to sell when the market is right.  I've been that guy, and I don't really want to do it again.  I will continue to add value to my house through maintenance and updates, so if I choose to downsize, I'll make a few bucks on the deal.  If a home owner is not interested in moving, a home is simply a cost avoidance measure against the sum of renting long term.  The caveat is that home ownership carries risks that renting does not.

It really depends on what you want out of life.  For decades I sold equipment to people building a house in 2500-3000 man hours.  My equipment helped make that possible.  

Could you call this an art home?  Or Home as art?  Maybe it’s kraft work? It doesn’t matter. I hope I finish it at least by the day before they start digging my grave.  

The only reason I talk investment is for those who lack the soul to appreciate my vision and need to reduce everything to economic terms. 

However a home can be an investment  that will beat stocks when wisely selected and treated. Same as wise choice of stocks can beat a poor choice of home.  The difference is you can live without stocks but Shelter is a fundamental need. 

Now if you are talking liquidity, OK you have a point. 

In reply to frenchyd :

So, what you are saying is that you didn't even buy stocks, you shorted the market on options. 

That is well known as the riskiest behavior possible in the stock market. That's not investing, its gambling.

I applaud your recognition that you were foolish and greedy, but you are judging the ENTIRE stock market potential and performance based on the most extreme and risky sector.

Your mistakes would be difficult to reproduce for most people. 

For the record, I had investments in the market during the same period. It was scary. Paper losses were huge. My strategy was that I did absolutely nothing, and have recovered all of my money with sizable returns. 

The only thing I would change if I could do it again is that I should have been BUYING when the market was down, not sitting on my hands. 

"...for those who lack the soul to appreciate my vision..."

.                 --frenchyd

That has got to be one of the most arrogant, self-aggrandizing statements I have seen in any thread here.

​​​​​​

In reply to Ovid_and_Flem :

I just see a lot of beautiful black walnut trees chopped up in an unfinished box with window air conditioning units. 

I have no soul. 

Ovid_and_Flem said:

"...those that lack the soul to appreciate my vision..."

That has got to be one of the most arrogant, self-aggrandizing statements I have seen in any thread here.

​​​​​​

Especially considering his current circumstances. 

His first account got nuked, time for the 2nd one to as well?

In reply to SVreX :

Major Diet Coke spew alert!

SVreX said:

In reply to frenchyd :

So, what you are saying is that you didn't even buy stocks, you shorted the market on options. 

That is well known as the riskiest behavior possible in the stock market. That's not investing, its gambling.

I applaud your recognition that you were foolish and greedy, but you are judging the ENTIRE stock market potential and performance based on the most extreme and risky sector.

Your mistakes would be difficult to reproduce for most people. 

For the record, I had investments in the market during the same period. It was scary. Paper losses were huge. My strategy was that I did absolutely nothing, and have recovered all of my money with sizable returns. 

The only thing I would change if I could do it again is that I should have been BUYING when the market was down, not sitting on my hands. 

I started out with a safe conservative retirement account. A friend who was a broker showed me his approach and his returns. Very impressive so I did a paper follow for a couple of years.  At the end of that I put only $3000 in the minimum buy. In about a year and a half I was all in. The returns were great and I just kept it all in.   To be fair he told me  repeatedly to take some or even most of it out to be safe.  When it dropped if you remember it fell like a stone and by the time I heard about it everything was gone.  No ones fault but my own. 

I learned my lesson and invested in the Dow and did well for almost 20 years, actually beat my stock broker neighbor.  Except I had to sell just before the market bottomed.   So no I’m not judging the entire market by one event.  

frenchyd said:

bigeyedfish said:

frenchyd said:

Unlike most people my home was more than a financial transaction. I had approaching 30,000 man hours, my hours,  in building this place ( at that point ) I’m approaching 31,000 hours now.  

That's 15 years of 40 hours a week.  I cannot get my head around that.  How on earth has it taken that long to build a home?

I tend to disagree with a lot of your points about a home being an investment.  In order for that to be true, the owner has to be ready to sell when the market is right.  I've been that guy, and I don't really want to do it again.  I will continue to add value to my house through maintenance and updates, so if I choose to downsize, I'll make a few bucks on the deal.  If a home owner is not interested in moving, a home is simply a cost avoidance measure against the sum of renting long term.  The caveat is that home ownership carries risks that renting does not.

It really depends on what you want out of life.  For decades I sold equipment to people building a house in 2500-3000 man hours.  My equipment helped make that possible.  

Could you call this an art home?  Or Home as art?  Maybe it’s kraft work? It doesn’t matter. I hope I finish it at least by the day before they start digging my grave.  

The only reason I talk investment is for those who lack the soul to appreciate my vision and need to reduce everything to economic terms. 

However a home can be an investment  that will beat stocks when wisely selected and treated. Same as wise choice of stocks can beat a poor choice of home.  The difference is you can live without stocks but Shelter is a fundamental need. 

Now if you are talking liquidity, OK you have a point. 

My statement earlier came out a bit brash, so I'm sorry if that was offensive.  The rest of my response was speaking to the notion that a home is an investment.  It is; however, you can't look at your home's increased value in keeping with the local market and claim that as a great investment unless you are ready to sell it.  I could have sold my house for 5-10% more if I had been ready to sell a year earlier, but that doesn't matter.  Economically speaking, purchase price and sale price are what matter.  The ups and downs in the middle are meaningless.

Shelter as a fundamental need can be covered in a bit less than 30,000 man hours.  I've never seen your work, so the craftsmanship may well be remarkable.  I'm sure everyone on this board has projects that are not economically justifiable, bu you can't call hobbies or projects fundamental needs when they have far surpassed what is actually necessary.  I need a car to get to work.  I don't need a Corvette to get to work. 

I am speaking about things from an economic standpoint because this thread is about retirement, which for most people comes down to dollars and cents. 

Yes, but only considering purchase and sale price ignore mortgage interest, repairs, upgrades, property taxes. If I buy a house for $150k, and sell it 10 years later for $180k, sure that looks good. But that ignores everything inbetween.

Typically if something "costs you money" it's not really an "Asset/investment," but you do have to have somewhere to live.

SVreX said:

In reply to Ovid_and_Flem :

I just see a lot of beautiful black walnut trees chopped up in an unfinished box with window air conditioning units. 

I have no soul. 

Don't forget the Disney Castle like roof pitch

These 10 pages seem more like Comedy/Tragedy, than anything else.  It's turned into a diatribe on Real Estate.  

Very few have said that they are retired and happy.  I'm both.  I was lucky, that some of my moves worked out.   A lot didn't.......We invested heavily into our children's future, and it paid off.  We were successful, and proud.

If you can retire, trust me it's great.  If you can't, you have to stay employed.   Some may actually enjoy what they do, and it's not a grind.  That's great too.  That is life, good and bad.

Getting snarky with one another solves nothing, and is not constructive.

In reply to Dirtydog :

Good point...and even better perspective.

bigeyedfish said:

frenchyd said:

bigeyedfish said:

frenchyd said:

Unlike most people my home was more than a financial transaction. I had approaching 30,000 man hours, my hours,  in building this place ( at that point ) I’m approaching 31,000 hours now.  

That's 15 years of 40 hours a week.  I cannot get my head around that.  How on earth has it taken that long to build a home?

I tend to disagree with a lot of your points about a home being an investment.  In order for that to be true, the owner has to be ready to sell when the market is right.  I've been that guy, and I don't really want to do it again.  I will continue to add value to my house through maintenance and updates, so if I choose to downsize, I'll make a few bucks on the deal.  If a home owner is not interested in moving, a home is simply a cost avoidance measure against the sum of renting long term.  The caveat is that home ownership carries risks that renting does not.

It really depends on what you want out of life.  For decades I sold equipment to people building a house in 2500-3000 man hours.  My equipment helped make that possible.  

Could you call this an art home?  Or Home as art?  Maybe it’s kraft work? It doesn’t matter. I hope I finish it at least by the day before they start digging my grave.  

The only reason I talk investment is for those who lack the soul to appreciate my vision and need to reduce everything to economic terms. 

However a home can be an investment  that will beat stocks when wisely selected and treated. Same as wise choice of stocks can beat a poor choice of home.  The difference is you can live without stocks but Shelter is a fundamental need. 

Now if you are talking liquidity, OK you have a point. 

My statement earlier came out a bit brash, so I'm sorry if that was offensive.  The rest of my response was speaking to the notion that a home is an investment.  It is; however, you can't look at your home's increased value in keeping with the local market and claim that as a great investment unless you are ready to sell it.  I could have sold my house for 5-10% more if I had been ready to sell a year earlier, but that doesn't matter.  Economically speaking, purchase price and sale price are what matter.  The ups and downs in the middle are meaningless.

Shelter as a fundamental need can be covered in a bit less than 30,000 man hours.  I've never seen your work, so the craftsmanship may well be remarkable.  I'm sure everyone on this board has projects that are not economically justifiable, bu you can't call hobbies or projects fundamental needs when they have far surpassed what is actually necessary.  I need a car to get to work.  I don't need a Corvette to get to work. 

I am speaking about things from an economic standpoint because this thread is about retirement, which for most people comes down to dollars and cents. 

I happen to agree with nearly everything you said. And as it turns out my attempt at brevity offended a number of people. I’m not sure what word or few words would describe  something done out of love and a need to create.  

Something that conveys the security I felt in my grandfathers timberframed barn as the winds blew and the rain poured down. Something that portraits the durability and timelessness of European timber frames.  How can I explain the pleasure of neatly fitting in the last piece of stone like a key in a lock? 

30,000 hours of effort which is more than 10 times what most homes take but done that way because each completed part with rewards me with satisfaction and contentment. 

So the word soul offends? please tell me how say day that briefly.  

It is not the word, but the context in which it was applied that is offensive. I'll be honest William, I am really close to sending you a ban warning. Your participation on the forums lately has been aggravating the populace. Consider taking a break for a while.

Ovid_and_Flem said:

"...for those who lack the soul to appreciate my vision..."

.                 --frenchyd

 

That has got to be one of the most arrogant, self-aggrandizing statements I have seen in any thread here.

​​​​​​

If your offended by my attempt at brevity  I apologize. How do I convey that each one of those 30,000 plus hours of work provided  me with joy and pleasure. Yes I realize that’s more than 10 times the normal work period it takes to build a home.  ( and I expect it will take another 8000 hours yet before I’m satisfied with it). 

Nothing was redone, started over, or done shoddy.  Plus I had access or owned every single piece of equipment or machine tool needed to do this whole thing quickly.  Cranes,  telehandlers, forklifts, manlifts, scaffolding, timber framing tool, wood working machinery, masonry equipment, hand tool,  power  tool or safety equipment. 

I’m happy to have used 2 band-aides as the only required medical attention.  Well yes I did use a Twizzers a few times to pull splinters. 

How do I explain the art of combining a European Timberframebwith the strength  of an American timber-frame? The pleasure of carving out a mortise pocket and having the tenon  slide in place like a hand slides into a well worn glove.  

Can you help me convey the security I felt  as a kid growing up looking up at the Timbers in a barn built before the civil war knowing that nothing had worn out or broken. In more than a century. Climbing  over the Timbers tapping a tapered peg in or out according to the seasons understanding that connection was stronger than any nail or bolt.  

 Explain what words you’d use to express that briefly and I’ll use them rather than offend you. 

ProDarwin said:

docwyte said:

In reply to ProDarwin :

Those were the right places.  La Jolla has never, ever gone down in value.  Edwards, just outside of Vail, has exploded in the last 25 years, Cape Cod, when I lived there, flew up in price. 

As they say, Location, Location, Location!

Yes... but do you know the right places to be the next 30 years?

I don't, or I would buy there.

Sure I do.  I just don't have the money to execute right now.  If you do, buy in San Francisco (almost anywhere in the city), Boulder Colorado (City has a no growth law in place) and the beach communities in San Diego.  So La Jolla, Del Mar, Cardiff by the Sea, etc. 

When the real estate market crashed, those areas sagged a percentage point or so.  Then kept on blasting through the roof as things recovered.

In reply to frenchyd :

I'm not offended. I just found your choice of words to be condescending to the many souls here. I have enough soul to appreciate what you did with the black jack special and complimented you on it. I have no doubt that I would be comparably impressed with your house knowing that it was a dream you have had at least since your Vietnam years. If you would just figure out how to post some pics.

Brevity?  Why start now?

docwyte said:

 

Sure I do.  I just don't have the money to execute right now.  If you do, buy in San Francisco (almost anywhere in the city), Boulder Colorado (City has a no growth law in place) and the beach communities in San Diego.  So La Jolla, Del Mar, Cardiff by the Sea, etc. 

When the real estate market crashed, those areas sagged a percentage point or so.  Then kept on blasting through the roof as things recovered.

If I were in the market for an investment property, I would not buy in San Francisco right now. It's a "past performance is no guarantee of future performance" thing - real estate there has had a massive runup in the last few years that looks awfully like the dot-com boom to me. Silly Valley and SF is a boom/bust cycle place and I don't see that boom going on for that much longer.

Companies have started relocating from the Bay, or didn't relocate to the Bay (which used to be a major requirement to get VC funding and to an extent, still is) in the first place.

Oh, and they've had a massive condo building boom with a lot of that inventory schedule to come on the market in the next couple of years. That should ease some of the supply pressures.