Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions.
However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.
Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct.
The market may correct, but I firmly believe there won't be a crash. The reason is simple, equity.
Before 2008 people with no income could get liars loans and buy much more real estate than they could afford. We heard stories of cleaning ladies buying multiple million dollar homes. When home prices starting falling, the whole thing collapses like a house of cards because nobody had any equity. They couldn't sell and get out. We had cascading foreclosures creating a downward spiral.
Recently, prices have been surging. Given the laws passed after the Great Recession, appraisals and lending is highly restricted. Appraisals have not been keeping up with prices and lenders won't lend above appraised value. We sold a house in 2021 and in one day had 20 offers. Several of them had acceleration clauses stating they would pay more than anyone else up to $X. Both of them waived any financing contingency because they KNEW the house wouldn't appraise for what they were offering. They had to make up the difference with cash. Those people have a ton of equity in their homes. If they had to sell, they might take a haircut, but they aren't going to get foreclosed.
There is no house of cards here to come tumbling down.
And what investment will be safe and even benefit from it?
Assets, namely those as closely associated with the fundamentals of life. Food, water, shelter. And the "depression commodities"; sex, booze/drugs.
I do hope my question on investments was obvious rhetoricle to those commenting on commodities like @Carlos Ptriawan and @James Hamling - hope I’m not so poor on context that it wasn’t obvious I was referencing houses for us RE investors…. :)
If you invest in equity long enough ( I know you do ), you will invest in real estate/tech when the rate is low and during tightening policy you invest in commodities. If you open the stock chart comparing QQQ to CRB you will understand what I'm talking about.
It's for this very reason, at this Q3 2022, some natural-export country is having the highest economic growth and record the best inflation of 1%. China's CPI of 2% I guess it comes from the extreme US customer spending that James and you mentioned.
Ask XOM or FCX employee how happy there're at this current moment.
China controls their money more directly than even we do. It’s not the best example. Not to mention they are having massive issues within their economy wiping out fortunes and businesses. Real estate stories over there are hilarious.
....the wealthy buy what they want generally speaking already. There buying habits don’t necessarily change too much as income goes up or down. Double the income of those making $18k a year or add $10k a year to those making $50k-$60k a year - you better believe they spend it on new toys.
I don’t think it’s that simple. The equities markets roll into it what it predicts will happen. The two coming 0.75 percent spikes are already baked in.
There is never a bad time to invest in equities. I know this is a RE website but I actually max out 401k for me, my wife and max an HSA prior to doing anything else. Every single year. I think trying to out think the commodity Va equity is silly. Just do dollar cost averaging into an sp500 or total stock market Index. Add some bonds if you’d like. In my scenario, investing 48,000 yearly plus company match for 30 years will leave me with 8,000,000-14,000,000 at 60 vs 65 depending on the return . This assumes about 7-8 percent. So long story short, don’t overthink it.
Yeah, I do want the FED to go bankrupt. The Fed should be shut down. We should go back on the gold standard.
Fed going to the gold standard would mean everything would be flipped and broken. Would be horrendous.
One Senator last week drafted a bill asking the country to use the gold standard again.
It won’t get any support. There’s not even a feasible path to it.
Yeah, I do want the FED to go bankrupt. The Fed should be shut down. We should go back on the gold standard.
Fed going to the gold standard would mean everything would be flipped and broken. Would be horrendous.
One Senator last week drafted a bill asking the country to use the gold standard again.
Any economist would tell you it is not possible.
I think we all agree that 5-10 years from now real estate prices will be higher than they are today. People like James are betting that prices will go straight up, whereas I’m placing my wager (which I believe to be with odds in my favor - since no fed put) that housing will drop in the short term 12-18 months. Prices are already declining off the peak, so I feel like I’m playing with house money since I didn’t buy anything at peak prices.
I don’t think it’s that simple. The equities markets roll into it what it predicts will happen. The two coming 0.75 percent spikes are already baked in.
There is never a bad time to invest in equities. I know this is a RE website but I actually max out 401k for me, my wife and max an HSA prior to doing anything else. Every single year. I think trying to out think the commodity Va equity is silly. Just do dollar cost averaging into an sp500 or total stock market Index. Add some bonds if you’d like. In my scenario, investing 48,000 yearly plus company match for 30 years will leave me with 8,000,000-14,000,000 at 60 vs 65 depending on the return . This assumes about 7-8 percent. So long story short, don’t overthink it.
Agreed. Moral of the story goes back to the point @James Hamling brought up in posts early. Being wealthy means you are investing for long term and not spending all your income. If you can generate passive income while doing it all the better but the trick is to invest long term.
I don’t care whether you buy real estate or an index like S&P or QQQs. Even on real estate if the cash flow is very low after say a recession if you wait 20-25 years you will have made money.
Even this thread we aren’t arguing if people will make money but “how much” money the will make or if they could have made more in a different path. The reason why I say there is a kernel of truth in the joke that it’s always a good time to buy real estate - is because the reality is it is. People don’t invest in the first place which is why so much of america lives paycheck to paycheck - even 1/3 of those clearing $250k annually….
I think we all agree that 5-10 years from now real estate prices will be higher than they are today. People like James are betting that prices will go straight up, whereas I’m placing my wager (which I believe to be with odds in my favor - since no fed put) that housing will drop in the short term 12-18 months. Prices are already declining off the peak, so I feel like I’m playing with house money since I didn’t buy anything at peak prices.
Just curious, are you buy and hold? What’s it matter if it’s a few thousand different?
I think we all agree that 5-10 years from now real estate prices will be higher than they are today. People like James are betting that prices will go straight up, whereas I’m placing my wager (which I believe to be with odds in my favor - since no fed put) that housing will drop in the short term 12-18 months. Prices are already declining off the peak, so I feel like I’m playing with house money since I didn’t buy anything at peak prices.
@John Carbone guess we think a lot a like after all. I wrote essentially same post you wrote at same time.
And what investment will be safe and even benefit from it?
Assets, namely those as closely associated with the fundamentals of life. Food, water, shelter. And the "depression commodities"; sex, booze/drugs.
I do hope my question on investments was obvious rhetoricle to those commenting on commodities like @Carlos Ptriawan and @James Hamling - hope I’m not so poor on context that it wasn’t obvious I was referencing houses for us RE investors…. :)
If you invest in equity long enough ( I know you do ), you will invest in real estate/tech when the rate is low and during tightening policy you invest in commodities. If you open the stock chart comparing QQQ to CRB you will understand what I'm talking about.
It's for this very reason, at this Q3 2022, some natural-export country is having the highest economic growth and record the best inflation of 1%. China's CPI of 2% I guess it comes from the extreme US customer spending that James and you mentioned.
Ask XOM or FCX employee how happy there're at this current moment.
China controls their money more directly than even we do. It’s not the best example. Not to mention they are having massive issues within their economy wiping out fortunes and businesses. Real estate stories over there are hilarious.
China is one that can not be used or compared to anywhere else as any kind of basis of comparison. The construct of the Chinese government is of such that it's more a corporation then a country. Remember this is a country who killed tens of millions without a flinch because of political convenience. They are a whole different thing all together. If they decide it's in there interest, they will halve there currency value tomorrow, or double it, or direct 35 million to invade Taiwan with spears and rocks, they are a whole different thing. They do not fear there populous, don't fear economic swings, they just do what they want to. If China had a famine next year, I wouldn't be surprised if they executed 100m people to ease food demand. It is the definition of a controlled.
And at current pace, hope you teaching your grandkids Mandarin or Cantonese because there gonna need it.
I think we all agree that 5-10 years from now real estate prices will be higher than they are today. People like James are betting that prices will go straight up, whereas I’m placing my wager (which I believe to be with odds in my favor - since no fed put) that housing will drop in the short term 12-18 months. Prices are already declining off the peak, so I feel like I’m playing with house money since I didn’t buy anything at peak prices.
Just curious, are you buy and hold? What’s it matter if it’s a few thousand different?
Go back through a few pages. James wrote a Ying and Yang story, and I did one based on how I see things playing out. It ends up being a lot more than a few thousand dollars if I’m right with not a lot of risk if I’m wrong over next year. Risk adjusted, the money is on waiting at this point. Yes I buy and hold, never sell until I’m old.
And what investment will be safe and even benefit from it?
Assets, namely those as closely associated with the fundamentals of life. Food, water, shelter. And the "depression commodities"; sex, booze/drugs.
I do hope my question on investments was obvious rhetoricle to those commenting on commodities like @Carlos Ptriawan and @James Hamling - hope I’m not so poor on context that it wasn’t obvious I was referencing houses for us RE investors…. :)
If you invest in equity long enough ( I know you do ), you will invest in real estate/tech when the rate is low and during tightening policy you invest in commodities. If you open the stock chart comparing QQQ to CRB you will understand what I'm talking about.
It's for this very reason, at this Q3 2022, some natural-export country is having the highest economic growth and record the best inflation of 1%. China's CPI of 2% I guess it comes from the extreme US customer spending that James and you mentioned.
Ask XOM or FCX employee how happy there're at this current moment.
China controls their money more directly than even we do. It’s not the best example. Not to mention they are having massive issues within their economy wiping out fortunes and businesses. Real estate stories over there are hilarious.
China is one that can not be used or compared to anywhere else as any kind of basis of comparison. The construct of the Chinese government is of such that it's more a corporation then a country. Remember this is a country who killed tens of millions without a flinch because of political convenience. They are a whole different thing all together. If they decide it's in there interest, they will halve there currency value tomorrow, or double it, or direct 35 million to invade Taiwan with spears and rocks, they are a whole different thing. They do not fear there populous, don't fear economic swings, they just do what they want to. If China had a famine next year, I wouldn't be surprised if they executed 100m people to ease food demand. It is the definition of a controlled.
And at current pace, hope you teaching your grandkids Mandarin or Cantonese because there gonna need it.
@James Hamling agree on the first part of your post.
The second part of it, learning Mandarin, they said the same thing about my generation (millenial). While I somewhat agree i also think it’s played out a little bit.
I think we all agree that 5-10 years from now real estate prices will be higher than they are today. People like James are betting that prices will go straight up, whereas I’m placing my wager (which I believe to be with odds in my favor - since no fed put) that housing will drop in the short term 12-18 months. Prices are already declining off the peak, so I feel like I’m playing with house money since I didn’t buy anything at peak prices.
Just curious, are you buy and hold? What’s it matter if it’s a few thousand different?
Go back through a few pages. James wrote a Ying and Yang story, and I did one based on how I see things playing out. It ends up being a lot more than a few thousand dollars if I’m right with not a lot of risk if I’m wrong over next year. Risk adjusted, the money is on waiting at this point. Yes I buy and hold, never sell until I’m old.
I didn’t tackle it at the time - since i think it’s just a different in strategy - but your example had a few issues. For example you say principal pay down didn’t matter ($10k on my property over 18months) and sort of avoided showing the 18 months of cash flow.
Your scenario is low risk. However, I think it could be argued buying is too if managed correctly. Anyway i think either strategy works but did feel you left a few things out….
I think we all agree that 5-10 years from now real estate prices will be higher than they are today. People like James are betting that prices will go straight up, whereas I’m placing my wager (which I believe to be with odds in my favor - since no fed put) that housing will drop in the short term 12-18 months. Prices are already declining off the peak, so I feel like I’m playing with house money since I didn’t buy anything at peak prices.
Just curious, are you buy and hold? What’s it matter if it’s a few thousand different?
Go back through a few pages. James wrote a Ying and Yang story, and I did one based on how I see things playing out. It ends up being a lot more than a few thousand dollars if I’m right with not a lot of risk if I’m wrong over next year. Risk adjusted, the money is on waiting at this point. Yes I buy and hold, never sell until I’m old.
I didn’t tackle it at the time - since i think it’s just a different in strategy - but your example had a few issues. For example you say principal pay down didn’t matter ($10k on my property over 18months) and sort of avoided showing the 18 months of cash flow.
Your scenario is low risk. However, I think it could be argued buying is too if managed correctly. Anyway i think either strategy works but did feel you left a few things out….
In james’s story he was admitting that year 1 was bad for Ying but that it didn’t matter, so I assumed he meant would lose money, and I gave benefit of doubt that it was immaterial gains year 1. I did mention payoff and income immaterial year 1….he was talking about LTR which has low cap anyway so it kind of is immaterial.
I think we all agree that 5-10 years from now real estate prices will be higher than they are today. People like James are betting that prices will go straight up, whereas I’m placing my wager (which I believe to be with odds in my favor - since no fed put) that housing will drop in the short term 12-18 months. Prices are already declining off the peak, so I feel like I’m playing with house money since I didn’t buy anything at peak prices.
@John Carbone guess we think a lot a like after all. I wrote essentially same post you wrote at same time.
I never said straight up. Never said that, look back at everything I wrote, I said some step back in prices, with area/market specific variations in the - and + from that. I said NO CRASH, I still say no crash, last week, last month, last quarter and year I said NO CRASH. Variations, consolidation, yes, 100%. I even wrote projections of % for the step backs. I have said it will be a lot shorter then 18mnth in step back in pricing. I forecast gov. actions that pump up R.E. pricing in the next 6-probably 12 mnths but could be as far out as 18mnth. There WILL BE stimulus actions, I guarantee it. How it comes together, a 50yr mortgage maybe, I am not sure but without doubt they WILL pump up the market, that's 1,000% certain now.
Look at what they just tried to do with the Saudis. Yes, they are laser focused on pumping things up for elections. And I am betting this Nov will not go well for sitting incumbents, raising stakes on POTUS upcoming elections, adding even more pressure to pump things up. With Fed yelling back at them "WTF, look at inflation" I see it forcing hand of not real solutions but "fluff" solutions, like a 50yr mortgage. Things that make things "feel" cheaper, but actually do nothing to the real costs which, are not easily or readily mitigated or lowered.
THAT's what I have been saying the whole time. I am sticking to it.
I guess this is what differentiates regular passive investor and more active investors. For me, things like dollar cost averaging, maxing out 401k during bear market is "not that smart".
Better just take out all the money (buy low sell high), convert it to cash /CD/IBond with guaranteed 9% rate, and put it back to equity when Fed pivots. But when Fed tightens, all 1000% investment manager is taking out their equity investments into cash or buy protection.
If they don't do that, they will be fired and fried LOL
I think we all agree that 5-10 years from now real estate prices will be higher than they are today. People like James are betting that prices will go straight up, whereas I’m placing my wager (which I believe to be with odds in my favor - since no fed put) that housing will drop in the short term 12-18 months. Prices are already declining off the peak, so I feel like I’m playing with house money since I didn’t buy anything at peak prices.
@John Carbone guess we think a lot a like after all. I wrote essentially same post you wrote at same time.
I never said straight up. Never said that, look back at everything I wrote, I said some step back in prices, with area/market specific variations in the - and + from that. I said NO CRASH, I still say no crash, last week, last month, last quarter and year I said NO CRASH. Variations, consolidation, yes, 100%. I even wrote projections of % for the step backs. I have said it will be a lot shorter then 18mnth in step back in pricing. I forecast gov. actions that pump up R.E. pricing in the next 6-probably 12 mnths but could be as far out as 18mnth. There WILL BE stimulus actions, I guarantee it. How it comes together, a 50yr mortgage maybe, I am not sure but without doubt they WILL pump up the market, that's 1,000% certain now.
Look at what they just tried to do with the Saudis. Yes, they are laser focused on pumping things up for elections. And I am betting this Nov will not go well for sitting incumbents, raising stakes on POTUS upcoming elections, adding even more pressure to pump things up. With Fed yelling back at them "WTF, look at inflation" I see it forcing hand of not real solutions but "fluff" solutions, like a 50yr mortgage. Things that make things "feel" cheaper, but actually do nothing to the real costs which, are not easily or readily mitigated or lowered.
THAT's what I have been saying the whole time. I am sticking to it.
I guess this is what differentiates regular passive investor and more active investors. For me, things like dollar cost averaging, maxing out 401k during bear market is "not that smart".
Better just take out all the money (buy low sell high), convert it to cash /CD/IBond with guaranteed 9% rate, and put it back to equity when Fed pivots. But when Fed tightens, all 1000% investment manager is taking out their equity investments into cash or buy protection.
If they don't do that, they will be fired and fried LOL
I guess this is what differentiates regular passive investor and more active investors. For me, things like dollar cost averaging, maxing out 401k during bear market is "not that smart".
Better just take out all the money (buy low sell high), convert it to cash /CD/IBond with guaranteed 9% rate, and put it back to equity when Fed pivots. But when Fed tightens, all 1000% investment manager is taking out their equity investments into cash or buy protection.
If they don't do that, they will be fired and fried LOL
People can’t pick the right times to buy and sell. Generally dollar cost averaging beats most active players.
any money I don’t put into these accounts gets taxed at a very high rate and I lose my child tax credits/parts of them, given I have 5 kids if I don’t do this.
And what investment will be safe and even benefit from it?
Assets, namely those as closely associated with the fundamentals of life. Food, water, shelter. And the "depression commodities"; sex, booze/drugs.
I do hope my question on investments was obvious rhetoricle to those commenting on commodities like @Carlos Ptriawan and @James Hamling - hope I’m not so poor on context that it wasn’t obvious I was referencing houses for us RE investors…. :)
If you invest in equity long enough ( I know you do ), you will invest in real estate/tech when the rate is low and during tightening policy you invest in commodities. If you open the stock chart comparing QQQ to CRB you will understand what I'm talking about.
It's for this very reason, at this Q3 2022, some natural-export country is having the highest economic growth and record the best inflation of 1%. China's CPI of 2% I guess it comes from the extreme US customer spending that James and you mentioned.
Ask XOM or FCX employee how happy there're at this current moment.
China controls their money more directly than even we do. It’s not the best example. Not to mention they are having massive issues within their economy wiping out fortunes and businesses. Real estate stories over there are hilarious.
China is one that can not be used or compared to anywhere else as any kind of basis of comparison. The construct of the Chinese government is of such that it's more a corporation then a country. Remember this is a country who killed tens of millions without a flinch because of political convenience. They are a whole different thing all together. If they decide it's in there interest, they will halve there currency value tomorrow, or double it, or direct 35 million to invade Taiwan with spears and rocks, they are a whole different thing. They do not fear there populous, don't fear economic swings, they just do what they want to. If China had a famine next year, I wouldn't be surprised if they executed 100m people to ease food demand. It is the definition of a controlled.
And at current pace, hope you teaching your grandkids Mandarin or Cantonese because there gonna need it.
@James Hamling agree on the first part of your post.
The second part of it, learning Mandarin, they said the same thing about my generation (millenial). While I somewhat agree i also think it’s played out a little bit.
That's just my influences speaking. Family is South African, and holly cow it's like an invasion in Africa how the Chinese have come in and taken over. There doing it brilliantly too. Savagely but brilliantly. China is quietly taking over Africa, and the insane resource wealth of it.
I guess this is what differentiates regular passive investor and more active investors. For me, things like dollar cost averaging, maxing out 401k during bear market is "not that smart".
Better just take out all the money (buy low sell high), convert it to cash /CD/IBond with guaranteed 9% rate, and put it back to equity when Fed pivots. But when Fed tightens, all 1000% investment manager is taking out their equity investments into cash or buy protection.
If they don't do that, they will be fired and fried LOL
Too hard to guess when is right. Anyone that pulled out with CoVid, lost on record gains those first months of CoVid
I guess this is what differentiates regular passive investor and more active investors. For me, things like dollar cost averaging, maxing out 401k during bear market is "not that smart".
Better just take out all the money (buy low sell high), convert it to cash /CD/IBond with guaranteed 9% rate, and put it back to equity when Fed pivots. But when Fed tightens, all 1000% investment manager is taking out their equity investments into cash or buy protection.
If they don't do that, they will be fired and fried LOL
Too hard to guess when is right. Anyone that pulled out with CoVid, lost on record gains those first months of CoVid
Who would have pulled out during Covid? The government was handing out money and the fed was buying everything. It was the easiest market to be in.
On the flip side, if you stayed in the whole time until now, your gains are almost gone.
The reason why I say there is a kernel of truth in the joke that it’s always a good time to buy real estate - is because the reality is it is. People don’t invest in the first place which is why so much of america lives paycheck to paycheck - even 1/3 of those clearing $250k annually….
This is my own opinion. There's always a BAD TIME to invest in real estate.
When ? when there's an irrational activity, we just talked about irrational activity three hours ago.
In this area, there's a FOMO guy who bribed another FOMO guy to withdraw a contingent offer.
Luckily not all market has irrationality like that, James's market is still healthy LOL
I guess this is what differentiates regular passive investor and more active investors. For me, things like dollar cost averaging, maxing out 401k during bear market is "not that smart".
Better just take out all the money (buy low sell high), convert it to cash /CD/IBond with guaranteed 9% rate, and put it back to equity when Fed pivots. But when Fed tightens, all 1000% investment manager is taking out their equity investments into cash or buy protection.
If they don't do that, they will be fired and fried LOL
Too hard to guess when is right. Anyone that pulled out with CoVid, lost on record gains those first months of CoVid
I guess this is what differentiates regular passive investor and more active investors. For me, things like dollar cost averaging, maxing out 401k during bear market is "not that smart".
Better just take out all the money (buy low sell high), convert it to cash /CD/IBond with guaranteed 9% rate, and put it back to equity when Fed pivots. But when Fed tightens, all 1000% investment manager is taking out their equity investments into cash or buy protection.
If they don't do that, they will be fired and fried LOL
Too hard to guess when is right. Anyone that pulled out with CoVid, lost on record gains those first months of CoVid
Who would have pulled out during Covid? The government was handing out money and the fed was buying everything. It was the easiest market to be in.
On the flip side, if you stayed in the whole time until now, your gains are almost gone.
Fair, but when do you go back in? I’m 32 and have a long time horizon. It doesn’t really benefit me to be active.