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All Forum Posts by: Paul Vail

Paul Vail has started 6 posts and replied 189 times.

Post: So my father just retired at 55 and recently got 100k

Paul VailPosted
  • The Triangle, NC
  • Posts 189
  • Votes 117
Quote from @Chris Breezy:

Not being real estate, what’s his best move with this money. With his retirement he is comfortable to live but he’s trying to really use this to his advantage. He asked me and I didn’t have a great answer so I’m here.


initially I thought put it right in index funds that are low currently but then I thought maybe starting a Roth IRA for him or his wife who still works might be better since after 59 1/2 it will be tax fee. Thoughts , ideas will be appreciated


One final thought -- when I retired at 50, I was bored out of my mind after the home repairs and honey-do list was completed.  I actually get satisfaction working in some capacity.  How will 'retirement' sit with Dad?  Will he do what I did -- go get a job at the local hardware store just to do something?   I found working as a minion in the retail world very educational -- how poorly they are paid and treated by corporate, and the obtuse entitled rudeness from customers who are also neighbors.  Also how lazy some are and the high-school mentality from coworkers and some managers.   Kind of remarkable companies can exist.   Nonetheless, it was informative, the company offered great benefits for the paltry wages, and I got satisfaction doing a good job.   How well will your Dad adjust to his new dynamic?   If he elects to go back to work even part-time, now he can funnel money into the Roth with earned income for both him and the missus up to the allowable for his earnings and the law.

Post: So my father just retired at 55 and recently got 100k

Paul VailPosted
  • The Triangle, NC
  • Posts 189
  • Votes 117
Quote from @Chris Breezy:

Not being real estate, what’s his best move with this money. With his retirement he is comfortable to live but he’s trying to really use this to his advantage. He asked me and I didn’t have a great answer so I’m here.


initially I thought put it right in index funds that are low currently but then I thought maybe starting a Roth IRA for him or his wife who still works might be better since after 59 1/2 it will be tax fee. Thoughts , ideas will be appreciated


Chris, another consideration is healthcare.  Does Dad have coverage?  If not, will he and the missus go for a HDHP?  If so, explore HSA-qualified plans.  I've used one for years -- many, many investment advantages: like the Roth, all earnings are tax-free for life and there are maximum contribution limits.  Also, one can have the account as a savings account earning modest interest, or as a combination with an investment account to invest in a variety of the usual paper assets.   I've never heard of a self-directed HSA for real estate uses, so that might just be in the Roth realm.   HSA money is instantly available (all of it) for qualified medical expenses (medical office visits for doctor, dentist, optical, mental health; prescriptions for most meds, procedures, even Medicare premiums when he gets there).   All contributions are tax-deductable -- big advantage that --.  And HDHP usually come with far lower premiums than the over-sold full plans out there.   All depends on the math of what is typically spent on healthcare any given year to determine the best play there.

Post: Mental Excercise/Game - You have one month to make $5000

Paul VailPosted
  • The Triangle, NC
  • Posts 189
  • Votes 117
Wow -- that's a tough situation without enough information.  What is the living situation, what are your skillsets or education, and how are you feeding yourself, making any recurring bills?  Presumably you don't even have a cell phone or computer.  Here in the States, our unemployment is still very very low so jobs are available just about everywhere.  Picking up a job or three is not hard.  Retailers like Lowe's hardware will hire nightstock for $15/hr.  With a month, let's pretend that is 40hrs x4.3, that would only get you to $2580 before taxes.  However, Bank of America is hiring at $25/hr, so that could be $4300.  Combine the two and you'd be there after taxes.

As for resources, since your homeless encampment or abandoned VW bus or the men's shelter is next to the public library and the YMCA, you have access to public computers.  A free google gmail account and google voicemail account has at least ways to communicate, text and have a voicemail box for communicating.  That gets you to facebook's BuyNothing group for your area, plus Freecycle.  In your copious amounts of spare time, you accept everything within walking distance.  As off-cast cell phones come up hourly while your neighbors do their annual upgrade, you can have something personal with a camera and wifi (which works from the library, public stores and many other locations 24/7), you can open that ebay account and craigslist to sell off your freebie items gathered from society's refuse.  

Uncomfortable, but not undoable.

Post: Looking for a tax strategist / CPA!

Paul VailPosted
  • The Triangle, NC
  • Posts 189
  • Votes 117
Have you joined your local REIA and asked there?  Also, most states have a certification board -- reach out to them to see if there's a list of CPAs in your area.   Start calling them and asking who in their circles concentrates on RE.

Post: So my father just retired at 55 and recently got 100k

Paul VailPosted
  • The Triangle, NC
  • Posts 189
  • Votes 117
Quote from @Bruce D. Kowal:

Leave New York State and move to Florida.


 Sadly, looks like greater Tampa is going to have some desperate sellers coming into the market this weekend, with possible repairs needed.    Florida, be safe and get out now.  There's nothing that can't be replaced except your lives.

Post: FED finally admits we're in for a correction. Thoughts?

Paul VailPosted
  • The Triangle, NC
  • Posts 189
  • Votes 117
Quote from @Carlos Ptriawan:
Quote from @Paul Vail:
Quote from @Carlos Ptriawan:
Quote from @Paul Vail:
Quote from @Nathan Gesner:

https://www.ksl.com/article/50...

I'm no smarter than the next guy and nobody knows the future. But my common sense tells me you can't increase housing prices 50% or more in two years and expect them to stay there. I predict we'll see prices drop 20-25% from their peak in many markets.

Thoughts?



 Considering this graph, does it mean :
a) the house appreciation that we have today is too low compared to CPI, or
b) the CPI is just running too fast ?  or
c) housing is no longer a safe hedge against CPI/inflation ?

Which one is true ?

C.    We are bubbleliscous at the moment.  Interpret the graph as indicating we go through cyclical valuations of real estate normalized against inflation.  Occasionally these value get out of whack, just like P/E valuations of equities.  Corrections are inevitable as they normalize the markets.  And in most cases, housing valuations fall back to norms at the onset of recessions.  Cause and effect are not established, but the correlation is undeniable.  

 I took another look  at the chart , and my summary is the following :

- Rent/Shelter increased dramatically and contributed to  CPI since 2020 ONLY (Please see the first chart below)
Case in point here : https://www.whitehouse.gov/cea...   if shelter was 5% pre-covid, after covid it's like 18%

What does it mean:
For renter, they're living in inflationary phase

BUT For homeowner and landlord like us, we actually living in deflation as our cost is fixed , since we;re have our own 30 YFRM which is mostly between 2.5-4%. 

- As always , it's proven again and again that real estate could be a hedge againts inflation but recently it also showing
that real estate, since 2020, could be the source of inflation too as rent rise dramatically.

...AND....

-it just proves that era of high inflation (1970-80) and cheap money policy (2006-2020), real estate is appreciating twice than the inflation, which is expected.


There seems to be some confusion as to what the graph depicts.  The green curve is the CPI-adjusted median price of a home.  Various factors go into the peaks off of the average (speculation, supply/demand pressures, loan interest and inflation rates), but note that economically the pricing will need to revert to the norm at some point.

Post: FED finally admits we're in for a correction. Thoughts?

Paul VailPosted
  • The Triangle, NC
  • Posts 189
  • Votes 117
Quote from @Carlos Ptriawan:
Quote from @Paul Vail:
Quote from @Nathan Gesner:

https://www.ksl.com/article/50...

I'm no smarter than the next guy and nobody knows the future. But my common sense tells me you can't increase housing prices 50% or more in two years and expect them to stay there. I predict we'll see prices drop 20-25% from their peak in many markets.

Thoughts?



 Considering this graph, does it mean :
a) the house appreciation that we have today is too low compared to CPI, or
b) the CPI is just running too fast ?  or
c) housing is no longer a safe hedge against CPI/inflation ?

Which one is true ?

C.    We are bubbleliscous at the moment.  Interpret the graph as indicating we go through cyclical valuations of real estate normalized against inflation.  Occasionally these value get out of whack, just like P/E valuations of equities.  Corrections are inevitable as they normalize the markets.  And in most cases, housing valuations fall back to norms at the onset of recessions.  Cause and effect are not established, but the correlation is undeniable.  

Post: FED finally admits we're in for a correction. Thoughts?

Paul VailPosted
  • The Triangle, NC
  • Posts 189
  • Votes 117
Quote from @Nathan Gesner:

https://www.ksl.com/article/50...

I'm no smarter than the next guy and nobody knows the future. But my common sense tells me you can't increase housing prices 50% or more in two years and expect them to stay there. I predict we'll see prices drop 20-25% from their peak in many markets.

Thoughts?


Post: FED finally admits we're in for a correction. Thoughts?

Paul VailPosted
  • The Triangle, NC
  • Posts 189
  • Votes 117
Quote from @Carlos Ptriawan:
Quote from @JD Martin:
Quote from @Carlos Ptriawan:


 At its base level, government is not created for its people to have jobs. The most basic premise for a government is to protect (ideally, in this order) the life, property and basic rights of existence of its citizens. That's it. Everything else that comes beyond that - and plenty should, in a

If gov want to protect life, property, and basic right then everyone should have a job. Without job there's no tax,social security,etc,etc,etc

I always have disagreements when someone said having higher unemployment is better, especially if that comes from the government.


I don't disagree with that premise - that lack of all of those things is destabilizing - but that frame of thought is relatively new in the history of governance, and especially new in the United States.

 What makes this funny is ..... it seems Senator Elizabeth Warren is agree with me on Job and Fed. This is her twitter :



Fed Chair Powell seems determined to push the economy over a cliff—even after he admitted rate hikes won’t lower key prices.

Destroying jobs and crushing wages of millions of workers is reckless and dangerous.

Recession is not the solution to inflation.


 We had free/ cheap money for far too long.  Now, we pay for it.  This is Econ 101.  Powell tried to put the brakes on sensibly in 2018 and 19.  Trump bullied him out of it.  Covid finished and sense of remaining sanity.  We need to pay our debts. Now.

Post: FED finally admits we're in for a correction. Thoughts?

Paul VailPosted
  • The Triangle, NC
  • Posts 189
  • Votes 117
Quote from @Greg Scott:
The retiree can thank Washington DC for hurting their retirement, due to high inflation.
The person working minimum wage can thank Washington DC for dramatically devaluing their quality of living due to high inflation.
Now the Middle Class and Upper Class, who experienced gains from asset inflation, will get to feel some pain
I'm not sure anyone wins with these sorts of economic swings, except maybe the politicians

 Voters have been electing liars for decades on voodoo economic plans.  Tax-cut-and-spend to prosperity?  Reaganomics?  Remove Glass Steagall in the 90s and not expect 2009?  Endless bailouts from W and Obama?  That joke of a tax reform by Trump?  Free money for the last 20 years?  Covid bailouts by Trump and Student loan bailouts by Biden?   Blame the face in the mirror if this housing bubble or the inflation correction comes as a ‘surprise’.