patrick.net

Bigsby says

That wasn't the point. It was a rhetorical question. I couldn't care less what you are doing.

Then don't ask the question. Asking a rhetorical question is lost in email communication. Even face-to-face most times it doesn't work.

Bigsby says

Really? Every single person I know in the area goes travelling and they've nearly all bought in the last ten years. Do you see how generalising works?

Not in the SFBA proper. Ask around.

RentingForHalfTheCost says

Bigsby says

Really? Every single person I know in the area goes travelling and they've nearly all bought in the last ten years. Do you see how generalising works?

Not in the SFBA proper. Ask around.

Except most of my friends live in that area...

RentingForHalfTheCost says

Bigsby says

That wasn't the point. It was a rhetorical question. I couldn't care less what you are doing.

Then don't ask the question.

And you can think about the point I was making.

RentingForHalfTheCost says

Also, my point is that if I extended myself to buy in the SFBA like most,
then I wouldn't be able to travel. I would need to work full-time all the time
just to cover the costs which are over double what I pay now. I am not saying
everyone is like that. If you own and can travel then amazing. Most SFBA people
buying now or anytime in the past 10 years can't.

My travel habits have stayed the same in owning as in renting. Average 2 long vacations per year to foreign countries with each vacation averaging between 9-10 nights each. Additionally, every year take domestic side trips. My constraint on travel is vacation time that I can accrue from work not rent/own. I will be eligible for an additional week of vacation in 2015 and will definitely utilize it.

Bigsby says

RentingForHalfTheCost says

Bigsby says

That wasn't the point. It was a rhetorical question. I couldn't care less what you are doing.

Then don't ask the question.

And you can think about the point I was making.

You can have your view, as I can have mine. That is what makes us original. I stand by what I said.

dublin hillz says

RentingForHalfTheCost says

Also, my point is that if I extended myself to buy in the SFBA like most,

then I wouldn't be able to travel. I would need to work full-time all the time

just to cover the costs which are over double what I pay now. I am not saying

everyone is like that. If you own and can travel then amazing. Most SFBA people

buying now or anytime in the past 10 years can't.

My travel habits have stayed the same in owning as in renting. Average 2 long vacations per year to foreign countries with each vacation averaging between 9-10 nights each. Additionally, every year take domestic side trips. My constraint on travel is vacation time that I can accrue from work not rent/own. I will be eligible for an additional week of vacation in 2015 and will definitely utilize it.

That is the difference. Only because I stayed a renter have I been able to take leaves from work, transitions to other jobs, and downright sabbaticals for months on end. I am not talking about the traditional 2-4 weeks/year. I've been there and done that, but now I enjoy a lifestyle as a renter. I am not saying every renter is in this boat, but I am. For me there is a big difference. The flexibility of just getting up and moving for a few months is awesome. I have done it a few times now and don't want to give that up for anything, especially decaying wood and nails that has everyone doing orgasms about virtual wealth.

robertoaribas says

RentingForHalfTheCost says

Only because I stayed a renter have I been able to take leaves from work, transitions to other jobs, and downright sabbaticals for months on end. I am not talking about the traditional 2-4 weeks/year. I've been there and done that, but now I enjoy a lifestyle as a renter.

I spent a cumulative year in thailand, 3 months in china and 2 months in brazil over the past 15 years as an owner... gotta love summer break, the month off at christmas!

Now that is what I am talking about. That is the goal, if you can get there any way, then do it. I get there my way. If I had bought off the county steps at the bottom then I might have been able to keep it, but I didn't. I use my job and investments to keep it moving. Eventually the purchase of a house will be an afterthought financially, even for the SFBA. I will not risk my lifestyle to get there though. Just me.

And the gifts keep giving. How is that hot water heater doing?

http://www.reuters.com/article/2013/05/24/procterandgamble-brief-idUSWEN0094Q20130524?type=companyNews&feedType=RSS&feedName=companyNews&rpc=43

donjumpsuit says

dublin hillz says

don't believe that renting in SFBA can accomplish this objective for most folks. A decent 2 BD apt goes for $2300 at least nowadays. A decent single family home is close to $3,000 at least if not more.

There is a little sensationalism in these prices, huh?

I rent a 3/2 for $1900. I can find another for between $1800 to $2300 in a heartbeat.

I share with two others, so my rental cost is actually ~$700

Shh, don't tell the owners that if you look around rents are more than reasonable. We need people to overpay for housing so the rental market stays so cheap relative to owning. Keep it on the down low.

BUY BUY BUY people. Don't worry about the math.

dublin hillz says

I don't get why these arguments get so intense, especially between landlording and investing in equities. They have different risk/reward profiles, different volatilities, different long term expected rates of return and different avenues for leverage. It's like arguing whether stocks or bonds are better investments. Maybe we should bring in 3 game parlays - pays 6:75 to 1. What does that annualize to?

Where are you getting +675 on 3 team parlays??

Traditionally, locals use 5:1, because locals tend to utilize their costumer bases inability to shop around for anything better (typical of black markets)

Most internet shops offer 6:1, because they need a draw, and that's much closer to the mathematical odds payout of 3 wagers @ -110 each

I've found that using fractional Kelly staking system, in a good season one could expect north of 20% annual returns

robertoaribas says

donjumpsuit says

There is a little sensationalism in these prices, huh?

I rent a 3/2 for $1900. I can find another for between $1800 to $2300 in a heartbeat.

I share with two others, so my rental cost is actually ~$700

an owner can do the same. my mortgage is $1175 a month, but two cousins and one of their girlfriends live here too. they pay $480 a room... So my net mortgage is a negative number! [well, including internet, utilities, pool service, I actually pay a very small amount to live here]

A mortage payment of $1175/mth will get you a 1sqft waiting spot at a bus stop in the SFBA. You'll probably have to present the title each morning to roll away the homeless people that have setup shop. And that obviously doesn't include the 12K taxes and $850/mth HOA for cutting the small piece of grass 4 miles away from your home once a week. All is good in the SFBA.

robertoaribas says

Call it Crazy says

Now that's funny.... You think you're such a big shot, yet you have to taken in boarders so you can pay your bills... what a joke....

I didn't like living alone. I can easily handle my mortgage with nobody helping, you are the only person so stupid as to try to turn that into an insult.

Not the only. I was kinda thinking the same. ;) Just didn't have the heart to hit you on it.

RentingForHalfTheCost says

At the rate so far this year, my stocks have appreciated enough to cover 5 years rent. Sucks I missed the big real estate hoopla that everyone is talking about. I feel horrible not listening to all the real estate bulls around here.

Let's do the math. If your rent is $2,000/month, then 1 year's rent is $24,000. So, (assuming no increases - I know, your rent never increases) five years rent would be $120,000. The DJIA is up just over 17% this year, but we will say 20% to make the math easier. If a 20% return on your portfolio = $120,000, then you started the year with a portfolio of $600,000 fully invested in the stock market, and it rose in line with the stock market (big assumption). Also, we need to assume that you didn't sell any covered calls, because then you would have missed most of the appreciation, and that you had none of your money invested in gold (which in previous threads you claimed was why you got the market beating returns you did). And, you didn't have your money in MCD, because that was only up 14%. And, of course, none of this includes taxes assuming you sell to lock in games.

Anyway, good for you if you had $600K allocated perfectly to capture the entire rise of the stock market this year, but it's hardly a realistic prescription for most people.

RentingForHalfTheCost says

dublin hillz says

RentingForHalfTheCost says

At the rate so far this year, my stocks have appreciated enough to cover 5 years rent. Sucks I missed the big real estate hoopla that everyone is talking about. I feel horrible not listening to all the real estate bulls around here.

Congrats, but it ain't official till you sell and lock in the winnings . . . .

True, sold 1/4 of my holdings at 24 today. Staying long with the rest. Another run and I'll just be playing with the houses money, which is the best way!

Sold what at 24?

housing after taking into consideration taxes, maintenance ..etc was usually giving 8% to 12% in most areas. in bay area , it was mostly 8%. and this was in 2011. now its lower.

best case math in bay area : 300k condo generating $2000 income which is equivalent to 8% return without maintenance and property tax. If i include that , returns are lower.
I don't think pure cash flow investment in bay area was ever a good idea.
Most of the investment here is speculative and for capital appreciation.

Stocks are more liquid and might actually generate more returns than 8% for some time to come. easy to sell and low maintenance.

JFP says

Anyway, good for you if you had $600K allocated perfectly to capture the entire rise of the stock market this year, but it's hardly a realistic prescription for most people.

True, because most people take the bait and buy into overpriced housing. With mortage, taxes, insurance, upkeep, it is very hard to sock any money away and play the market. I've had 10 years of renting savings plus 5 year of house owning appreciation. Lets just say I play with more than 600K so your numbers are close but I never fully invest in the market. Also, I have been able to fully funnel all my savings into a ROTH IRA so I am not taxed on gains. Nice! There are ways to sock over 50K into a Roth IRA each year for those inclined. Not many owners have 50K to play with unfortunately. They rely on house appreciation which is fine and has played well, but me, I just don't trust it.

BTW, my rent is $3k/mth so you can adjust the math. Nice last couple years sitting out the real estate hype around here. I hope it continues with the help of the free money market. Although, I have been slowly unwinding my market percentage, so I doubt I'll get the same gains. I'm happy just taking the money and waiting at this point. Back to looking for just 6%/yr and waiting for some big downswings.

chanakya4773 says

housing after taking into consideration taxes, maintenance ..etc was usually giving 8% to 12% in most areas. in bay area , it was mostly 8%. and this was in 2011. now its lower.

Stocks are more liquid and might actually generate more returns than 8% for some time to come. easy to sell and low maintenance.

Or, you could have bought REITs. Get the best of both worlds recently :)

There's really two different scenarios - primary residence and investment real estate. Given the available leverage and the fact that you have to pay for housing anyway, it's easy to make the argument for buying a primary residence in the bay area. Investment real estate in the bay area is a harder argument to make.

JFP says

here's really two different scenarios - primary residence and investment real estate. Given the available leverage and the fact that you have to pay for housing anyway, it's easy to make the argument for buying a primary residence in the bay area. Investment real estate in the bay area is a harder argument to make.

I agree with you. since you have to pay for rent anyways, for primary residence, the comparison should be with rent. is it cheaper to rent vs buy.

for investment , you have to compare with returns from other markers as well. housing didn't fare well in that regard ( cash flow). capital appreciation was anybody's guess so that was pure luck and luck is not a strategy.

RentingForHalfTheCost says

True, because most people take the bait and buy into overpriced housing. With mortage, taxes, insurance, upkeep, it is very hard to sock any money away and play the market. I've had 10 years of renting savings plus 5 year of house owning appreciation.

Actually, if you do the math for most people, owning comes out cheaper than renting. But, regardless, most people cannot build up a portfolio of $600K even if they rent. Never mind the $900K you are now claiming (just for the portion invested int the stock market) based on $3k/month rent.

Anyway, I don't know why I indulge your fantasy investing track record. I did the math for you in a previous thread and pointed out how unrealistic your claimed returns were.

JFP says

RentingForHalfTheCost says

dublin hillz says

RentingForHalfTheCost says

At the rate so far this year, my stocks have appreciated enough to cover 5 years rent. Sucks I missed the big real estate hoopla that everyone is talking about. I feel horrible not listening to all the real estate bulls around here.

Congrats, but it ain't official till you sell and lock in the winnings . . . .

True, sold 1/4 of my holdings at 24 today. Staying long with the rest. Another run and I'll just be playing with the houses money, which is the best way!

Sold what at 24?

25% of my Cisco holding that I have been collecting for quite some time. Last I checked my average cost was in the mid teens (16 or so). I have actually been accumulation just for the dividend, but shit, moves like this must be appreciated and sold into.

RentingForHalfTheCost says

Also, I have been able to fully funnel all my savings into a ROTH IRA so I am not taxed on gains. Nice! There are ways to sock over 50K into a Roth IRA each year for those inclined.

So, how do you use the money if it's stuck in a ROTH? If you take it out don't you have to pay taxes on the appreciation, and a 10% penalty for taking it out early?

JFP says

RentingForHalfTheCost says

Also, I have been able to fully funnel all my savings into a ROTH IRA so I am not taxed on gains. Nice! There are ways to sock over 50K into a Roth IRA each year for those inclined.

So, how do you use the money if it's stuck in a ROTH? If you take it out don't you have to pay taxes on the appreciation, and a 10% penalty for taking it out early?

The Roth IRA you pay taxes already on the contribution and then don't pay taxes again on neither the contribution (already taxed) or the appreciation (tax free). That is the beauty. Tax fee earnings! There are rules for withdrawing the contribution part if you need, and there are also cases where you will not be hit with a penalty to withdraw under hardships. I don't ever plan to use either, but good to know I can in case.

I don't think there is a better form of investing for yourself over a Roth IRA.

RentingForHalfTheCost says

25% of my Cisco holding that I have been collecting for quite some time. Last I checked my average cost was in the mid teens (16 or so). I have actually been accumulation just for the dividend, but shit, moves like this must be appreciated and sold into.

In order for your average price to be 16, you would have had to buy all your stock in February 2009, July-September 2011, or July 2012. If you bought at any other time, you would be well above 16. My guess: you will claim to have perfectly timed it.

RentingForHalfTheCost says

I don't think there is a better form of investing for yourself over a Roth IRA.

I like Roth's myself, but it's not a good place to put money you intend to spend on rent.

JFP says

RentingForHalfTheCost says

25% of my Cisco holding that I have been collecting for quite some time. Last I checked my average cost was in the mid teens (16 or so). I have actually been accumulation just for the dividend, but shit, moves like this must be appreciated and sold into.

In order for your average price to be 16, you would have had to buy all your stock in February 2009, July-September 2011, or July 2012. If you bought at any other time, you would be well above 16. My guess: you will claim to have perfectly timed it.

Dude, I bought some in the $10 range in 2002 I think, not sure what you are talking about. I have accumulated from my original position over the last 2 years and glad I did.

JFP says

RentingForHalfTheCost says

I don't think there is a better form of investing for yourself over a Roth IRA.

I like Roth's myself, but it's not a good place to put money you intend to spend on rent.

True, I'll spend it on travel later then. Should have equated it to European vacations in the golden years. ;)

JFP says

RentingForHalfTheCost says

Dude, I bought some in the $10 range in 2002, not sure what you are talking about. I have accumulated from my original position over the last 2 years and glad I did.

Even though, what you claim is possible, I can't help but call people liars on pat.net. It is so easy, cause there is no accountability and it makes me feel so good.

I'm such an asshole I know. I blame my mom and that pounding I was given by the music teacher one day. I mean what she did with that trumpet still makes me sob uncontrollably. I hate having these feelings of being inferior.

Jeez, I just checked my purchases. I bought multiple times, one of them happened to be in $10.70 in Oct 21, 2002. Yah, good timing, but that was just luck. I bought 4 other times, 3 in the last 2 years, so my averaged turned out to be 16 range. Hard to believe? Wow. Good for me I guess that others can't fathom my luck.

Amazing how owners and realtors get all pissed when people make money outside of real estate. And JFP, I would really seek out some help. They are pretty serious statements to make on a social network like pat.net. Hope things work out for you.

When comparing your stock investments to a real estate investment, you need to consider the leveraging involved with the house. For example, if you put $100k down on a $500k house, and the house goes up 10% in value, you made money on the $500k, not the 100k, i.e. $50k.

Your $100k in stocks would need to go up 50% to match.

On the downside, the same multiplier applies when values go down.

robertoaribas says

I didn't like living alone.

I'm the same way about dining, Roberto. Can't stand to eat dinner alone, which is the only real reason I rent out one of the outbuildings here on my land to an old buddy of mine for cheap (he cooks for me and that's two third of his rent).

wave9x says

When comparing your stock investments to a real estate investment, you need to consider the leveraging involved with the house. For example, if you put $100k down on a $500k house, and the house goes up 10% in value, you made money on the $500k, not the 100k, i.e. $50k.

Your $100k in stocks would need to go up 50% to match.

On the downside, the same multiplier applies when values go down.

Playing leverage is dangerous. I compare owning a home with no mortgage to my investment returns. If I wanted leverage then I would compare playing derivatives or buying stocks on margin to using a leveraged house for an investment. Leverage can suck when it goes against you. I don't take that risk in today's market. Not saying everyone should be like me, but that is how I feel.

RentingForHalfTheCost says

If I wanted leverage then I would make up my investment gains playing derivatives or buying stocks on margin to using a leveraged house for an investment

corrected.

tatupu70 says

RentingForHalfTheCost says

If I wanted leverage then I would make up my investment gains playing derivatives or buying stocks on margin to using a leveraged house for an investment

corrected.

True. It reads much better. Thanks

robertoaribas says

keep deleting all the comments that show what a lying asshole I am, and I'll keep posting them over and over! What the hell else am I going to do in the hell hole called Phoenix.

Shit, that stupid phone keeps ringing from my asshole tenants saying they can't make payment again, the roof is leaking, the heater is broke, or other shit like that. I thought this landlord things would be easy, but man was I wrong. I have to work like a bastard just to sweak out a lousy 5% return. Why the hell did I get into this mess. Dumb stupid that is why.

Hey, even insulting yourself is not allowed on my threads. Even though I agree with your insult here I will have to delete it.

A lot of people on this blog disagree with "robertoaribas".

However, they are all wasting their time. Roberto works in a local market which he knows and it is workings for hm.

Your local market is not the same, and Roberto would not touch it with a 100 foot poll.

While many can predict the direction, few can predict the when the worm turns.

It has always been a problem and it always will be will be.

fedwatcher says

While many can predict the direction, few can predict the when the worm turns.

It has always been a problem and it always will be will be.

Truer words never spoken.

I wish I would have sold my last home 2-3 years later, or sold gold 2-3 years later. Sometimes you just have to take your profits before they become losses. No one can predict the exact turns of the market.

robertoaribas says

I spent a cumulative year in thailand, 3 months in china and 2 months in brazil over the past 15 years as an owner... gotta love summer break, the month off at christmas!

You are a college professor, you get 3 month government vacation. That has nothing to do with investing. Plenty of people do that. Although local teachers I know, usually for some reason pick up second jobs flipping real estate during summer vacation.

wave9x says

Your $100k in stocks would need to go up 50% to match.

The money you have in stocks could well go up 50% in anywhere from five to eight years. Remember, you might be accumulating dividends along with the stock market going up. The beauty of compounding! Also you will be able to put more money into the stock market, if you are not using all that money to pay the mortgage/upkeep on a house.

That being said, I still think it's a wonderful thing to buy a home if it's in any way affordable especially if you plan to stay in one place, because it beats inflation and gives you security that you will never be thrown to the streets in your old age. It's a place to raise your family, makes memories., leave the home to your kids if you can.