Debts And Assets

[qwerty]

So if you strip out the rental income, the real estate return drops to about 3% (they said about 50% of the return on real estate came from rental income) for appreciation. Which is probably consistent with inflation. Purchasing a home to live in is generally just inflation protection, you lock in your price. Of course these are long term averages. Over the short term timing clearly matters.

If you bought in 2005 and 2006, 12-13 years later you are probably around break even. Not a very good return. Stocks on the other hand, the Dow was around 10k in 2005 and 12k in 2006, now it is 25k. This represents a CAGR of 7.3% and 6.3% respectively. If you pulled your money out in 2009 well that would have sucked

 

[fortune11]

Stocks can decouple from real estate in a big way

Real estate is only tied to US economy and US supply and demand trends

SP500 is tied to global earnings and high growth sectors like tech right now . In fact tech margins are more than 2x no tech margins . 

I know we like to make fun of  ?it is different this time? as a tired cliche, but it is different each time . 

Central banks have never expanded balance sheets as tremendously as this time around and even as they withdraw accomodation , they are still now effectively stuck propping the more globally connected markets .

 

[irvinebullhousing]

Stocks can decouple from real estate in a big way

Real estate is only tied to US economy and US supply and demand trends

SP500 is tied to global earnings and high growth sectors like tech right now . In fact tech margins are more than 2x no tech margins . 

I know we like to make fun of  ?it is different this time? as a tired cliche, but it is different each time . 

Central banks have never expanded balance sheets as tremendously as this time around and even as they withdraw accomodation , they are still now effectively stuck propping the more globally connected markets .

So where do you think we are in term of real estate cycle now?

 

[eyephone]

I?m not going to follow someone because they are on shark tank. To me that show is way over rated.

 

[irvinebullhousing]

I?m not going to follow someone because they are on shark tank. To me that show is way over rated.

You missing the points, it's a start to begin a discussion. Everyone will have their own path to financial freedom and a peace of mind. I respect and understand the risk takers.

 

[irvinebullhousing]

Liar Loan, Agreed that the stock market moved side ways from 1965 to 1982. Do you have any charts or source link that shows a 10X in real estate during that time period?

Risks is almost minimal if the investment is long term.  Yes there is risk but relative risk is very low.  You can have a huge depression in the market and your house dramatically fall in value.  Paying off principal is a form of investment...you just put it into your house rather than in stocks or bonds.

Inflation eats 2-3% a year anyways...so your are better off taking money now then giving it to the bank.

I call BS on minimal risk on long-term stock market investment. Many people got laid off in 2008-09 and needed to cash out their investments just as the time that they were down big. Others couldn't resist the urge to sell.

If you have a 4.5% interest rate on your home and are no longer itemizing deductions due to the new tax law, anything you put into home mortgage earns 4.5% "risk-free" and tax-free.

The main risk of paying down a mortgage early, is that the money can be inaccessible when you need it most. If you lose your job and want to cash-out refi, you can't.

The second risk is that with a mortgage, the bank (or lenders) are sharing the risk in your home. If anything catastrophic happens (earthquake, fire, housing market crash, etc.) and for whatever reason you are unable to rebuild with insurance coverage, the higher your LTV, the less you have to lose by walking away.

Look at any 5-year period and you'll see that the market has been minimal risk.  Even if you were to invest all your money at the peak before the crash, within 5 years, you made your money back...and that's the worst case scenario.  In general, the stock market has (and will) outpace the real estate market.

This isn't true.

The great depression took about 15 years to recover (assuming your portfolio didn't entirely go BK).

The Nasdaq took 15 years to recover.  It may not represent the full market, but it's what everybody was invested in at the time.  Real estate did far better from 2000 to 2015 than tech stocks, not even accounting for leverage.

The period from 1965 to 1982 also had very low stock returns during extremely high inflation (a loss in real terms).  If you look at real estate vs. stocks during this time period, real estate probably wins by a multiple of 10x.

[/quote]

James, from where you are in GA, where do you think we are in term of real estate cycle? And you are from outside looking into CA, particularly Southern CA. Where do you think we are in term of real estate cycle?

 

[eyephone]

I?m not going to follow someone because they are on shark tank. To me that show is way over rated.

You missing the points, it's a start to begin a discussion. Everyone will have their own path to financial freedom and a peace of mind. I respect and understand the risk takers.

Go watch the show and tell me if always gives fair offers.
The answer to your question is to make more money, and stop complaining. (I?m one of the few on Talk Irvine telling people to step up their game at work. I think King also mentioned it)

 

[irvinebullhousing]

I?m not going to follow someone because they are on shark tank. To me that show is way over rated.

You missing the points, it's a start to begin a discussion. Everyone will have their own path to financial freedom and a peace of mind. I respect and understand the risk takers.

Go watch the show and tell me if always gives fair offers.
The answer to your question is to make more money, and stop complaining. (I?m one of the few on Talk Irvine telling people to step up their game at work. I think King also mentioned it)

Understand, you want to make more money. No one really complaining that I see. The way to make and KEEP your money is watching and follow current trends in the market right? What good of making money and lost it all while being complacent. I am NOT suggesting or saying that it happen tomorrow, but over time, the trends will becomes more clear.

 

[eyephone]

I?m not going to follow someone because they are on shark tank. To me that show is way over rated.

You missing the points, it's a start to begin a discussion. Everyone will have their own path to financial freedom and a peace of mind. I respect and understand the risk takers.

Go watch the show and tell me if always gives fair offers.
The answer to your question is to make more money, and stop complaining. (I?m one of the few on Talk Irvine telling people to step up their game at work. I think King also mentioned it)

Understand, you want to make more money. No one really complaining that I see. The way to make and KEEP your money is watching and follow current trends in the market right? What good of making money and lost it all while being complacent. I am NOT suggesting or saying that it happen tomorrow, but over time, the trends will becomes more clear.

I can?t help people that foolishly can?t save their own money.

You have to take his advice with a grain of salt. He gives advice about debt and mortgages, but on the show he makes low ball offers or talks down to them. *at times he makes fair offers*

Just because he is on CNBC it doesn?t mean nothing.

 

[eyephone]

The best advice in this thread is simple. Try to eat at home. The money you save from eating at home is enormous. Also, it is healthier than eating out.


There you go. That?s my answer to your question. 

 

[irvinebullhousing]

The best advice in this thread is simple. Try to eat at home. The money you save from eating at home is enormous. Also, it is healthier than eating out.


There you go. That?s my answer to your question. 

Best advise, I agree.

 

[lnc]

The best advice in this thread is simple. Try to eat at home. The money you save from eating at home is enormous. Also, it is healthier than eating out.


There you go. That?s my answer to your question. 

Good idea, I'm going to order to-go and eat at home whenever possible and save those tip money.  Those tips can rally add up, you don't need to tip them when pick up to-go right?

 

[aquabliss]

If you don?t want to tip when you eat out, pay with cash.  It?s a lot less awkward to take your change in cash and walk out, than to put a zero or a slash on the tip line of a cc slip and walk out. 

 

[eyephone]

The best advice in this thread is simple. Try to eat at home. The money you save from eating at home is enormous. Also, it is healthier than eating out.


There you go. That?s my answer to your question. 

Good idea, I'm going to order to-go and eat at home whenever possible and save those tip money.  Those tips can rally add up, you don't need to tip them when pick up to-go right?

Yes

 

[usctrojancpa]

The best advice in this thread is simple. Try to eat at home. The money you save from eating at home is enormous. Also, it is healthier than eating out.


There you go. That?s my answer to your question. 

Or do fasting where you only eat once or twice a day mixed in with 3-5 day fast.  Saves money and will make you healthier and more productive (less time spend preparing, eating, and cleaning up). 

 

[irvinebullhousing]

I love my foods. I never have to go on fasting and diet my entire life. My weight has been the same for the last 20 years, despite whatever I eat.

I know some have to eat ramen to get by, to squeeze into a big house payment, but ramen is meant for rough time during college years. If I have to give up eating out and think about tip or no tip, I would not want to be house rich and cash poor. I wouldn't eat out 5 times a week, but once or twice a week is reasonable.

 

[fortune11]

Stocks can decouple from real estate in a big way

Real estate is only tied to US economy and US supply and demand trends

SP500 is tied to global earnings and high growth sectors like tech right now . In fact tech margins are more than 2x no tech margins . 

I know we like to make fun of  ?it is different this time? as a tired cliche, but it is different each time . 

Central banks have never expanded balance sheets as tremendously as this time around and even as they withdraw accomodation , they are still now effectively stuck propping the more globally connected markets .

So where do you think we are in term of real estate cycle now?

I think the concept of "cycle" itself may need to be re-thought . If I had a dollar for every time i have heard financial analysts moan about how "late we are into the current cycle" ever since 2015, i would be able to put enough cash towards buying a new barcelona detached ...

real estate is still hostage to the trends of lower supply and increasing demand (only constrained by affordability/down payments) .  I think you really have to think about "uniqueness" of the product when making a decision and you will be fine, local ups and downs notwithstanding. 

where i get worried is people buying generic homes for a quick flip and they barely end up breaking even.  that's whats happening now with some of the new construction.

even if we have a localized/modest selloff, there is plenty of cash on the sidelines to step in and scoop up prime properties (hence my emphasis on "uniqueness of product"). 

 

[panda]

Compressed Village. Look at the two real estate charts of Las Vegas, NV and Nashville, TN. Why do you think they look so different? Nashville is now 40% above its last peak, whereas Las Vegas is still lagging behind its previous peak value. Do you think the past performance in the last 15 years for both the LA and Atlanta market will repeat itself in the next 15 years? Would love to hear your thoughts.

Liar Loan, Agreed that the stock market moved side ways from 1965 to 1982. Do you have any charts or source link that shows a 10X in real estate during that time period?

Risks is almost minimal if the investment is long term.  Yes there is risk but relative risk is very low.  You can have a huge depression in the market and your house dramatically fall in value.  Paying off principal is a form of investment...you just put it into your house rather than in stocks or bonds.

Inflation eats 2-3% a year anyways...so your are better off taking money now then giving it to the bank.

I call BS on minimal risk on long-term stock market investment. Many people got laid off in 2008-09 and needed to cash out their investments just as the time that they were down big. Others couldn't resist the urge to sell.

If you have a 4.5% interest rate on your home and are no longer itemizing deductions due to the new tax law, anything you put into home mortgage earns 4.5% "risk-free" and tax-free.

The main risk of paying down a mortgage early, is that the money can be inaccessible when you need it most. If you lose your job and want to cash-out refi, you can't.

The second risk is that with a mortgage, the bank (or lenders) are sharing the risk in your home. If anything catastrophic happens (earthquake, fire, housing market crash, etc.) and for whatever reason you are unable to rebuild with insurance coverage, the higher your LTV, the less you have to lose by walking away.

Look at any 5-year period and you'll see that the market has been minimal risk.  Even if you were to invest all your money at the peak before the crash, within 5 years, you made your money back...and that's the worst case scenario.  In general, the stock market has (and will) outpace the real estate market.

This isn't true.

The great depression took about 15 years to recover (assuming your portfolio didn't entirely go BK).

The Nasdaq took 15 years to recover.  It may not represent the full market, but it's what everybody was invested in at the time.  Real estate did far better from 2000 to 2015 than tech stocks, not even accounting for leverage.

The period from 1965 to 1982 also had very low stock returns during extremely high inflation (a loss in real terms).  If you look at real estate vs. stocks during this time period, real estate probably wins by a multiple of 10x.

James, from where you are in GA, where do you think we are in term of real estate cycle? And you are from outside looking into CA, particularly Southern CA. Where do you think we are in term of real estate cycle?
[/quote]

 

[irvinebullhousing]

Compressed Village. Look at the two real estate charts of Las Vegas, NV and Nashville, TN. Why do you think they look so different? Nashville is now 40% above its last peak, whereas Las Vegas is still lagging behind its previous peak value. Do you think the past performance in the last 15 years for both the LA and Atlanta market will repeat itself in the next 15 years? Would love to hear your thoughts.

Liar Loan, Agreed that the stock market moved side ways from 1965 to 1982. Do you have any charts or source link that shows a 10X in real estate during that time period?

Risks is almost minimal if the investment is long term.  Yes there is risk but relative risk is very low.  You can have a huge depression in the market and your house dramatically fall in value.  Paying off principal is a form of investment...you just put it into your house rather than in stocks or bonds.

Inflation eats 2-3% a year anyways...so your are better off taking money now then giving it to the bank.

I call BS on minimal risk on long-term stock market investment. Many people got laid off in 2008-09 and needed to cash out their investments just as the time that they were down big. Others couldn't resist the urge to sell.

If you have a 4.5% interest rate on your home and are no longer itemizing deductions due to the new tax law, anything you put into home mortgage earns 4.5% "risk-free" and tax-free.

The main risk of paying down a mortgage early, is that the money can be inaccessible when you need it most. If you lose your job and want to cash-out refi, you can't.

The second risk is that with a mortgage, the bank (or lenders) are sharing the risk in your home. If anything catastrophic happens (earthquake, fire, housing market crash, etc.) and for whatever reason you are unable to rebuild with insurance coverage, the higher your LTV, the less you have to lose by walking away.

Look at any 5-year period and you'll see that the market has been minimal risk.  Even if you were to invest all your money at the peak before the crash, within 5 years, you made your money back...and that's the worst case scenario.  In general, the stock market has (and will) outpace the real estate market.

This isn't true.

The great depression took about 15 years to recover (assuming your portfolio didn't entirely go BK).

The Nasdaq took 15 years to recover.  It may not represent the full market, but it's what everybody was invested in at the time.  Real estate did far better from 2000 to 2015 than tech stocks, not even accounting for leverage.

The period from 1965 to 1982 also had very low stock returns during extremely high inflation (a loss in real terms).  If you look at real estate vs. stocks during this time period, real estate probably wins by a multiple of 10x.

James, from where you are in GA, where do you think we are in term of real estate cycle? And you are from outside looking into CA, particularly Southern CA. Where do you think we are in term of real estate cycle?

Look at the two real estate charts of Las Vegas, NV and Nashville, TN. Why do you think they look so different? Nashville is now 40% above its last peak, whereas Las Vegas is still lagging behind its previous peak value. Do you think the past performance in the last 15 years for both the LA and Atlanta market will repeat itself in the next 15 years? Would love to hear your thoughts.


When lower price homes in Nashville support by good paying wages from diversify employments, and attract other major business players to relocate recently in Nashville TN. has created a boom cycle Nash. TN. Las Vegas lag behind because mainly hospitality business and leisure. The Sun Belt states have historically had significantly lower property prices than the coastal states and have charged lower rents. Therefore, there is more room for rent increases in these markets than in oversupplied and expensive coastal markets, as well as the potential for higher cap rates. And majority of employees in the hospitality and leisure roles earn minimum wages plus tips. A big difference in term of wage earning.

LA and Atlanta both hustle and bustle city with equally high wages and diverse business. The big negative for LA/OC is affordability is sucked. Price is high and possibly getting higher before stalling out. Atlanta, can still gain, as people still see better values and it still much cheaper compare to coastal real estate. The timing/cycle for OC is mature. Along with other headwinds from tax shelter go away, to rate jump, and foreign institutions investment slow down or cut off could spark a big slow down after summer season.

 

[panda]

Compressed-Village,
You are a smart guy and you nailed it. Actually, I couldn't have said it better myself.

There are a lot of tech jobs and population inflow into Nashville. I hope that metro Atlanta will follow the steps of Nashville at a much larger scale.

Panda

Compressed Village. Look at the two real estate charts of Las Vegas, NV and Nashville, TN. Why do you think they look so different? Nashville is now 40% above its last peak, whereas Las Vegas is still lagging behind its previous peak value. Do you think the past performance in the last 15 years for both the LA and Atlanta market will repeat itself in the next 15 years? Would love to hear your thoughts.

Liar Loan, Agreed that the stock market moved side ways from 1965 to 1982. Do you have any charts or source link that shows a 10X in real estate during that time period?

Risks is almost minimal if the investment is long term.  Yes there is risk but relative risk is very low.  You can have a huge depression in the market and your house dramatically fall in value.  Paying off principal is a form of investment...you just put it into your house rather than in stocks or bonds.

Inflation eats 2-3% a year anyways...so your are better off taking money now then giving it to the bank.

I call BS on minimal risk on long-term stock market investment. Many people got laid off in 2008-09 and needed to cash out their investments just as the time that they were down big. Others couldn't resist the urge to sell.

If you have a 4.5% interest rate on your home and are no longer itemizing deductions due to the new tax law, anything you put into home mortgage earns 4.5% "risk-free" and tax-free.

The main risk of paying down a mortgage early, is that the money can be inaccessible when you need it most. If you lose your job and want to cash-out refi, you can't.

The second risk is that with a mortgage, the bank (or lenders) are sharing the risk in your home. If anything catastrophic happens (earthquake, fire, housing market crash, etc.) and for whatever reason you are unable to rebuild with insurance coverage, the higher your LTV, the less you have to lose by walking away.

Look at any 5-year period and you'll see that the market has been minimal risk.  Even if you were to invest all your money at the peak before the crash, within 5 years, you made your money back...and that's the worst case scenario.  In general, the stock market has (and will) outpace the real estate market.

This isn't true.

The great depression took about 15 years to recover (assuming your portfolio didn't entirely go BK).

The Nasdaq took 15 years to recover.  It may not represent the full market, but it's what everybody was invested in at the time.  Real estate did far better from 2000 to 2015 than tech stocks, not even accounting for leverage.

The period from 1965 to 1982 also had very low stock returns during extremely high inflation (a loss in real terms).  If you look at real estate vs. stocks during this time period, real estate probably wins by a multiple of 10x.

James, from where you are in GA, where do you think we are in term of real estate cycle? And you are from outside looking into CA, particularly Southern CA. Where do you think we are in term of real estate cycle?

Look at the two real estate charts of Las Vegas, NV and Nashville, TN. Why do you think they look so different? Nashville is now 40% above its last peak, whereas Las Vegas is still lagging behind its previous peak value. Do you think the past performance in the last 15 years for both the LA and Atlanta market will repeat itself in the next 15 years? Would love to hear your thoughts.


When lower price homes in Nashville support by good paying wages from diversify employments, and attract other major business players to relocate recently in Nashville TN. has created a boom cycle Nash. TN. Las Vegas lag behind because mainly hospitality business and leisure. The Sun Belt states have historically had significantly lower property prices than the coastal states and have charged lower rents. Therefore, there is more room for rent increases in these markets than in oversupplied and expensive coastal markets, as well as the potential for higher cap rates. And majority of employees in the hospitality and leisure roles earn minimum wages plus tips. A big difference in term of wage earning.

LA and Atlanta both hustle and bustle city with equally high wages and diverse business. The big negative for LA/OC is affordability is sucked. Price is high and possibly getting higher before stalling out. Atlanta, can still gain, as people still see better values and it still much cheaper compare to coastal real estate. The timing/cycle for OC is mature. Along with other headwinds from tax shelter go away, to rate jump, and foreign institutions investment slow down or cut off could spark a big slow down after summer season.