Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 08-11-2011, 06:39 AM   #61
ziggy29's Avatar
Join Date: Oct 2005
Location: Texas
Posts: 15,624
Originally Posted by Gone4Good View Post
I guess the 10-yr market is also in on the war on savers, driving rates down to 2.11%. Long-term investors obviously don't have much regard for themselves, waging war on themselves and all.

If there is a 'war' it is being waged by those of us who have an excess demand for safe assets. The Fed doesn't control long rates. And if the Fed's zero rate policy were wrong, we'd be seeing inflation raging and the bond vigilantees driving rates ever higher.
It has a ripple effect. The more you drive down short term rates, the longer people have to go to chase yield -- which drives down demand for long term rates as well.

"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-11-2011, 09:58 AM   #62
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,944
Let's face it, plenty of people who depend on interest income have seen their income cut back. Who is getting this money that the savers are not getting? One thing for sure, with interest rates this low, my spending has gone down and will stay down. What I earn by working (not yet fully retired) cannot pay for all the goodies I enjoy.

The worst decisions are usually made in times of anger and impatience.
Chuckanut is online now   Reply With Quote
Old 08-11-2011, 12:33 PM   #63
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
Join Date: Jan 2007
Location: Independence
Posts: 5,602
We don't depend on interest income, but it does provide maybe 1/4 of our annual net income. Most recently loaned $129,600 on a place in Camas Washington to a flipper. The flipper paid $162k for the property and we did an 80% loan to value. Also charged him (first time doing this) 2% up front as an origination fee, 12% interest, and have a 9 month balloon. It is our earnest hope that he flips the place in a few months. If so we will have made 4-5% on the money in a 2-3 month time period. Or maybe we'll end up with a place in Camas for cheap.

There is risk - we may end up foreclosing on a shaggy 15 acre trailer park in the wilds of Gates Oregon as the borrower is just now two months in arrears, but it is nice having a consolation prize if the loan goes bad.
calmloki is online now   Reply With Quote
Old 08-11-2011, 07:29 PM   #64
Confused about dryer sheets
Join Date: Jun 2011
Posts: 5
Just my 2 cents, to clarify : "Low yield has no effect on retired people."
I assume retired people have certain amount invested in bond funds and they live on some of the distribution from these bonds and stock. The bond's distribution is fixed. What is really changing is the bond price.
However for people buying new position in bonds and having individual maturing bond, yes the current rate environment is pretty bad. I beleive the long term bond is 50% more expensive in historical standard.

cloud is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


All times are GMT -6. The time now is 05:11 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.