How I Stopped My Assets from dropping...

[blanston]

The markets have been pulling me down like everybody, but i ben increasing my assets by purchasing real estate. I bot 6 houses in past six months with total market value of 800k--that has more than offset my losses! Now up bout 200k overall. All REOs purchased from banks. The average discount from their high value or sold price is bout 50%. I have purchased these homes at least 25% less than current market value. this allows me to refinance them for approx the 100% of my purchase price. So i aint got nothin in them!

Example: last home purchased for $65,000- selling price in '06 was 198,500. The home rents for $925 per month. I refinanced the home for the entire $65,000. (no money in) The interst pymt plus tax/insur is 420 = cash flo of $505! not too shabby!! If i can keep buying under market with nothin down and great cash flow- i think i will just keep on doing this!!!

What are others doing to combat their asset deflation?

 

[Westernskies]

What are others doing to combat their asset deflation?

I buried mine in the backyard.

 

[OAG]

Cash Assets up 5.7% over past 12 months (not including 10% in new deposits). CPI today goes down 1.00% Cash assets value will go up by the same %.

 

[W2R]

What are others doing to combat their asset deflation?

(1) Stopped the gradual monthly move from equities into bond funds that was part of my plan. This way, when the market recovers, so will my portfolio.

(2) Working helps, though not nearly enough to compensate for market effects.

(3) Tentatively decided that right now it is ridiculous to sell my 2000 Solara, which I love and which only has 36K miles on it, just because it is getting old. I will keep it for at least a year or two longer until after ER and after I sell my house and move north.

Then I will trade it in on a new car at that time unless the market is much worse.

 

[REWahoo]

It's a natural part of the aging process. Exercise and cosmetic surgery can help, but you really can't do much beyond postponing the inevitable for a few years.

What's that?

Dropping assets?

Oh.

Never mind....

 

[wrigley]

(1) Stopped the gradual monthly move from equities into bond funds that was part of my plan. This way, when the market recovers, so will my portfolio.

(2) Working helps, though not nearly enough to compensate for market effects.

(3) Tentatively decided that right now it is ridiculous to sell my 2000 Solara, which I love and which only has 36K miles on it, just because it is getting old. I will keep it for at least a year or two longer until after ER and after I sell my house and move north.

Then I will trade it in on a new car at that time unless the market is much worse.

36,000 miles on a vehicle that is nearly 9 years old Do you ever drive it?

Mike

 

[Khan]

36,000 miles on a vehicle that is nearly 9 years old Do you ever drive it?

Mike

I replaced my old car at 18 years and ~72,000 miles.

 

[Dawg52]

Then I will trade it in on a new car at that time unless the market is much worse.

Might be able to pick up a cheap GM car by then. They will be practically giving them away when they go through the liquidation process.

 

[wrigley]

I replaced my old car at 18 years and ~72,000 miles.

I'm currently driving a 2007 Hyundai Accent that just turned 56,000 miles. I have a 45 mile commute one way to work!

 

[CuppaJoe]

Blanston, what you describe is the reason I never invested in REITs. That is exactly what my landlord was doing when he bought my apt. bldg. two and a half years ago. He had some 250 buildings 100% financed and buried deep in opaque groupings of 1,000s of buildings in seven states. I found the details in a prospectus that was later pulled from the internet when our local city atty. sued the guy for unconscionable business practices.

You may find many people on this forum who will cheer what you are doing, others may swear in the the name of "K" and so on. I wish you well. OTHO, disclaimer: we were able to quickly sell the old family homestead because a local guy was buying up the neighborhood for rentals.

Regarding your question about what others are doing to combat asset deflation, I meditate on the fact that "you wins some and you loses some." The worst case scenario I see for myself over the next three years is the horrible prospect of losing so much money or value that I switch from a 4% all the way up to a 5% SWR. I used to think that would be losing the game, but no, as others on this forum are fond of saying, "life is good."

Welcome, I haven't noticed your screen name until now.

 

[unclemick]

It's a natural part of the aging process. Exercise and cosmetic surgery can help, but you really can't do much beyond postponing the inevitable for a few years.

What's that?

Dropping assets?

Oh.

Never mind....

And turning grey on the other end. I can chose to not watch the Market - but I look in mirror to shave.

hmmm - close my eyes and use an electric?

heh heh heh - Football has been so so also.

 

[CuppaJoe]

And turning grey on the other end. I can chose to not watch the Market - but I look in mirror to shave.

hmmm - close my eyes and use an electric?

heh heh heh - Football has been so so also.

Yeah, go with the electric. Mirrors are for entertainment purposes only. We keep mirrors around the house only for cat games. She goes nuts watching the reflections on the walls and ceiling. Hours of fun.

 

[W2R]

36,000 miles on a vehicle that is nearly 9 years old Do you ever drive it?

Maybe its more like 8.5 years since I bought it in July of 2000. So, I guess that comes to an average of maybe 360 miles/month.

I live only a mile and a half from work, and I think that is a big help. I guess a normal month would entail less than 70 miles round trip to and from work. Normally I only fill the gas tank once every six weeks or so. My daughter once said I have no life!

As far as long trips go, I drove it to Florida in 2002, and for hurricane evacuations drove to Arkansas in 2003(?), St. Louis in 2004, Alabama in 2005, and to Missouri this year.

Might be able to pick up a cheap GM car by then. They will be practically giving them away when they go through the liquidation process.

That's a good idea, if GM even exists by then!

 

[unclemick]

Drat! - I gave away my little 94 GMC Sonoma pickup at 255,000 miles.

My 2006 Chevy Equinox only has 43,500 miles so I have a while to shop for a (really rather have a Buick?) naw - I wanna big grownup gas sucking rubber burning GMC.

heh heh heh - sorta like that 32 Ford I was always too cheap to build.

 

[Nords]

(3) Tentatively decided that right now it is ridiculous to sell my 2000 Solara, which I love and which only has 36K miles on it, just because it is getting old. I will keep it for at least a year or two longer until after ER and after I sell my house and move north.

It's a natural part of the aging process. Exercise and cosmetic surgery can help, but you really can't do much beyond postponing the inevitable for a few years.

Frank will be relieved to learn of your new flexible attitude toward "assets" that you've been holding for a long time...

 

[haha]

Some of our women posters dealt with the issue of drooping assets in another thread-

http://www.early-retirement.org/forums/f27/a-gem-to-share-40647.html

 

[blanston]

CUPPA JOE...don't no how that guy relates to me. I think i am doing a good thing buying assets that have a cash flow. I buy in nice locations and fix up and maintain the home for good families that need a place to live.

Man o man- Other than driving old cars- I really havn't heard from anybody that has a plan to keep there asset level up.

 

[Goonie]

.....(3) Tentatively decided that right now it is ridiculous to sell my 2000 Solara, which I love and which only has 36K miles on it, just because it is getting old.

Maybe its more like 8.5 years since I bought it in July of 2000. So, I guess that comes to an average of maybe 360 miles/month.

I traded in my last car when it was almost 11 years old with about 63K miles on it. Most of of my driving was my 2 mile commute each day to work...then 2 miles home. Weekends normally added another 60 miles or so....and a couple of trips.

My Mom had a '97 Buick that was starting to go haywire.....some module thing-a-ma-jig...replaced it several times, but we were concerned that it would crap out when she was alone out on the highway somewhere. Therefore, she traded it in in '05 for a new Kia Spectra. The Buick had about 13K miles on it...that included 1 trip to Florida! Her Kia has just a tad over 5K miles on it.....over the past 3 years...and has a 10yr/100K mile warranty!

My '06 HHR gets a lot more miles put on it now, than it did while I was working. While working I gassed it up about once a month....Now it's about once a week! Being FIRE'd sure is expensive!

What are others doing to combat their asset deflation?

Just sitting around doing nothing at all......I haven't lost any shares in any of my accounts.....they're worth less (a lot less) than they were a year ago, but I have no intention, or need, of selling anything soon.....so when the markets goes back up, their value will too. I've got some pretty decent rates on most of CD's...so not worried there either. Just sitting back....living life! As Alfred E. Neuman said, "What, me worry?"

 

[nun]

Example: last home purchased for $65,000- selling price in '06 was 198,500. The home rents for $925 per month. I refinanced the home for the entire $65,000. (no money in) The interst pymt plus tax/insur is 420 = cash flo of $505! not too shabby!! If i can keep buying under market with nothin down and great cash flow- i think i will just keep on doing this!!!

What are others doing to combat their asset deflation?

This sounds like a lot of work. I did my RE investing in the late 90s buying a 2 family in a college town, one renter and maintenance on one house is as much as I want to deal with. I have a 4.5% fixed mortgage that I can afford even without the rent and I rode the market to ridiculous heights and now down to something sensible, but I still have 66% equity. I wouldn't want to own 6 recently foreclosed properties because of all the hassle and
I would never over invest in a single sector.

So no more houses for me, just a 50/50 mix of equity index and bonds/fixed income. I'm increasingly glad that I have a small DB pension and a TIAA-traditional annuity that has been growing at between 7% and 5% for the past 20 years. I have 8 years to retirement and no mortgage at 55 and I'm not changing my strategy because then the $20k rent and my DB and annuity will cover my living expenses. Anything else is gravy, but I hope that my gray boat will start to fill up again as well

 

[blanston]

still no answers!

Not one, or any reply that addresses my question! what kind of forum is this anyway? junkcar.com!

 

[harley]

Not one, or any reply that addresses my question! what kind of forum is this anyway? junkcar.com!

Was there a question? Sounded like a Rich Dad Poor Dad sales pitch to me.

 

[Nords]

Not one, or any reply that addresses my question! what kind of forum is this anyway? junkcar.com!

If you don't get what you feel is a prompt answer, then do you think it'll get spit out faster if you yell at the other posters and insult them? How's that workin' for ya?

You got at least one direct answer from W2R. I don't that all of us understand your question. I'm not sure what "asset deflation" means, especially in terms of the highest CPI jump in over a decade. And several people have commented on your question, which would seem to be an opportunity to further explain yourself.

But frankly the rest of your post sounds very similar to another board real-estate fanatic who's on many "Ignore Poster" lists.

 

[nun]

Not one, or any reply that addresses my question! what kind of forum is this anyway? junkcar.com!

Blanston, well done on your asset "protection". Seems like positives all around, how's the rental market where you are? what are the out goings apart form the mortgage payments?

I think you'll find most people on this forum invest for the long term and are reasonably well diversified which has made the losses less than they could have been. Many retiree's have cash buckets, CD ladders or other fixed income sources to help them through such a downturn and those of us with a few years to go until retirement should be keeping to our asset allocation plan. Finally low levels of debt and LBYM are qualities of many on this forum which will help them to cope with the current situation.

So that's how I'm protecting my assets, and my peace of mind.

 

[HFWR]

Not one, or any reply that addresses my question! what kind of forum is this anyway? junkcar.com!

Why yes, it is. We also have forums for bacon flavored whatchamacallits, pancakes on animals heads, and Several Species of Small Furry Animals Gathered Together in a Cave and Grooving with a Pict...

As for asset deflation, mine are deflating just fine, thank you. Well, except for bonds and cash, which are deflating much slower, and need to pick up the pace, lest they fall hopelessly behind...

 

[Bestwifeever]

Blanston, I saw at least three thoughtfully prepared serious responses to your question about what others are doing to protect their assets. Didn't you see them?

What do you want people to say?