Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 06-18-2010, 07:29 PM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 5,280
Quote:
Originally Posted by ikonomore View Post
It's not a loss until you sell.
Also true of holdings in your portfolio.
__________________

__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
RonBoyd 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 Early-Retirement.org 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 06-18-2010, 10:59 PM   #22
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Quote:
Originally Posted by Purron View Post
Own 2 homes in a high cost area - DC suburbs. Total value down about 15% from the peak. Try not to fret about stuff out of my control.
But, gosh, what if the federal government gets smaller?!?
__________________

__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 06-18-2010, 11:00 PM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,423
Hah! Surely you were sarcastic. The gummint ain't getting smaller, and Purron can take that fact to the bank.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 06-18-2010, 11:55 PM   #24
Full time employment: Posting here.
GoodSense's Avatar
 
Join Date: Jul 2007
Posts: 678
I have the same issue as OP. I bought in spring 2006. That explains a lot of my problems!

I choose not to include my house in my calculations. Therefore I don't have to think how much equity I have in it.

Instead, I focus on the fact that I have a fairly low-interest mortgage, so my monthly payment is not overwhelming. It's probably comparable to high-end rental. At least that's what I tell myself!
__________________
GoodSense is offline   Reply With Quote
Old 06-19-2010, 12:01 AM   #25
Thinks s/he gets paid by the post
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 3,244
I'm the original worry wart, so I've managed to worry about all these issues of asset value changes (funny, I don't worry so much about the 'upward' changes which occasionally occur, heh, heh). But what seems to keep me sane is that all these value-change issues pale in comparison to the issues I used to face at w*rk. Now, the only time I worry about w*rk is in my dreams. Those dreams are slowly becoming less frequent though they have not stopped after nearly 5 years. It's all a matter of perspective. Most of the things listed here that we are concerned about seem to be "good" things to worry about.

Reminds me of a song - (verse 1 only)

COUNT YOUR BLESSINGS (Instead of Sheep)


(Irving Berlin)
from the 1954 movie "White Christmas".

When I'm worried and I can't sleep
I count my blessings instead of sheep
And I fall asleep counting my blessings
When my BANKROLL (my emphasis) is getting small
I think of when I had none at all
And I fall asleep counting my blessings



Of course, YMMV.
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is offline   Reply With Quote
Old 06-19-2010, 02:14 AM   #26
Thinks s/he gets paid by the post
 
Join Date: Sep 2009
Location: Hong Kong
Posts: 1,575
Quote:
Originally Posted by RonBoyd View Post
Also true of holdings in your portfolio.
True, but this does not mean that an unrealised loss is not a permanent loss ov value - look at all the people who got caught holding shares in banks which, although still standing, are a long way from pre-crisis prices and will take a very very very long time to get back to those levels (if ever). Looking back a little further and there are a lot of tech companies that are still worth only a fraction of what they were at the peak and (IMHO) have very little chance of regaining those highs. For all practical purpsoes the loss is still very real regardless of whether or not it has been realised.
__________________
Budgeting is a skill practised by people who are bad at politics.
traineeinvestor is offline   Reply With Quote
Old 06-19-2010, 05:31 AM   #27
Recycles dryer sheets
shotgunner's Avatar
 
Join Date: Jun 2008
Posts: 454
Quote:
Originally Posted by 73ss454 View Post
My house is the one asset I have that I hope goes down in value. Since taxes are based mostly on the value of my home I'm hoping that my taxes drop along with the value. Since I have to live somewhere, really it's just a roof and a place to stay. If my house drops in value and I have to sell it most likely the next houses value will also drop, so it's a wash either way. In the mean time maybe my taxes will drop.
That does not work for me in NH. Valuation of my house for tax purposes peaked in 2007 at 210,700 with an annual tax bill of $4077.15. Last year my valuation was $176,000 (15% drop) and taxes at $4106.08 (up just under 1%). The beast must be fed.

Some young neighbors on the next street bought in 2005 and walked away from the house and mortgage two weeks ago after finding some extensive carpenter ant damage. I am guessing they were upside down on their mortgage and the repairs were the final straw.
__________________
Never surrender what you really want for what you want right now.
shotgunner is offline   Reply With Quote
Old 06-19-2010, 07:21 AM   #28
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,539
Like some others I don't look at the value of the house in terms of what it would sell for. DW does, but to me the only times that matters is when we buy it and when we sell it. In between it's a nice place to live.

That said, we bought in 2001, before the huge runup and rundown in prices so "buyer's regret" isn't an issue. The ones selling seem to be going for about what we paid or perhaps a bit more, so far I guess it's a wash. Which isn't bad considering the losses others have had.
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 06-19-2010, 07:26 AM   #29
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
I don't understand why people worry about the value of their house. As long as you pay a fair price for the house (not more than other comparable houses in your area), then you are fine. If you pay $250,000 and 2 years later the house is only worth $200,000...so what? If you needed to sell it and move, you would get less than you paid but the new house you bought would also cost less that it would've 2 years ago.

So unless you need to move from a place with a depressed market into an area with a thriving market, whats the problem?
__________________
utrecht is offline   Reply With Quote
Old 06-20-2010, 12:59 PM   #30
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 1,012
Quote:
Originally Posted by utrecht View Post
I don't understand why people worry about the value of their house. As long as you pay a fair price for the house (not more than other comparable houses in your area), then you are fine. If you pay $250,000 and 2 years later the house is only worth $200,000...so what? If you needed to sell it and move, you would get less than you paid but the new house you bought would also cost less that it would've 2 years ago.

So unless you need to move from a place with a depressed market into an area with a thriving market, whats the problem?
well lets say you have that house you paid $250k for and now you are getting ready to down size. you are right if you own it F&C as you get $200k for it and now the house you are moving into (which used to cost $150k) costs $120k, no money out of your portfolio to get your new house (in fact you get to put money back into your portfolio). the problem would show up if you have a mortgage on the property and because of the falling prices you have lost a major part of your equity. in that case the wash you describe doesnt happen. lets say you had made a down payment of 20% when you bought the $250k house, that means when you sold for $200k you got zip out of your house and you have to take money out of your portfolio to buy your new house, at least the $24k down payment (again 20%). do you see the problem now?
__________________
jdw_fire is offline   Reply With Quote
Old 06-22-2010, 07:16 AM   #31
Full time employment: Posting here.
kaudrey's Avatar
 
Join Date: Feb 2006
Location: Alexandria, Va
Posts: 943
dex - I think a lot of us use "mental games" to keep us sane. When the market was tanking, I just stopped looking at my NW, probably for a year and a half. I kept investing with every paycheck, but just went with "I'm buying low!" mentality.

As for houses, I bought my townhouse in 1999 in DC suburbs, so although prices are down quite a bit, I'm still doing fine there. I am about to close on my dream "log cabin" in the woods out in WV, and for that my investable portfolio is going down a chunk for the downpayment. So, my numbers at the end of this year will be lower by quite a bit, but at least I have some built in equity in the new place right away.

My mental game now-a-days is that I am not retiring for quite a while, the mortgage on the townhouse will be paid off by then, and selling the townhouse in 10-15 years will give me plenty of money to pay off the cabin mortgage and provide a decent boost to my portfolio. I just keep remembering the long-term goals.
__________________
Two roads diverged in a wood, and I - I took the one less travelled by...
kaudrey is offline   Reply With Quote
Old 06-22-2010, 11:58 AM   #32
gone traveling
 
Join Date: May 2008
Posts: 3,864
Quote:
Originally Posted by Moemg View Post
The thing that upsets me about the housing market is how many people are doing short sales because they bought at the peak . Some of them need a good dose of reality in sometimes you make an investment and you lose . Real estate is not always a winning situation . These short sales are dragging down the market even further .
But, Moemg, these folks are entitled to these short sales. It's their right to dump the downside risk on the rest of us, but the upside gain is their entitlement! It was the big bad mortgage company that forced them to buy those homes. And it is the government's role to make sure that everyone gets a trophy!
__________________
Westernskies is offline   Reply With Quote
Old 06-22-2010, 12:50 PM   #33
Full time employment: Posting here.
 
Join Date: Apr 2009
Posts: 731
I just look at my house as a place to live. We bought a semi-fixer-upper in 2002 (built in 1963) - the original owner had died. Nothing had been done in 15+ years so we got a pretty good price on it. We've done a lot to make it more up to date and I think we could at least get back what we've put into it.

However, it is my investment portfolio that is key to my survival - not the house!
__________________
Retired July 2, 2010 at 62. My only regret is that I couldn't do it sooner.
thinker25 is offline   Reply With Quote
Old 06-30-2010, 02:26 AM   #34
Full time employment: Posting here.
toofrugalformycat's Avatar
 
Join Date: Mar 2007
Location: Anchorage
Posts: 731
Quote:
Originally Posted by dex View Post
Good point. I think there are a couple of issue around the home for me. One is losing money - obvious.
The other are:
The lack of freedom - being able to easily sell and move.
Acknowledging having made a mistake.
Not knowing how low housing prices will go.
Of all the above, I'll bet the "acknowledging having made a mistake" is the hardest for you. It was for me when a similar thing happened to me decades ago. But it wasn't really a mistake - you wanted to buy a house, you bought a house, and like the sparrows in a hurricane that we all are, the value is down for now.
But you are happy living there. That is the most important thing.
Why beat yourself up about it? Do as I say, not as I do. The only time I ever bought a house, the same thing happened. It wasn't the money loss (on paper only), it was the realization that I wasn't as smart as I thought I was. But neither is anybody else.
The novelist John D. Macdonald's books can be a real comfort. He wrote about the situation in a lot of his novels. When the market is going up, everyone thinks they are a genius. But even genuine geniuses don't know everything.
__________________
toofrugalformycat is offline   Reply With Quote
Old 06-30-2010, 09:11 AM   #35
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by toofrugalformycat View Post
Of all the above, I'll bet the "acknowledging having made a mistake" is the hardest for you. It was for me when a similar thing happened to me decades ago. But it wasn't really a mistake - you wanted to buy a house, you bought a house, and like the sparrows in a hurricane that we all are, the value is down for now.
But you are happy living there. That is the most important thing.
Why beat yourself up about it? Do as I say, not as I do. The only time I ever bought a house, the same thing happened. It wasn't the money loss (on paper only), it was the realization that I wasn't as smart as I thought I was. But neither is anybody else.
The novelist John D. Macdonald's books can be a real comfort. He wrote about the situation in a lot of his novels. When the market is going up, everyone thinks they are a genius. But even genuine geniuses don't know everything.
Thanks, good points.
I would also add, it is difficult to see what you worked so hard to accumulate disappear and what it could have bought - not that I want to buy anything big.

Right now with the stock market and maybe with the house, if I could get back to even I'll get out.

I think it is important to acknowledge these things - even if you don't change your behavior; so you can take responsibility for it.

Excluding my house, I have about 50% in cash. I'm not changing any of my behavior because of the stock market or housing situation.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 06-30-2010, 09:39 AM   #36
Recycles dryer sheets
shotgunner's Avatar
 
Join Date: Jun 2008
Posts: 454
Dex, right now my paid off house is costing me about $800 a month to live there with everything, heat, electric, cable, insurance, taxes etc. I've got about 1000 sq ft living space, full basement, 2 car garage, deck and hot tub. There is no place around where I live I could rent for less money. It's good investment for cash outflow in retirement.
__________________
Never surrender what you really want for what you want right now.
shotgunner is offline   Reply With Quote
Old 06-30-2010, 10:09 AM   #37
Full time employment: Posting here.
Birdie Num Nums's Avatar
 
Join Date: Mar 2010
Location: Seattle-ish
Posts: 777
Quote:
Originally Posted by 73ss454 View Post
My house is the one asset I have that I hope goes down in value. Since taxes are based mostly on the value of my home I'm hoping that my taxes drop along with the value. Since I have to live somewhere, really it's just a roof and a place to stay. If my house drops in value and I have to sell it most likely the next houses value will also drop, so it's a wash either way. In the mean time maybe my taxes will drop.
Depends upon where you live. In Washington state, a drop in value does not necessarily a similar drop in taxes. Read here.
__________________
Birdie Num Nums is offline   Reply With Quote
Old 06-30-2010, 10:31 AM   #38
Recycles dryer sheets
shotgunner's Avatar
 
Join Date: Jun 2008
Posts: 454
Quote:
Originally Posted by Birdie Num Nums View Post
Depends upon where you live. In Washington state, a drop in value does not necessarily a similar drop in taxes. Read here.
Please see my earlier post of how mine went up while home assessed value dropped.
__________________

__________________
Never surrender what you really want for what you want right now.
shotgunner is offline   Reply With Quote
Reply


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


Similar Threads
Thread Thread Starter Forum Replies Last Post
Hi, my net worth Gazingus Hi, I am... 21 01-11-2008 05:12 PM
Net Worth Benchmarks saltydog Young Dreamers 46 10-27-2006 08:11 PM
Home to net worth %?? cardude Life after FIRE 56 09-10-2006 03:47 AM
Net worth sunrunner4@hotmail.com Life after FIRE 23 08-11-2004 12:23 PM

 

 
All times are GMT -6. The time now is 10:33 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.