Looking for a great personal finance plan that will make me wealthy in 30 years

[honobob]

What about this:
These deals are occurring even as the broader market tumbles, with resale homes in the nine-county Bay Area falling 43.7 percent in January and median prices dropping nearly 9 percent from a year earlier,

Did you even read the article?

You are clueless concerning the geographic area that is called the Bay Area and San Francisco? I read the article but you have obviously not read any prior threads that have dealt with what constitutes SF and the Bay Area. Also you were talking $500k CONDOS. You see what you want to see. Show me a $500K condo in SF that lost value or avacodo.

 

[honobob]

At some point, the cost differentials become unsustainable (and yes, I know it's happened in the past ).

I'm not oblivious to this but what is that point over the next 20-30 years?
What was the differential between say London England and London Kentucky 30 years ago? What is it today? I'd say it's probably grown and will probably grow in a similar ratio over the next 30 years!

 

[Razor]

You are clueless concerning the geographic area that is called the Bay Area and San Francisco? I read the article but you have obviously not read any prior threads that have dealt with what constitutes SF and the Bay Area. Also you were talking $500k CONDOS. You see what you want to see. Show me a $500K condo in SF that lost value or avacodo.

Isn't San Fransisco in the Bay area? Show me a $500k SF condo thats gained value in the last quarter.


The San Francisco Bay Area, commonly known as the Bay Area or the Bay, is a geographically and ethnically diverse metropolitan region that surrounds the San Francisco and San Pablo bays in Northern California.

USGS satellite photo of the San Francisco Bay Area. (Click the image for a description of major features.)


It encompasses large cities such as San Jose, San Francisco, and Oakland, along with smaller urban and rural areas. Overall, the Bay Area consists of nine counties, 101 cities, and 7,000 square miles.[1] The nine counties are Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma.[2]

 

[Razor]

You are clueless concerning the geographic area that is called the Bay Area and San Francisco? I read the article but you have obviously not read any prior threads that have dealt with what constitutes SF and the Bay Area. Also you were talking $500k CONDOS. You see what you want to see. Show me a $500K condo in SF that lost value or avacodo.

You can believe what you want, but you are the only one here that believes a $500k SF condo will be worth 10 million in 30 years.

 

[honobob]

You can believe what you want, but you are the only one here that believes a $500k SF condo will be worth 10 million in 30 years.

There ya go again making a fool out of yourself pretending to talk for everyone. Have your people call my people.

Anyway to make you happy I'll put you in the category of 100% of all Whiz con sins who don't believe $500K SF condo's can be worth $10M in 30 years. Dude, you're king of that category. Soooo.. what will they be worth? Nevermind. Too hard of a question for you.

Everyone has to believe for something to be true? I think that was overworked in Peter Pan. But hang on to your childish beliefs if you wish.

 

[Razor]

There ya go again making a fool out of yourself pretending to talk for everyone. Have your people call my people.

Anyway to make you happy I'll put you in the category of 100% of all 32 yo Cannucks who don't believe $500K SF condo's can be worth $10M in 30 years. Dude, you're king of that category. Soooo.. what will they be worth? Nevermind. Too hard of a question for you.

OK. Lets see who is clueless.
Anyone here agree with BOB that a $500k condo in San Fran will be worth $10 million in thirty years?
Anyone? Anyone?

 

[honobob]

OK. Lets see who is clueless.
Anyone here agree with BOB that a $500k condo in San Fran will be worth $10 million in thirty years?
Anyone? Anyone?

Yeah, that'd be proof! Dude you're done, jumped the shark, whatever.

Let's get the proof to some real questions though, not to waste on something as frivioulous as real estate.

God, Dead or Alive?

Anyone? Anyone?

You quack me up


Ratio of 4 angels per huge manatee. Same as 1976, 1996 and by god 2026!!

 

[spideyrdpd]

I agree with honobob

Hi
I am curious why you disagree with honobob yet say that you plan on making your money in real estate?
I also love how people ask a question and then berate people for the answers and beliefs.
I am not sure what the final # would end up being. People have always said real estate cant continue to go up but those people have been proved wrong time and time again. Oh and the same people that are knocking honobob are investing in the stock market. Like that only goes up ?
Robert

 

[samclem]

And Honobob sang gleefully:
"Dude, I got teachers and garbagemen in my NBHD in $600,000 houses. You wanna go door to door and explain to them how they can't be in a house 10+ times more than their income?"

- Take a peek in the windows--do you see any furniture? Have they got grow-lamps glowing 24-7? Any funny meth-lab smells? Going door to door might not be such a good idea. Anyway, if you've got questions to ask them, do it quick before their loan rates adjust and they mail the keys back to the bank and scoot.

Where's Wade Cook these days? Is he doing prison time yet?

 

[honobob]

And Honobob sang gleefully:
"Dude, I got teachers and garbagemen in my NBHD in $600,000 houses. You wanna go door to door and explain to them how they can't be in a house 10+ times more than their income?"

- Take a peek in the windows--do you see any furniture? Have they got grow-lamps glowing 24-7? Any funny meth-lab smells? Going door to door might not be such a good idea. Anyway, if you've got questions to ask them, do it quick before their loan rates adjust and they mail the keys back to the bank and scoot.

Where's Wade Cook these days? Is he doing prison time yet?

You're sad.

 

[innova]

This thread is hilarious.

Everyone has to believe for something to be true?

Actually, thats how real estate pricing pretty much works...

I am not sure what the final # would end up being. People have always said real estate cant continue to go up but those people have been proved wrong time and time again. Oh and the same people that are knocking honobob are investing in the stock market. Like that only goes up ?

By your name I'm assuming you are into RDPD. Hardly an adequate manual for much of anything, though lets not digress.

RE doesn't go 'up and up'. It moves in cyclical fashion, not unlike any other market: commodities, financial, etc. There is nothing special or magical about RE.

Nothing wrong with investing in RE provided you don't expect appreciation to continue at a long-term rate of 5+%. Rents are driven by supply and demand, but demand is driven by wages. Therefore, wages must ultimately drive the appreciation rate of RE. Long-term data suggests that 2-3% is the national average. There will be booms and busts also - look back to the 90's for your Bay area example.

Income to mortgage ratio. I'll see if I can explain your theory to the lady in my office that just sold her $1.8M place. She's never made over $100K a year.

A clueless, gross oversimplification. Nobody making $100k per year can buy a place for 1.8M. She of course bought in years ago before a large price runup, duh.

 

[kombat]

Income to mortgage ratio. I'll see if I can explain your theory to the lady in my office that just sold her $1.8M place. She's never made over $100K a year.

Since you've apparently ignored my entire post, let me try and make it simple for you. I would like you to answer one simple question:

Do you believe that in 30 years, banks will routinely approve mortgages for 47 times someone's household income?

A simple 'yes' or 'no' will suffice.

 

[honobob]

This thread is hilarious.



Actually, thats how real estate pricing pretty much works...



By your name I'm assuming you are into RDPD. Hardly an adequate manual for much of anything, though lets not digress.

RE doesn't go 'up and up'. It moves in cyclical fashion, not unlike any other market: commodities, financial, etc. There is nothing special or magical about RE.

Nothing wrong with investing in RE provided you don't expect appreciation to continue at a long-term rate of 5+%. Rents are driven by supply and demand, but demand is driven by wages. Therefore, wages must ultimately drive the appreciation rate of RE. Long-term data suggests that 2-3% is the national average. There will be booms and busts also - look back to the 90's for your Bay area example.



A clueless, gross oversimplification. Nobody making $100k per year can buy a place for 1.8M. She of course bought in years ago before a large price runup, duh.

Actually she will be buying a replacement property in the upper one millions.
But, you proved my point!!! She did exactly like my contention that you want to deny of where someone today of average means buys a $500,000 condo today and in 30 years are sitting in a $10,000,000 condo but are still only making median income. Demand driven by wages? The last 25-30 years are different from the next 25-30 years because?

Bay Area in the nineties? I was here. Value doubled in 2 years and NEVER went more than 9% below the highest value but who cares if I'm happy with 11% annual compounded appreciation over long term? And why are you throwing rents in there? I've never said that SF residential property is valued by rental income. It may be in the the areas where they enjoy only 2-3% appreciation but where is that? My mothers house in CIncinnati appreciated 5.1% annualy over 40 years. Some one must have not had any appreciation at all to average your figure. so what were wages there $0 ?

If I hadn't heard all the same rationalizations over and over again over the last 30+ years I might think you've got some new information to consider but it's same old same old flat earth thinking.

 

[kombat]

Nobody making $100k per year can buy a place for 1.8M. She of course bought in years ago before a large price runup, duh.

Actually she will be buying a replacement property in the upper one millions.

Yes, because she'll be making a massive downpayment with the windfall from her hugely-appreciated property you said she just sold!

Here's a summary:

• Bought property for $xx,000 many years ago.
• Property appreciated much faster than her salary, but since she left the equity in her home, her mortgage was still very reasonable, based on the original purchase price.
• Sold the property for way more than she paid for it, bought comparable property elsewhere, using the proceeds from the sale for a down payment in the 80%-90% range.

Thus, her new mortgage is still reasonable for her <$100k income. She may be moving to an "upper one millions" property, but her mortgage most certainly will not be anywhere near that much, will it.

The question is, who bought her old place? And where did they get that kind of money?

The last 25-30 years are different from the next 25-30 years because?

*sigh* This is pointless.

You've convinced me. Past performance really are a promise of future gains. Gold and oil have had a huge runup over the past 2 years, so I see no reason why that wouldn't continue for at least 2 more. I'm moving my entire portfolio into gold and oil. 50%/year gains, here I come!

 

[innova]

Actually she will be buying a replacement property in the upper one millions

Of course she will, thats because she has a 1.8M downpayment. DUH. You're not getting the point.

She did exactly like my contention that you want to deny of where someone today of average means buys a $500,000 condo today and in 30 years are sitting in a $10,000,000 condo but are still only making median income.

That is certainly POSSIBLE, I'm not sure I'd bank on using my home as an investment (its not). I would bet that when SHE bought her property years ago, the wagerice was much more favorable that it is now. Example:
Lets say 20 years ago her 2M property (for ease of numbers)sold for 200k. She was making 50K at the time. Hence, 1:4.

Now, her property has skyrocketed to 2M, but is she making 500K per year? NOPE. Wages haven't kept up.

Whats the lesson for buyers today, that don't have 1.8M to put on a downpayment? Expensive condos will be POOR investments, period. Even for someone with 100K income, payments on an 500K condo will be a larger portion of their income than is prudent to pay.

In the end, it comes to this: What is the prudent decision? It is never to buy a property for your personal residence with the false hopes of striking it rich. That kind of thinking is reserved for RDPD types.

 

[armor99]

There ya go again making a fool out of yourself pretending to talk for everyone. Have your people call my people.

Anyway to make you happy I'll put you in the category of 100% of all Whiz con sins who don't believe $500K SF condo's can be worth $10M in 30 years. Dude, you're king of that category. Soooo.. what will they be worth? Nevermind. Too hard of a question for you.

Everyone has to believe for something to be true? I think that was overworked in Peter Pan. But hang on to your childish beliefs if you wish.

Well this has been interesting entertainment from you so far. But I have not seen such an adolescent, immature, inarticulate, A.D.D. fueled rant in quite some time. You could be the most advanced real estate genious of our age. But the reality is, that in the business world, your tone would just get you laughed out of the room.
Just so you understand, we all know you are quite young. I am guessing 23 or under. No one who is older and more mature uses multiple "!!!!!!!", or refers to others as "Dude" in their postings. Unless humor rather than idea exchange was actually the point. I think that as a rule, most here in the forum are very polite, even when we might disagree. It is a sign of respect to others. But actually I am curious... I will certainly call "your people", whoever those people might be, and hear them out. After all, I certainly do not want to pass up a good oppotunity. What company should I call, and whom shall I ask to speak to?

 

[honobob]

Well this has been interesting entertainment from you so far. But I have not seen such an adolescent, immature, inarticulate, A.D.D. fueled rant in quite some time. You could be the most advanced real estate genious of our age. But the reality is, that in the business world, your tone would just get you laughed out of the room.
Just so you understand, we all know you are quite young. I am guessing 23 or under. No one who is older and more mature uses multiple "!!!!!!!", or refers to others as "Dude" in their postings. Unless humor rather than idea exchange was actually the point. I think that as a rule, most here in the forum are very polite, even when we might disagree. It is a sign of respect to others. But actually I am curious... I will certainly call "your people", whoever those people might be, and hear them out. After all, I certainly do not want to pass up a good oppotunity. What company should I call, and whom shall I ask to speak to?

Did you have anything to say concerning the OP or did you decide to use your first and only post in this thread to attack me now that you feel there is safety in numbers? I would encourage you to review the thread. I responded appropriately to the OP and tried to provide support for my beliefs. I did get a little snarky by post #47 but if people are going to attack like a bunch of hyenas I don't think they should act so shocked when someone defends theirself.

 

[kombat]

Did you have anything to say concerning the OP or did you decide to use your first and only post in this thread to attack me now that you feel there is safety in numbers? I would encourage you to review the thread. I responded appropriately to the OP and tried to provide support for my beliefs. I did get a little snarky by post #47 but if people are going to attack like a bunch of hyenas I don't think they should act so shocked when someone defends theirself.

I notice you still haven't answered my one, simple, yes-or-no question:

Do you believe that in 30 years, banks will routinely approve mortgages for 47 times someone's household income?

 

[honobob]

I notice you still haven't answered my one, simple, yes-or-no question:

Do you believe that in 30 years, banks will routinely approve mortgages for 47 times someone's household income?

Well, I didn't see where it had much to do with my point. Honolulu and SF have very high percentage of cash purchases. I'm talking about appreciation in select areas that I have knowlege. I'm not in the banking business and am not portending to have an informed prediction of their business practices over the next 30 years.

Someone here has posted about historical lending on real estate and I believe most purchases were made for cash and early mortgages were made for shorter than 30 years. Forty year loans are not completely uncommon. When I bought my first car I had a one year loan. three became common and I believe 5 year loans are pretty common and I read recently about 8!! year car loans. Financial institutions adapt. You said this was pointless. Why is my answer on the future of loan to income ratio so important to you? It has so little to do with the appreciation rate here.

So my answer is, sure it's possible. Happy

 

[Kronk]

No one could afford that type of mortgage.

Take a $1 mil mortgage. 5% interest, 40 year mortgage, very low taxes. Overall, that's around 5k per month -- and that's nearly a best case scenario. If someone had no other expenses at all, they'd need $60k per year, which is under a 17 times earnings multiple. With an interest-only mortgage, that's still $50k, so a multiple of 20.

 

[Milton]

OK. Lets see who is clueless.
Anyone here agree with BOB that a $500k condo in San Fran will be worth $10 million in thirty years?
Anyone? Anyone?

Anything is possible. But I suspect that it would require widespread inflation and we would also be paying $25,000 for a set of spare tires.

That said, it's a free world, and he is welcome to believe whatever he likes.

 

[spideyrdpd]

Ok Lets say Kombat is right. He makes a good argument. So what would the home be worth? Using your 5x the salary it would around 2.5 million dollars. Not sure where the others are being so negative. You do have to buy two cause your going to need some place to live. Oh and since the market is so bad you should be able to get a discount.....Its not like he is going to get that investing in his 401k......
Rob

 

[spideyrdpd]

RDPD says your home is not an investment
Doh
Did you even read the book

 

[DblDoc]

Ok Lets say Kombat is right. He makes a good argument. So what would the home be worth? Using your 5x the salary it would around 2.5 million dollars. Not sure where the others are being so negative. You do have to buy two cause your going to need some place to live. Oh and since the market is so bad you should be able to get a discount.....Its not like he is going to get that investing in his 401k......
Rob

Actually assuming $15,500 per annum increasing at 3% for inflation and compounded at 9% over 31 years I get $2.4million...

Add in an IRA and some taxable and your in excellent shape. And much more likely then putting all your nest egg in one basket. Remember time is your biggest ally if you are young.

DD

 

[innova]

You do have to buy two cause your going to need some place to live. Oh and since the market is so bad you should be able to get a discount.....Its not like he is going to get that investing in his 401k......

Problem there is that no renter on earth will pay your other mortgage for you, and all the money you spend pissing away on mortgage payments could have grown to some REAL money in the financial markets.

Did you even read the book

Yes. I credit RDPD with 'opening my eyes'. Its great for creating enthusiasm on becoming interested in finances, horrible from a practical advise standpoint. I've found far better teachers now.