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

[kombat]

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Originally Posted by honobob Quote: Originally Posted by kombat do you really think that same "no frills" dwelling will be worth $11M in 30 years? Oh hell yeah.

OK, I'm 90% certain I'm being trolled here, but just in case the OP actually takes this crazy advice, I'll respond.

honobob, if a "no-frills" house will be worth $11,000,000 in 30 years, what will the nice houses cost? If a nice house in San Francisco currently sells for $1,000,000, then you by your math (11%/year), it will be worth just under $23 million in 30 years.

Working professionals in San Francisco can currently (barely) afford these $750,000 - $1 million homes, even though they may be 5-10x their household income.

However, in 30 years, assuming wages match inflation at 3%/year, those same couples would be applying for mortgages at 30-60x their income. Do you seriously think that's how things will be in 30 years? What bank is going to approve mortgages at 30 times someone's annual income? Do you really not see how ridiculous that sounds?

Your only defense in this absurd prediction seems to be "that's what's happened in the past, so there's no reason it can't keep happening." But this ignores the nature of exponential growth. In the past, that $25,000 house you mentioned might've been 2 times that family's annual income. Now, maybe it's worth $1 million. A family buying it today would probably have a household income of $150,000 - $200,000. The mortgage would still only be 5 times their income.

However, if you continue this trend outwards at its current rate, then the math is undeniable. A family earning $200,000/year today is equivalent to a family earning $485,452/year 30 years from now. That $1 million home is currently 5 times their income, but in 30 years (at 11%), that same home will sell for $23 million, by your math.

If families are only earning $485,000/year, how would they ever get approved for a $23 million mortgage? That's 47 times their annual income! That's a BIG difference from the current 5 times their income.

That family would have to devote their entire income solely to the mortgage, with absolutely nothing left over for groceries, transportation, or taxes, for half a century, assuming a 0% interest mortgage, before they'd pay off that house! How can you possibly believe this will be the norm in 30 years?

Quote:

Originally Posted by honobob The information is out there and in this age with the internet there is no excuse for ignorance.

Oh don't mistake me, I'm not denying that real estate has experienced such growth in the past. I'm simply saying that it's clearly impossible for similar growth to persist so far into the future, because the income-to-mortgage ratio gets ridiculously out of whack. No bank will ever approve a personal mortgage for 47 times someone's annual income. How do you explain that? How do you predict people earning $485,000/year will be able to afford $23 million starter homes?

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Originally Posted by honobob Prove me wrong!!

I don't have to - time will do it for me.

[eridanus]

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Originally Posted by honobob An yet all the paired sales that I've provided show 12-16% increases yearly from 2004-2005 to 12/2007. Of course, Shiller doesn't report these sales because there is a market for their distortion of the market for people like you who are looking for information that fits your perception of reality because you're so afraid of doing what it takes to earn these results and you want to make sure other people are not moving ahead of you. Sorry but I had to call you on that!

You called me alright. We all can't have your super-secret sources of super-selective paired sales.

I'm sure, with your record, you'll be playing bridge with Buffet and Gates in no time flat.

[Milton]

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Originally Posted by kombat OK, I'm 90% certain I'm being trolled here, but just in case the OP actually takes this crazy advice, I'll respond.

The OP is already drinking the Kool-Aid.

[honobob]

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Originally Posted by eridanus You called me alright. We all can't have your super-secret sources of super-selective paired sales. I'm sure, with your record, you'll be playing bridge with Buffet and Gates in no time flat.

Public record! San Francisco is the City & County. Assessor or Tax Collector site should work. All my paired sales are listed by address. It's so easy a caveman could do it! Fire hot...Fire bad. Buffet and Gates are moving faster than me and the OTHER hundreds of thousands of owners in SF so I don't think my little involvement is gonna allow a catchup...unless they up the charity. But then you weren't crazy enough to believe that were you? You were just trying to ridicule me to take away from my factual message? At least ya gatta plan. How's that working for you?

[eridanus]

Quote:

Originally Posted by honobob At least ya gatta plan. How's that working for you?

Great, thanks for asking.

[Razor]

My lakehome is worth 4 times what I paid for it in '89. Do I believe it will be worth 4 times it's present value in 20 years? Nope.

High-end home sales soar in Bay Area

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, according to DataQuick Information Systems.
The high-end market is experiencing the opposite trend primarily because things like tight credit, prices that outpace incomes and subprime mortgages aren't of particular concern to the wealthy, who can often pay all cash, said Avram Goldman, chief executive officer of Pacific Union.


A low end $500K condo is not going to be worth $10 million in 30 years. Their value is dropping.

[honobob]

Quote:

Originally Posted by kombat - time will do it for me.

Very true.

But then you must be the smartest 32 year old in Canadia. And to speak American on top of your native language. Impressive! But when you use highly technical terms like "no frills" and "nice" houses you're over my head.

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.

Interesting and timely article below that tell of the top 20% leaving the bottom 80% behind in SF. Humm. I believe home ownership is about 19%.


Rich getting richer, poor getting poorer

Hey, I am not trying to convince you or anyone else of anything. Just remember I stopped and offered you a ride with the top 20% and it was YOU that refused because you were afraid of them infernal combustion contraptions.

In my dust, Bye! Bye!

[bots2019]

It's an issue of sustainability. No one's doubting historical rates of appreciation, but to be so certain they'll continue 30 years into the future seems a little simplistic.

Let's use Chicago as a proxy for other large urban areas (the assumption is that they're competitors with SF for business professionals, etc). Assuming Chi real estate historically appreciates at 6% (or whatever the historical rate has been), and figure SF real estate is currently 50% more expensive than a similar dwelling in Chi. If SF sees 11% over the next 30 years and Chi sees 6%, that dwelling in SF that's currently 50% more expensive becomes 6x the cost of Chi. At some point, the cost differentials become unsustainable (and yes, I know it's happened in the past ).

[honobob]

Quote:

Originally Posted by Razor High-end home sales soar in Bay Area A low end $500K condo is not going to be worth $10 million in 30 years. Their value is dropping.

Another, "Oh, my lakehome quaddruppled in value but no one will ever duplicate my feat of financial prowess! Yep, it all ended with my last deal on the doublewide!!" You people are so predictable. Funny, your link does not provide any factual documentation of your claim that $500K condo's are dropping value.

So your support is that values Can't / Shan't / Musn't increase because when you contract and extend your palms by tens you can't comprehend houses selling for "that many"?

[Razor]

Quote:

Originally Posted by honobob Another, "Oh, my lakehome quaddruppled in value but no one will ever duplicate my feat of financial prowess! Yep, it all ended with my last deal on the doublewide!!" You people are so predictable. Funny, your link does not provide any factual documentation of your claim that $500K condo's are dropping value. So your support is that values Can't / Shan't / Musn't increase because when you contract and extend your palms by tens you can't comprehend houses selling for "that many"?

I had nothing to do with the value of my property, but I do believe property values have leveled off and the real estate boom is over. I guarrentee the next 20 years is not going to be like the last twenty years. Wages are not increasing that fast.

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?

[honobob]

Quote:

Originally Posted by Razor 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]

Quote:

Originally Posted by bots2019 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]

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Originally Posted by honobob 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]

Quote:

Originally Posted by honobob 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]

Quote:

Originally Posted by Razor 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]

Quote:

Originally Posted by honobob 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]

Quote:

Originally Posted by Razor 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]

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]

Quote:

Originally Posted by 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?

You're sad.