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So, to buy the house, I took a sizable chunk from my 401K. One that can only be paid back in one lump sum, or over the course of 5 years. I'm a year in and had pretty much given up on being able to pay it back early. Obviously, that means I lose the compounding over 5 years too, which means it's a lot more in lost potential than just the number withdrawn.
Anyway, I'd gotten used to the smaller check and stopped even considering paying it back and eventually just got used to the money in the account I had access to.
Then yesterday, it hit me that my big daddy baller huge down payment on a new car...was from borrowed money that I was already paying myself interest on, losing compounding interest on...to then borrow ANOTHER huge sum of money to get a new car. So, I'll take a much smaller loan to have enough to pay off the huge one we took for the house (in addition to our savings) and get rid of that deduction.
So, basically...I realized I'm not as hood rich as I thought I was and instead of a 500 dollar car payment going out, I'll have 500 going back on my check from the repaid loan.
Should have been more clear to me. Be patient now, to ball out later in life. I can dig it. Wife was ecstatic that I made that decision. I told her I'll keep the TL happy for at least another year or two and we'll revisit when it's my own cash that's in hand for down payment or maybe outright purchase.
Plus, by then, the newer gen V's will have been out for longer and hopefully the older ones will depreciate into the 20's where I can hopefully save up to buy cash.
Being an adult sucks. I had to come to the realization as well J. My wife was happy, I was like you spoiled ass little shit.
BUT, I did finally figure out what I want.
In 2-3 years I will lease a S4 give that bitch back year 3. Then go lease a 3 Series then give that bitch back in 3. By then the Explorer will be 8-9 years old. Then I'll be hood rich living in a fat house and figuring out what the fuck I want to buy next.
We got a killer deal on our house...it was a crazy hubzu auction site foreclosure deal...it was definitely worth getting the loan to buy it...good amount of instant equity, mortgage lower than rent would be...
If you have the cash on hand and can earn more with real estate than what it's doing currently - yes.
If you can take a loan and earn more that the loan interest - yes.
Absolutely!
that's wholly the reason i decided to take a loan out for my TL. 1.99%. over 5 years? If i can't make 1.99% return in the stock market over the next 5 years, i'm fucking up. bad...
time value of money, it's such an important economics lesson that I learned in college.. Compounding interest is your fucking best friend!!
If you have the cash on hand and can earn more with real estate than what it's doing currently - yes.
If you can take a loan and earn more that the loan interest - yes.
Absolutely!
Tell that to my brosef whose San Jose townhome lost equity/2..
Couldn't rent it for 2/3 of his mortgage in '09..
When he did get a renter, didn't pay last 6 months of lease, finally evicted..
Spent thousands painting and fixing shit the bitch renter broke..
floated house another 6 months trying to rent before saying fuck it..
When he bought it and later turned into investment property, he was making several hundred over the mortgage every month.
He went from making $150k/yr living large to making $150k/yr paycheck to paycheck in that time.
Tell that to my brosef whose San Jose townhome lost equity/2..
Couldn't rent it for 2/3 of his mortgage in '09..
When he did get a renter, didn't pay last 6 months of lease, finally evicted..
Spent thousands painting and fixing shit the bitch renter broke..
floated house another 6 months trying to rent before saying fuck it..
When he bought it and later turned into investment property, he was making several hundred over the mortgage every month.
He went from making $150k/yr living large to making $150k/yr paycheck to paycheck in that time.
Sooo.... sounds like he *couldn't* make more than the interest on the loan.
But seriously, fuck California real estate speculation. I'd rather burn a pile of money in the back yard than try to buy something there without just a "fingers crossed and best wishes" chance of not losing it all.
Of course, YMMV on everything. Location location location. Never trust a junkie. Etc.
Chinese people buying up homes with cash outchere.
yeah those fuckers are ruining the market for us out here...
but on the otherhand it's like an asian gentrification (? is there a word for that, Cul0? you would know mr english teacher)
so my parents house should appreciate very well
My wife's best friends brother makes it look easy though. He had 3 properties that he rented out. He was renting one to us before we bought.
Has 2 Porsches and lives in this. 2 house on one lot, he had the 2nd house built onto his property. He was selling is 2 years ago but the person who was buying it didn't have the funds after all. 800k
This is the 2nd house, I believe it's like a 2 bedroom...
01-07-2016, 07:52 AM
