You have really bad investing instincts if you think that it's a bad time to buy when valuations are low... Don't feel bad though, most people are similarly challenged in this area. Society wouldn't function as well if everyone were as astute as His Excellency, The_Conquistador. We need a middle and lower class to maintain order.
The problem with real estate is very few people in this country actually own their own home. They have mortgages which they are upside down on in some cases. So for most people in this country, real estate is actually worse than paper assets. Paper assets don't require you to make a payment every month to the bank and to tax appraisal office.
um, but the alternative is to pay rent, so either way you are making $ payments, whether to a landlord that is paying mortgage/taxes or you do directly. Additionally, you have to factor in that paper assets aren't being bought with leverage. So the comparison should be say, spend $250k cash on a house or $250k cash on stocks,etc. The house is defacto paying some dividend in saved rent. I see the merits of both arguments regarding which asset class is better, but at the end of the day if you're only going to make one investment, I'd go with a home as you can always live in it and the drop in value only affects you when you sell or refi...
Certainly all true. But, to me, the solution to that is to simply increase the max IRA contribution limits. My point is that we already have a system for that, so if the objective is to help people save money for retirement that they can invest and maximize, we already have a system in place for that. The point of SS is to be different than IRAs and retirement accounts - it's to be a security blanket. I don't think privatizing does any good. If you don't believe we should have it - fair enough, then the solution is to scrap it. But if we do want to have a security blanket system, letting people invest that money on their own is the worst of all worlds. Then you have a security blanket which isn't actually secure.
I certanily agree with that. I find it very unfair that employer ran programs you can put in $10,500 for a SIMPLE and $15,500 for a 401(k), plus you likely get a 3% match, but if you have to get your own plan you can only put away $5,000. Similar to the evil that is the health insurance system of getting a tax free plan trough your employer, but if you get private insurance it is subject to the 7.5% AGI medical section of itemized deductions. Not that at this point in my life that is a problem, though I wish my employer offered something so I could get the match like I did with my prior employer, but I'll live. In 2008 I actually qualified for a 50% tax credit on contributions that I made, but won't in 2009.
The problem with SS is we are trusting the government to keep our money safe and NOT SPEND it. I think that is what worries me when I hear they have borrowed against it. Now with the ever increasing debt, I worry about the ability to replenish it. My fears may be completely off base, and I truely hope some of y'all can show me just how wrong I am. As for now, I'm counting on what I can save and the stock market rebounding and future investments that I will make. I'm not counting on seeing any SS $'s. If I do get any, it will be like a mini bonus.
I think it's an excellent time to buy, and I'm doing that. That has nothing to do with this discussion, though. I'm thinking privitazation of social security would be a tough sell right now if you told people who are 70 that their gains from when they were 60 are now history. I'm thinking people would value stability in a time like this...more than the market affords.
Exactly. They could put back a million dollars a day from the time of Jesus and still not cover the debt. That's not safe to me.
I actually agree with you. I think purchasing a home is generally a safer investment than buying stocks even though homes are not very liquid. However, I don't consider the house you personally live in a typical investment because if you sell it, you have to come up with a replacement of some sort either in rent or purchasing another home. The only good that comes from your house going up in value is that you can borrow more. I'm talking about investment made to grow your personal wealth. The problem I am stating is that real estate purchase made for investment purposes such as second homes or for renting out is generally made with borrowed money, which increases risk. The investor can possibly owe much more than they put into the investment.
I look at Social Security, personally, as part of a basket of income sources for retirement, and as the last refuge for those who are desperate for the means to live, regardless of why they have reached that circumstance. You should count on Social Security being there. You shouldn't count on it being "enough," but it will be there. It's part of the compact between the citizens of the United States and their government, one of the things that binds us together. We certainly need it, not having the tradition of taking care of our parents and grandparents by taking them into our homes when they can no longer manage for themselves, like in many other cultures around the world. Here, we tend to park them somewhere. So those folks need SS to manage on their own, for as long as they can. My take, at any rate. All I can manage at the moment.
