Post: #51

(01-12-2016 03:13 PM)thoughtgypsy Wrote:  But it might not work. Lower cost housing would attract more people into the downtown area, and eventually the surrounding suburbs. There'd be a higher total number of people on the road, and higher volume might cancel out the benefits of a shorter distance commute. NYC is an example of an area with availability of dense housing, but high rental prices and horrendous traffic.

I would add to the bolded section "...and the best public transit system in the entire country, by a long shot." NYC is one of few places in the U.S. where you don't need a car.

Yes its expensive, yes it's culturally degenerate, but it's also culturally rich and stimulating. If it weren't for the exorbitant cost I would move to NYC in a heartbeat.

High density living has its ups and downs. The reason I bring up Vegas is it's got high density living but also a pretty amazing bang-for-your-buck factor.

I don't think this place is for everybody though.

Post: #52

Post: #53

In one place in London I paid 70% of after tax salary on rent and train commute to work.

The room was in a grotty 5 bedroom ex council house estate with rooms so small you could not rotate the single bed even 45degrees, no living room and no separation of toilet from shower room.

Most people in the neighbouring flats were unemployed. I moved out ASAP

Post: #54

There has been some Texas talk in this thread, and the market here in Dallas is, for lack of a better word, crippling. I think most would consider it "first world problems", but for a man busting his ass and trying to get his money right and be proactive, it's... complicated. With companies relocating here, like Toyota, all housing is stretched thin. Houses are flipped quick for asking price or more.

For as long as I can remember, everyone has been trying to make $100K per year. This hasn't changed. Why? It seems 6 figures is the cutoff for those trying to be in the top 10%ish (it was top 6% in 2005 I think) of all earners, and remains that way to this day. Good jobs seem to reboot consistently to chop and divide you back to the $80k plateau. I've seen companies cap their employees in/ around $100k for a long time... but where you could rent a house or good condo or apartment several years ago for $1000/month, we are now at low end $1300 to $1800 (with good logistics). I pay around $1500 per month for a gated community with a single car garage in the suburbs. Obviously owning a home can be done for $1000 per month, but the tradeoff was worth it for a lot of people until they wanted to settle down and raise a family. They could rent a decent apartment for the same $1000 while they were single.

It's not that I really want the work and responsibility of home ownership, I am just being forced to make a choice about my future. Do I continue to deal with the squeeze of income vs. rising rental costs, OR do I change my living conditions on the short term (live in bum-fuck nowhere/ roommates/ low income, high crime neighborhood) and save my ass off to buy a house with the knowledge a housing bust/ devaluation on my investment is likely and perhaps imminent?

If you have some insight on this, I would really appreciate it. Past experience, real estate knowledge, whatever you got. Thanks in advance for your time.

Post: #55

(01-12-2016 11:55 AM)redpillage Wrote:  Exactly. An old friend of mine just moved to San Francisco. He's 55 years old and has been writing software since he was in his early twenties - over a quarter century of experience. He snagged a job at Google but they didn't even give him a senior software engineer title - he's only a software engineer. Makes about $200k if you include his stock options but he also pays almost $4000 for a 400sqft shoebox in Mountain View. I know that city and it's a cultural wasteland - NO WOMEN! (well, he's an old nerd so he doesn't really care).

Anyone living in the SF Bay Area right now who is not clocking at least $250K is - literally - insane, especially living in the city. I know some people are under rent control, but even then you are in a $1400-2100 1BR in a dilapidated, likely not earthquake-proof building.

That being said, some of your friend's wounds are self-inflicted. He could pay 1/3 what he is now, get a nice studio in San Jose, and have an easy 20 minute commute to google. Shit, there are 4 BR houses in SJ on Craigslist for under $3500.

Post: #56

I agree with GA, all this Texas talk comes from people NOT living in Texas.

Back a decade ago the Texas RE market started to heat up and has not scaled back as the 08-2010 recession did not hit us that much due to....oil bishes!

A lot of people from other states have been moving in and taken up sweet vacant real estate, leaving us "Real Native Texans" with less units to choose from. Nearly everyone I know is not from elsewhere, and kids my age who were born here have at least one parent from another state.

Back then a 2-bedroom apartment in the ghetto part of the suburbs was going for 600-700 bucks with all bills paid. Now it's 1100-1200 (2 bedroom) plus bills AND good credit. How many apartments in the ghetto require good credit?

Exactly.

A decent 1BR apartment is 1250+ and good ones are 1500+. This hold true even in places like Dallas or Houston. Texas is starting to face some of the problems Cali and NY are facing. Shit, Midland is looking like a good deal now. 1 month free, a free TV and all fees waived.

Post: #57

(01-15-2016 01:51 AM)Cattle Rustler Wrote:  I agree with GA, all this Texas talk comes from people NOT living in Texas.

Back a decade ago the Texas RE market started to heat up and has not scaled back as the 08-2010 recession did not hit us that much due to....oil bishes!

A lot of people from other states have been moving in and taken up sweet vacant real estate, leaving us "Real Native Texans" with less units to choose from. Nearly everyone I know is not from elsewhere, and kids my age who were born here have at least one parent from another state.

Back then a 2-bedroom apartment in the ghetto part of the suburbs was going for 600-700 bucks with all bills paid. Now it's 1100-1200 (2 bedroom) plus bills AND good credit. How many apartments in the ghetto require good credit?

Exactly.

A decent 1BR apartment is 1250+ and good ones are 1500+. This hold true even in places like Dallas or Houston. Texas is starting to face some of the problems Cali and NY are facing. Shit, Midland is looking like a good deal now. 1 month free, a free TV and all fees waived.

I will concur with this as well for the most part.

If you want downtown logistics in much of flyover country now (not all but much of it), you are looking at $1200-1400 and up for something decent. However, the wages in many of these areas really aren't moving up with the cost of living. With rents that high, I would argue you are better off staying in more traditional expensive areas in many cases for the higher income and greater career options.

Post: #58

(01-12-2016 11:39 AM)redpillage Wrote:  I used to live in California until about 2012 - in my two decades there I saw rents increase by about 500%. Meaning whereas you could rent a very decent 500 sqft apartment in a safe/hip neighborhood for about $700 in the early nineties you are now probably paying over $3k for the same.

When I moved to Spain I was shocked how low rents were over here. Currently I'm paying under $2k per month for a furnished 1300 sqft luxury apartment in the city center. I've got 14 feet ceilings and five balconies with an amazing view - the furniture mostly consists of real antiques - some of them several hundred years old. In NYC, S.F., or L.A. I would probably pay over $15k per month for anything equivalent. So it's a complete non-brainer for me.

Can confirm. Also live in Spain in a luxury apartment. Life here is about as good as it gets.

Post: #59

(01-12-2016 12:29 PM)nomadbrah Wrote:  Most guys living the digital nomad lifestyle do so out of need not choice. Maybe not direct need, but because society marginalizes young entrepreneural men, first through the increasingly passive learning university system, second through crowding out meaningful private employment through outsourcing and government meddling.

In reality, what is being a digital nomad, if not a gold digger in Yucon or an oil-man in Alberta.

Most digital nomads hopefully realize that they are indeed in the same situation and would be better off leveraging their skills and experiences into more traditional fields eventually.

All in all, going digital nomad, is still not in any way different than what men have done at all times, leave home to try their luck abroad.

The biggest realization we have to come to is that the post-war boom economy was a historical anomaly in a history where the 1% rule the 99%.

The 1% does not rule the 99%.

The 1% is the highly paid professional class doing the bidding of the .01%, who are the real shot callers.

Your average 1%er is a lawyer or mid level finance guy in a major city that wears golden handcuffs. He makes a few hundred grand a year and has a shit ton of debt and expenses. No way is he getting off the treadmill he runs on.

He works 70-110 hours a week to serve his masters, the people who own companies or have major equity and are UNHW status.

Post: #60

Quote:OR do I change my living conditions on the short term (live in bum-fuck nowhere/ roommates/ low income, high crime neighborhood) and save my ass off to buy a house with the knowledge a housing bust/ devaluation on my investment is likely and perhaps imminent?

If you really want to get ahead, you should do this. Make sure you keep a gun on you though

Post: #61

(01-15-2016 01:45 AM)Stun Wrote:  Anyone living in the SF Bay Area right now who is not clocking at least $250K is - literally - insane, especially living in the city. I know some people are under rent control, but even then you are in a $1400-2100 1BR in a dilapidated, likely not earthquake-proof building.

That being said, some of your friend's wounds are self-inflicted. He could pay 1/3 what he is now, get a nice studio in San Jose, and have an easy 20 minute commute to google. Shit, there are 4 BR houses in SJ on Craigslist for under $3500.

Must disagree there, Stan - I lived in the Bay Area and know it well. If you life in San Jose and want to get to Google Central you may be able to use surface streets but most likely you'll be taking the 280 to the 85 or the 87 to the 101. At night that drive will take you 20 to 25 minutes. During commute hours you may be on the road 1 hour each way.

Post: #62

(01-15-2016 01:51 AM)Cattle Rustler Wrote:  A decent 1BR apartment is 1250+ and good ones are 1500+. This hold true even in places like Dallas or Houston. Texas is starting to face some of the problems Cali and NY are facing. Shit, Midland is looking like a good deal now. 1 month free, a free TV and all fees waived.

In Houston, it was the oil boom. Arguably the same with Dallas.

But in Austin, it's literally Tech people moving from the Bay Area with a Cali housing mindset. 250K for a 4 bedroom was a no brainer in the mid 90's. Where locals were buying @ 170-190.

Now....

WIA

Post: #63

I should write a real post about this, but here, I'll teach each and every one of you how to get rich relatively easy. And I'm not even joking.

Step 1: Stop throwing away your money. Profit = income - expenses. I know, profound. If you make $100k a year, and spend $90k a year of it, you're making 10k a year. If you're making $60k a year but keeping $30k, you're making $30k a year. You know what you don't need? Cable. Netflix. An expensive car (mine is an old paid off truck that people think is cool). A giant house with 10 bedrooms. Designer clothes (I wore a Marine Corps sweatshirt with paint all over it today because... fuck it). As people make more money, they tend to spend more money on stupid crap. Live basic, and cut out monthly expenses. Make sure your monthly income always exceeds your expenditures. I'm not saying never go out to lunch with people (you should go out to lunch with people frequently), I'm saying don't be trying to keep up with the guy next door to have a bigger TV with more channels, a newer car, or the latest iPhone.

Step 2: If you're still young, get into a career that will make you money. Some good choices: lawyer (yes, really), engineer, architect, doctor, other healthcare professional, stock broker, financial sector, accountant, etc. You'll probably never get rich from any of these professions ($150k - $350k a year), but you'll generate enough income to be able to do other shit - provided you're not wasting it all on a big house, fat wife, and kids. If that's not possible, formal education is probably a waste, and you're better off starting a business. Don't go into debt for a degree in stupid shit like gender studies or social work. A construction worker who makes $75k a year and has no student debt is better than the gender studies major working at Starbucks for $12 an hour. And the construction worker actually has useful skills.

Step 3: Start a business. You know why I suggest being a lawyer, doctor, engineer, architect, realtor, accountant, dentist, etc? Because you can open up a relatively profitable private practice on the cheap, plus a lot of these skills are independently useful. Oh yeah, and you'll never have to worry about getting laid off or fired. If that's not possible, there are other businesses I know that make good money - car washes, jewelry stores, corner markets, cigar shops, etc. You can get people to work for you, generating mostly passive income, which will then allow you the time to...

Step 4: Invest money into real estate. I know, you can save $1k a year, and in 50 years you'll have $50k, which would basically provide you enough money to live for about a year in America without having to do anything. Or you can save money, buy property, rent it / flip it, and get a good ROI. I bought my first property at short sale for $119k and sold it for $240k after 7 years. Yes, over $120k in Hank's pocket just for buying a property, sitting on it, and selling it. Real estate is the best way to make money, and there are always opportunities with foreclosures and short sales. Real estate is the way regular people can get rich.

You'll never be financially free showing up to work every day at 9am, hoping for a raise, and socking a way $1000 a year. Instead, start businesses, invest, and profit. Then spend your time doing whatever the fuck you feel like doing.

Post: #64

So many people in NYC spend on their apartments like they do on clothes, cars, drugs, etc, a status symbol.

Post: #65

(01-12-2016 02:35 PM)Veloce Wrote:  Tons of people are moving here every year, everyone I meet has the same damn story as mine; LA was too expensive, wanted to upgrade quality of life etc. All the locals around here I drove when I was doing Uber was either from LA, SF, or NYC.

This has been the story with Vegas for a long time and I imagine it will be for a long time to come... The issue is a lot of the people leave as well. There is probably not a place in the US or maybe even the developed world with a resident turnover rate like that of Vegas.

Post: #66

(01-15-2016 09:18 PM)HankMoody Wrote:  I should write a real post about this, but here, I'll teach each and every one of you how to get rich relatively easy. And I'm not even joking.

Step 1: Stop throwing away your money. Profit = income - expenses. I know, profound. If you make $100k a year, and spend $90k a year of it, you're making 10k a year. If you're making $60k a year but keeping $30k, you're making $30k a year. You know what you don't need? Cable. Netflix. An expensive car (mine is an old paid off truck that people think is cool). A giant house with 10 bedrooms. Designer clothes (I wore a Marine Corps sweatshirt with paint all over it today because... fuck it). As people make more money, they tend to spend more money on stupid crap. Live basic, and cut out monthly expenses. Make sure your monthly income always exceeds your expenditures. I'm not saying never go out to lunch with people (you should go out to lunch with people frequently), I'm saying don't be trying to keep up with the guy next door to have a bigger TV with more channels, a newer car, or the latest iPhone.

Step 2: If you're still young, get into a career that will make you money. Some good choices: lawyer (yes, really), architect, doctor, other healthcare professional, stock broker, financial sector, accountant, etc. You'll probably never get rich from any of these professions ($150k - $350k a year), but you'll generate enough income to be able to do other shit - provided you're not wasting it all on a big house, fat wife, and kids. If that's not possible, formal education is probably a waste, and you're better off starting a business. Don't go into debt for a degree in stupid shit like gender studies or social work. A construction worker who makes $75k a year and has no student debt is better than the gender studies major working at Starbucks for $12 an hour. And the construction worker actually has useful skills.

Step 3: Start a business. You know why I suggest being a lawyer, doctor, architect, realtor, accountant, dentist, etc? Because you can open up a relatively profitable private practice on the cheap, plus a lot of these skills are independently useful. Oh yeah, and you'll never have to worry about getting laid off or fired. If that's not possible, there are other businesses I know that make good money - car washes, jewelry stores, corner markets, cigar shops, etc. You can get people to work for you, generating mostly passive income, which will then allow you the time to...

Step 4: Invest money into real estate. I know, you can save $1k a year, and in 50 years you'll have $50k, which would basically provide you enough money to live for about a year in America without having to do anything. Or you can save money, buy property, rent it / flip it, and get a good ROI. I bought my first property at short sale for $119k and sold it for $240k after 7 years. Yes, over $120k in Hank's pocket just for buying a property, sitting on it, and selling it. Real estate is the best way to make money, and there are always opportunities with foreclosures and short sales. Real estate is the way regular people can get rich.

You'll never be financially free showing up to work every day at 9am, hoping for a raise, and socking a way $1000 a year. Instead, start businesses, invest, and profit. Then spend your time doing whatever the fuck you feel like doing.

I unreservedly agree. Perhaps I may add some additional color to your steps.

On #1: When you are at the beginning of your life, you are in capital accumulation stage. There is no such thing as "saving too much". If you follow HankMoody's advice on cutting out unnecessary expenditures and find yourself saving 50% of your take home pay, GREAT. There is nothing wrong with this. If anything, I think 50% savings rate is baseline and not anything to write home about, but the average person (read: idiot) pats himself on the back if he isn't in debt by year end.

On #2: Don't choose your career based on passion. Passion is a horrible way to choose a career. Passion is usually a byproduct of what you get good at anyway. And a great way to kill passion is to be forced to do it for bottom dollar and abusive clients.

Nothing to add to step #3. Just do it.

I would argue that #4 can be generalized into "invest". Real estate has been great during living memory because of a bull supercycle, leverage (only way for a regular person to get a six figure loan), and accommodating government policies. But you could invest in the stock market instead, provided you spend the time to fully understand it. Or you could invest your capital into one of your own businesses from step #3. As Munger says, know your circle of competence and play within it.

Post: #67

OP, how old are you? If you're already out of college and started your career then any advice I'd have about picking a career would be useless. But if you're still young, then like HankMoody said, pick a career where there is money, not where your dreams lie. Your dreams and passions unfortunately are worth nothing if no one is willing to pay for it. Your dreams are what you do if you had money and you can do that once you've made it.

I share the same view as HankMoody in that investing in good realestate will help you get rich slowly but surely.

Common barriers to getting ahead are things like student loans, credit card debt and car loans.
It is not enough to live a frugal life as there is a limit ($0 spent), whereas there is no limit to what you can earn. You need to have your career in order, or at least earning enough to be able to save a good amount while living a life with few expenses. I think of it has having Toyota tastes on a Lexus income.

My rent is cheap, just over 10% of my monthly income (I moved to another country but I still have my house back home generating passive rental income) because I live in a shoebox of a room and share a house with other people, but you need to ask yourself how far are you willing to go to succeed? Because doing so includes doing things you don't like. If you want to succeed at anything, you will do whatever it takes if you truly want it.

Once you've scrimped and saved for a couple of years, (it took me about 4 years to save a deposit while living at home to cut costs), you should have a sizable deposit. 4 years might sound like a long time, but in 4 years time, you'll wish you started today.

Buy in an area that you know and if the sums work. If you structure your finances properly, you can rent out the spare rooms and can write off all the expenses associated with owning such as mortgage interest and council tax (or equivalent where you live).

Post: #68

It's because people are stupid. They buy a house that is overpriced and think that the house prices will go up indefinitely. When they want to sell the house, they want to sell it at a price that is faaaar above the actual value of the house. There are always some desperate people around or people without knowledge that want to buy an overpriced house.

But when you can't find people to buy your house, the whole system will collapse. You're forced to sell it at the actual value of the house, which of course is lower than the mortgage on the house.

You see the same thing in the rental market. The rent is extremely high, because there are always some people around that want to pay that price, because they are desperate and have no other choice. But the rent doesn't reflect the real value of the house. It's a system based on forcing people to pay prices that are too high and since housing is a basic need in life, you don't have a choice.

Post: #69

Regarding putting money back into the economy, the high rent prices must goto someone along the way so even though the renter may not be able to afford to splash out the landlord most probably will be able to or the people he brought the building from will.

In the UK (Outside London) the prices of houses have gone way beyond reach for the average person wanting to buy a house as a first time buyer not on London wages, its almost as if the banks want to keep the prices high to encourage more debt and keep everyone slaving away for the rest of their lives paying their mortgage....

Rent prices are also on the increase but as house prices can also go down as well as up it can be a good option for many people, if I had the money to buy a house outright I would be thinking twice about it right now and probably rent.

Post: #70

(01-12-2016 08:43 AM)el mechanico Wrote:  I could swear the majority here has been pro rent don't buy since I came here. My mortgage is half of what my rent here would be now.

I think the G started this hype along with not having a car.

True. I think many people wind up planning "I'll just to rent now which keeps me mobile, and frees me up from being tied down to a mortgage in a house I might not be able to move in an unstable market."

So often it seems, if something halts that move you planned, the mobility per se.. you look back over 5+years of renting and realize it would have been better in a partial fixer-upper than in the landlord's coffers.

I did that with a house I rented for dirt cheap throughout my 20s and early 30s. Despite it being so cheap, I basically bought that piece of shit house for my landlord.. which I regret.

Post: #71

I really don't get the allure of owning your own home.

You gotta make a down payment, pay property taxes, closing costs, insurance, maintenance, upgrades, and of course pay your mortgage for 15 to 30 years at 5 percent interest.

I'm sure there are some other things I missed.

Post: #72

(01-16-2016 06:23 PM)renotime Wrote:  I really don't get the allure of owning your own home.

You gotta make a down payment, pay property taxes, closing costs, insurance, maintenance, upgrades, and of course pay your mortgage for 15 to 30 years at 5 percent interest.

I'm sure there are some other things I missed.

I understand what you're saying and mostly agree with you. Under certain circumstances, 'owning' a home can be attractive though. The benefits are:

1) Income goes towards an asset you build equity in, as opposed to wasted on renting. This way your payments for a commodity (housing) can be used also as an investment opportunity.
2) Interest payments are tax deductible if you itemize, lowering your effective monthly housing payment
3) For a given area, once you've paid off your mortgage your property taxes should be considerably less than it would to rent in the same area.
4) Much more freedom to do home improvements, and generally use the property however you want, within legal limits. This is a huge deal for many people.

There are additional downsides though

1) You're stuck in the same area for the next 30 years. Seriously puts a damper on your lifestyle mobility. Harder to move for more attractive jobs.
2) Could actually be a really bad investment. Closing costs and down payments wipe out a huge amount of capital which could otherwise be accruing interest at an exponential rate. Volatile market could put you underwater. If the cost of renting is much less than your mortgage payment, that's additional money you could put towards investments that would be accruing interest at an exponential rate. I highly doubt housing values will grow at a faster rate than a post-correction stock market.
3) That's a ton of money tied up in a single asset which is highly illiquid.

Post: #73

(01-16-2016 04:31 PM)Ingocnito Wrote:  

(01-12-2016 08:43 AM)el mechanico Wrote:  I could swear the majority here has been pro rent don't buy since I came here. My mortgage is half of what my rent here would be now.

I think the G started this hype along with not having a car.

True. I think many people wind up planning "I'll just to rent now which keeps me mobile, and frees me up from being tied down to a mortgage in a house I might not be able to move in an unstable market."

So often it seems, if something halts that move you planned, the mobility per se.. you look back over 5+years of renting and realize it would have been better in a partial fixer-upper than in the landlord's coffers.

I did that with a house I rented for dirt cheap throughout my 20s and early 30s. Despite it being so cheap, I basically bought that piece of shit house for my landlord.. which I regret.

If guys think that renting is better than owning just because they are not tied to an non liquid asset they are just lying to themselves as they put cash into another mans pocket.

My mortgage is cheaper than my rent would be. If I had to rent my condo I would be paying $3000 a month. If I leave for a while I can put it on a short term rental agency and they can put $3400 to me after their cut. Rental vacancy in my neighborhood is under 1% and has been for years. After my mortgage and fees this could put almost $$1700-$2100 a month in my pocket cashflow.

Post: #74

(01-16-2016 06:23 PM)renotime Wrote:  I really don't get the allure of owning your own home.

You gotta make a down payment, pay property taxes, closing costs, insurance, maintenance, upgrades, and of course pay your mortgage for 15 to 30 years at 5 percent interest.

I'm sure there are some other things I missed.

1. Your rent never goes up. Right now my mortgage costs way less than it would to rent in my neighborhood. I pay less than the renters across the street and have twice as much space.

2. Eventually your mortgage gets paid off, then you pay $0 a month (except for taxes and utilities) to live there

3. If you're not an idiot, the value of your home goes up

4. If your landlord stops paying their bills, you've lost your home. If your landlord wants to sell the place, you've lost your home. Home ownership means being in control of your space.

5. Building shit, knocking down walls, exposing brick, and making improvements is fun.

The real problem is people buy their first home, sell it, and then use that equity to buy a bigger house that they can't afford. What they should have done is rented it out, bought a second house, and then let someone else pay their mortgage.

But hey, if your goal in life is to not have any responsibility, more power to you. I know plenty of guys who rent because they don't want to be tied down to a piece of property. If renting fits your lifestyle, God bless ya.

Post: #75

(01-16-2016 12:20 PM)Marcus187 Wrote:  It's because people are stupid. They buy a house that is overpriced and think that the house prices will go up indefinitely.

That's not why people buy houses. Not in America at least.

WIA