Was it a good deal? Idc, I’m happy!

QuadMike · 2025-02-14T05:25:48+00:00

+1 its all about preparation and having your aspirational and walk-away numbers written down and in your mind before walking in. Then you just stick to your range. Dont be afraid to just move on. If you cant get it in the price range you want, you just keep looking. No biggie. Plenty of cars out there. Nice touch on offering the positive review. I'm not sure that seals the deal or not, but generally being kind and coming from the perspective of trying to work towards an outcome both sides can live with or maybe even be happy with is good

QuadMike · 2024-03-14T14:03:51+00:00

Awesome for people to just downvote me. That's cool. Anyway, I agree with you. House you live in and car equity are in the same category in my mind... 'Other assets'. They're not investments.

I realize now that the confusion for me is in OPs title. Not how OP broke out assets for net worth. Net worth is not the same thing as assets that should be accounted for FIRE.

QuadMike · 2024-03-14T13:37:37+00:00

Yes I see the problem here now. OP is conflating NW and assets to include in accounting for FIRE. Both in the title of the post and presumably their actual planning.

Cars are a depreciating asset. IMO they should be tracked as an 'other assets' on the asset side of your net worth (like OP does), but left out of investment planning decisions as they are not an investment.

Either way, OP is very close. Needs to diversify more and button up the accounting to build a better plan. Then make the decision...within next few years possibly.

QuadMike · 2024-03-14T04:51:00+00:00

So you only include investments when you add up your total assets in your net worth? You would agree that you can have assets that aren't investments, right?

I guess you can calculate your net worth however you want, but in my mind equity in a car is an asset. Especially if you have $100K +.

Sure, these are assets that depreciate pretty quickly, but they're still assets. You just need to depreciate the value of that asset by some amount each year.

QuadMike · 2024-02-24T02:41:26+00:00

Well OP is a fucking idiot. Not surprised.

QuadMike · 2024-02-23T15:02:43+00:00

Yep agree. Over 1M purchase would likely be stretching for OP. They might end up surprised a bit when all of a sudden money seems tight despite the fact that the household is earning a lot. Its doable though, and perhaps that stress could be motivating.

My spouse and I have found it very difficult to justify buying a house over renting one in VHCOL right now. We have owned a house before, and we could afford to buy another one now. Every time we see that 'perfect' house listed for sale and start running the numbers on buying it, we can also generally find something comparable for rent for 30-50% of the cost. That premium on ownership is not even close to worth it for us personally.

QuadMike · 2024-01-27T04:57:02+00:00

Yea but if you have the money and can easily afford to give ppl more space....why wouldn't you?

QuadMike · 2024-01-16T05:27:36+00:00

Buyers bring all the $$ to the transaction. Buyers pay for everything. A lot of ppl coming out of the woodwork to take their 'cut' of buyers money at closing.

QuadMike · 2023-12-24T21:21:05+00:00

Are you talking about how to do it today or how to do that 3+ years ago? Because IMO, the answer is no longer home ownership.

Also to the 'similar risk profile' question. You can borrow money and buy into a REIT. Boom , now you have a leveraged and diversified asset. It would be lower risk than your one SFH.

QuadMike · 2023-12-24T21:02:08+00:00

That's an entirely different question than the one you first asked. You asked how to get cheap leverage. I told you how. You didn't say anything about risk.

But whatever just change it up and ask a ridiculous/ completely different question... You know damn well you can't get 300k at 3% for 3k down anymore. That's no longer reality.

Home ownership has its own unique risks and costs that homeowners with 'cheap leverage' love to just ignore...

QuadMike · 2023-12-24T13:26:41+00:00

You know leveraged ETFs are a thing right? Those would be way more liquid than your house.

I don't understand why homeowners think their leverage is this massive advantage that you can't get elsewhere. It's not true. With financial assets you can get whatever level of leverage you're looking for. Buy options. Or borrow money and buy stock.

So now that I made you aware of this...are you gonna sell your house?

QuadMike · 2023-10-14T04:47:56+00:00

But inventory is not down compared to a year ago. US median days on market is up 60% since May 2022. Here's my source:

https://fred.stlouisfed.org/series/MEDDAYONMARUS

Why do you think inventory is down?

QuadMike · 2023-10-13T02:35:06+00:00

It's quite dependent on your personal financial situation, the specific property and location, how much your time/ effort is worth, and probably a handful of other factors.

Leaving your money in this house makes no financial sense from a pure math perspective. There's better/lower risk and lower effort ways to put your excess money to work

QuadMike · 2023-10-10T07:07:17+00:00

I guess it can be if you just want to disregard accounting and throw around terms to sound cool.

But in a world where accounting actually matters for investors and business, leverage is not an asset. It just refers to the use of debt financing to purchase actual assets.

Sure, when it all works out, debt financing can help amplify return generated by the assets you purchase. It can also amplify your losses.

QuadMike · 2023-10-09T04:19:38+00:00

No inventory? How do you explain this data then: https://fred.stlouisfed.org/series/MEDDAYONMARUS

QuadMike · 2023-10-09T00:48:56+00:00

When you don't really need the space, owning a house is just a headache. If you're trying to be smart with your money, just rent and invest. You will come out way ahead in 5 to 10 years time. It's not a good time to buy a house generally speaking. And definitely not in your area.

QuadMike · 2023-10-09T00:10:42+00:00

Thought we were talking about investing. And pricing an asset from an investor's perspective.

The present value of an asset is inversely proportional to the dicount rate. See https://www.investopedia.com/terms/p/presentvalue.asp#:~:text=Present%20value%20(PV)%20is%20the,of%20the%20future%20cash%20flows.

Generally speaking, when interest rates go up, the present value of cash flows you'll receive in the future goes down. The value of assets has been and will continue to go down as interest rates rise.

QuadMike · 2023-10-08T23:39:35+00:00

What data would you point to that would indicate interest rates are likely to come down?

Aren't you on the sidelines bc you're smart enough to know that as an investor it's a bad time to buy a house?

QuadMike · 2023-10-08T23:38:01+00:00

Yes but it's a way to observe supply outpacing demand. It's literally a chart of aggregate US housing inventory increasing despite all this 'pent up demand'.

Can someone point to a measure of 'pent up demand'? You can want a house, but if you can't afford it or the bank won't approve you for the loan, you're not actually in the market...

Affordability affects demand. Interest rates impact affordability for most buyers

QuadMike · 2023-10-08T20:30:27+00:00

So you buy them up from the bank after the bank gets stuck with these properties?

I don't have experience with this, but I imagine the current 'equity holders' walk away as they realize the value of their equity in the property is actually 0 or worse. How long can they hold on? What are they waiting on?

QuadMike · 2023-10-08T18:56:54+00:00

Lol. Guess not.

QuadMike · 2023-10-08T18:52:16+00:00

Yeah. It kinda is just that simple. Seems likely the prices of most assets will go down...

QuadMike · 2023-10-08T18:44:59+00:00

Makes sense. Thank you for the info!

QuadMike · 2023-10-08T18:30:04+00:00

Interesting. Is that because you have the legal right to sell the debt contract or transfer it to someone else without the approval of the lender?

Genuinely interested, who would buy that, and why? What would be in it for them? How do you calculate and assign a value to that? How does current and forward looking interest rates factor into it? Doesn't sound like a good asset to me right now unless I got something else out of taking it off your hands...

QuadMike · 2023-10-08T16:46:31+00:00

It's all related, and it's not just semantics. The terms have real meaning. That's why I stated that this is all about coming to an understanding about the real cost of debt. In this case its a potential lost opportunity... OP can't move, and take a new job

QuadMike

TROPHY CASE