If you had to pick just 1 car to keep, which one would you keep? (993 vs 740i)
#151
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Join Date: Apr 2003
Location: Tampa, Florida
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As far as real estate goes just look at the case shiller index for your area it always returns to a baseline. Demographics aren't going to help either baby boomers will be retiring and selling their mc mansions to the next much smaller generation whose wages haven't risen, but their debt has.
I'm not a doctor but I can't think of any ailments that would render one unable to work as a dental hygienist while still allowing skiing to be a pleasurable experience. My apologizes if there is one.
#153
Three Wheelin'
I am finally saying "uncle". We're definitely not downsizing and selling this house. Our daughter is still in school in this area and we're not moving, period. We don't need to right now. Plus, someone is renting out part of our home (the apt above the garage) so our cash flow is much better. Our $2133 mortgage payment went to $1333 a month for an almost million dollar house. That's a good thing. You can't get a 1 BR apt in Bethesda MD for $1333 month. There's just no reason to sell this house.
As others have said, it appears you are putting your image before reasoning.
If you sell the house and cars and put the $1 mil cash or whatever equity you have into a fixed rate investment, I am sure you could easily cover a monthly rent and your utilities on a decent apartment as well as a storage unit for the excess furniture. You could even offer 6-12 months cash up front for a reduced rental rate. You live for free while holding all your money until you get a better job. You also have the cash in hand while you can shop short sales and foreclosures and new houses coming to market at a lower price point so you can buy with cash. Walking into a distressed sale with a cash deal and quick close with allow you a good negotiating tool for a better deal.
As others have said, it appears you are putting your image before reasoning.
If you sell the house and cars and put the $1 mil cash or whatever equity you have into a fixed rate investment, I am sure you could easily cover a monthly rent and your utilities on a decent apartment as well as a storage unit for the excess furniture. You could even offer 6-12 months cash up front for a reduced rental rate. You live for free while holding all your money until you get a better job. You also have the cash in hand while you can shop short sales and foreclosures and new houses coming to market at a lower price point so you can buy with cash. Walking into a distressed sale with a cash deal and quick close with allow you a good negotiating tool for a better deal.
#154
Rennlist Member
I agree that the market will likely be choppy until there is clear and substantive economic activity. Real estate is a tougher one due to regional market dynamics but on a national level, it would seem prices will remain, at best, flat for some time.
From this perspective and given the CF constraints, it makes sense to liquidate burdensome real estate assets and invest the proceeds wisely while the CF situation gets sorted. Smart people make money when markets are choppy, not just when they go up. Once the CF situation is improved and stable and there is a better understanding of the RE landscape, then it might make sense to buy again.
Then again, this is a personal matter and you have to take the individual into account. Some people still view their home as the safest place to park their nest egg. That, coupled with the fact that, in Steve's scenario, a refi would result in monthly outflows comparable to that of renting a small apartment makes a case for keeping the house. Not one I would likely take though.
From this perspective and given the CF constraints, it makes sense to liquidate burdensome real estate assets and invest the proceeds wisely while the CF situation gets sorted. Smart people make money when markets are choppy, not just when they go up. Once the CF situation is improved and stable and there is a better understanding of the RE landscape, then it might make sense to buy again.
Then again, this is a personal matter and you have to take the individual into account. Some people still view their home as the safest place to park their nest egg. That, coupled with the fact that, in Steve's scenario, a refi would result in monthly outflows comparable to that of renting a small apartment makes a case for keeping the house. Not one I would likely take though.
#155
Rennlist Member
Smart people make money when markets are choppy, not just when they go up.
With a refinanced loan, his nut will be manageable, even if he never gats a better job. If you look at his investment allocations, he has roughy $700k in RE, 300k in his 401 (not sure how it is invested), and 80k in money market. If he was to take the $700k out, where would you put it? A year and a half ago, even money market funds were iffy.
#156
Rennlist Member
Thread Starter
I am finally saying "uncle". We're definitely not downsizing and selling this house. Our daughter is still in school in this area and we're not moving, period. We don't need to right now. Plus, someone is renting out part of our home (the apt above the garage) so our cash flow is much better. Our $2133 mortgage payment went to $1333 a month for an almost million dollar house. That's a good thing. You can't get a 1 BR apt in Bethesda MD for $1333 month. There's just no reason to sell this house.
As others have said, it appears you are putting your image before reasoning.
If you sell the house and cars and put the $1 mil cash or whatever equity you have into a fixed rate investment, I am sure you could easily cover a monthly rent and your utilities on a decent apartment as well as a storage unit for the excess furniture. You could even offer 6-12 months cash up front for a reduced rental rate. You live for free while holding all your money until you get a better job. You also have the cash in hand while you can shop short sales and foreclosures and new houses coming to market at a lower price point so you can buy with cash. Walking into a distressed sale with a cash deal and quick close with allow you a good negotiating tool for a better deal.
As others have said, it appears you are putting your image before reasoning.
If you sell the house and cars and put the $1 mil cash or whatever equity you have into a fixed rate investment, I am sure you could easily cover a monthly rent and your utilities on a decent apartment as well as a storage unit for the excess furniture. You could even offer 6-12 months cash up front for a reduced rental rate. You live for free while holding all your money until you get a better job. You also have the cash in hand while you can shop short sales and foreclosures and new houses coming to market at a lower price point so you can buy with cash. Walking into a distressed sale with a cash deal and quick close with allow you a good negotiating tool for a better deal.
I don't feel comfortable telling you the complete response and discussion I had with my smart wife this morning. I printed out a ton of responses from here, edited some of them a bit (the ones that were really biting and felt cruel to me), and we talked about them as she read them.
In the end, she thought it was ridiculous for me to sell my 2 watches. One was a 5 year anniversary gift from her and the other I saved up years to get. They're off the table, for now. It's not like I'm sitting on $20k worth of watches here...
We're not selling our home. We at least will stay here for 2 more years till her daughter goes to school. She lives walking distance away with her daddy during the week. Jeez, it's $1333 a month plus utilities of $391 mo. That doesn't necessitate changing anything for. A 2 BR apt is over $1500 in this area. Do you know how much it costs to live around DC? We could refi, as well. I doubt we will but we could. That would bring it down even more. Waiting to hear back from our mortgage guy. I'm open to it but not thrilled about rolling more money into this small mortage that's left and lengthening the term an extra 19 years. I know we could try to pay it off earlier if times get better but that may drag on. Sounds ludicrous to me and some of my friends agree. Just because you think it's best for us - you don't really know us or our total situation. Not trying to sound like an ***, it is what it is.
Told her what I could get for my 2 cars (her's is fine, reliable, paid off, has an 8 yr warranty bumper to bumper on it). Probably about $37k for both of mine on the low end.
She made a deal with me this morning - Take and pass the real estate class I was thinking of doing, get my license, work it part time with my barely full time job - weekends and evenings, and I can keep the cars, for now, for a while at least, until one of them needs a MAJOR repair - ie: trans, engine, $5k problem, etc.
So, throw eggs on our situation if you must. Laugh at us. Make fun. We may change our mind next month and do what you all said, but for now we're sitting tight and waiting this out a bit. If we can change our expenses by really pouring over our budget, cutting the fat wherever we can, then we'll be OK for a while. If we go through the $37k that's left in our checking account in the next 6 months or year, THEN I've agreed to sell the 993, a watch if I have to, etc. Maybe even the BMW.
Buying a 2 year old Honda Accord for $17k or so is about the same as keeping my $8-$9k BMW. The BMW will need about $2k-$3k or maybe a lot less in repair each year. That's the difference in price between selling the BMW and getting the newer Honda. No, I'm not driving a 5 year old Honda Accord with the older body style, because... I don't have to. Yet.
That's it! Call us stupid, but in the end, if you met us, saw our neighborhood, knew how hard we worked to get here, and met our friends we've made here, you might think differently. You don't walk in our shoes.
I don't plan on driving the 993 much. Just enough to enjoy it on the weekends and during the week now and then. When things pick up for us (workwise), THEN I'll drive it more, and I might even still have it.
As to why she can't be a dental hygienist after doing it for 22 years anymore, that's personal. She does plenty well working for her parents and they really need her.
Peace out...
#157
Addict
Rennlist Member
Rennlist Member
If you ask for advice, don't get upset when you don't care for every bit you receive. You ask the same questions over and over every few months and you always get the same answers.
You are worth about $1,100,000 and in order to keep your cars (valued at about 3% of your net worth), you have to accept her terms to get a second job and work nights and weekends in addition to the 40 hours you work now?
Why bother even asking for advice?
I am not laughing at you or intending to insult you....I have been in your shoes and life is a lot better when you stand up for yourself.
You are worth about $1,100,000 and in order to keep your cars (valued at about 3% of your net worth), you have to accept her terms to get a second job and work nights and weekends in addition to the 40 hours you work now?
Why bother even asking for advice?
I am not laughing at you or intending to insult you....I have been in your shoes and life is a lot better when you stand up for yourself.
#158
Rennlist Member
Smart people also don't buy high and sell low. He has already seen what happens when panic sets in selling his equity investments a year ago. Happy Dow Low Day BTW :-)
With a refinanced loan, his nut will be manageable, even if he never gats a better job. If you look at his investment allocations, he has roughy $700k in RE, 300k in his 401 (not sure how it is invested), and 80k in money market. If he was to take the $700k out, where would you put it? A year and a half ago, even money market funds were iffy.
With a refinanced loan, his nut will be manageable, even if he never gats a better job. If you look at his investment allocations, he has roughy $700k in RE, 300k in his 401 (not sure how it is invested), and 80k in money market. If he was to take the $700k out, where would you put it? A year and a half ago, even money market funds were iffy.
As for allocation, it's irrelevant to discuss as I think people should invest in a) something they understand or b) what their advisor with a long track record of success would suggest. I'm not one. Bottom line, these are changing times and there is money to be made out there...but I wouldn't bet on RE. As per my previous post, I do understand your point though.
#159
It's interesting to see everyone's views here because there is such a large cross section of ages/backgrounds, and one's advice is obviously influenced by these.
I may be a bit on the more conservative side, and for me getting out of the house would be my top priority. From what I recall he bought the house nearly 2 years ago, so its not like it was purchased at the peak of the market. Also, the MD/DC real estate market is actually quite robust at the moment, and anything he moves into has likely had a correction of some sort. While sitting on the money and riding things out may seem prudent, I would hate to have to be at the mercy of landlords and live in someone else's place. If he could downsize to a more practical house his taxes and utilities would be lower, less house to maintain etc. At nearly 50 it would seem realistic that a downsize would be in the near future anyways. With the proceeds from the sale of the mansion, he could either pay cash for a reasonable house, or take out a small mortgage since money is so cheap. Plus the remaining funds can be put towards retirement through IRAs etc. Since he has reduced his monthly expenditures there may not have to be as many sacrifices made in lifestyle; he could keep the 993 if he had a more practical DD. Additionally if he is able to have positive cashflow with this adjustment, then any improvement in salary will allow for further savings and indulgences.
I came from very modest beginnings and lead a somewhat conservative existence. I will admit that I may have acquired a few too many possessions, but I try to balance it out in other areas. I cut out simple things like a home phone, cable, and I live in a 1300 Sq ft house. I really don't take any lavish vacations, my porsches and guitars are my main indulgence.
Steve, you have to do whatever makes you happy, but I would try to pull everything back until you can live on what you make today, and are able to think about preparing for tomorrow.
I may be a bit on the more conservative side, and for me getting out of the house would be my top priority. From what I recall he bought the house nearly 2 years ago, so its not like it was purchased at the peak of the market. Also, the MD/DC real estate market is actually quite robust at the moment, and anything he moves into has likely had a correction of some sort. While sitting on the money and riding things out may seem prudent, I would hate to have to be at the mercy of landlords and live in someone else's place. If he could downsize to a more practical house his taxes and utilities would be lower, less house to maintain etc. At nearly 50 it would seem realistic that a downsize would be in the near future anyways. With the proceeds from the sale of the mansion, he could either pay cash for a reasonable house, or take out a small mortgage since money is so cheap. Plus the remaining funds can be put towards retirement through IRAs etc. Since he has reduced his monthly expenditures there may not have to be as many sacrifices made in lifestyle; he could keep the 993 if he had a more practical DD. Additionally if he is able to have positive cashflow with this adjustment, then any improvement in salary will allow for further savings and indulgences.
I came from very modest beginnings and lead a somewhat conservative existence. I will admit that I may have acquired a few too many possessions, but I try to balance it out in other areas. I cut out simple things like a home phone, cable, and I live in a 1300 Sq ft house. I really don't take any lavish vacations, my porsches and guitars are my main indulgence.
Steve, you have to do whatever makes you happy, but I would try to pull everything back until you can live on what you make today, and are able to think about preparing for tomorrow.
#160
Something tells me that your non-working wife telling you to get a second job to keep your cars will go over about as well as when you FIL told you that you had to sell your 993. You have to be about the most honest guy on the internet though.
She made a deal with me this morning - Take and pass the real estate class I was thinking of doing, get my license, work it part time with my barely full time job - weekends and evenings, and I can keep the cars, for now, for a while at least, until one of them needs a MAJOR repair - ie: trans, engine, $5k problem, etc.
#161
It's the long responses that make this thread hilarious - all the time and effort. Were any of you expecting to be heard?
Besides my recipe is the easiest:
mix the next "on deck" cash cow relative with two parts alcohol, a light loosening of a banister rail, a splash of wax on the stairs and let nature take its course. More skiing for the wife, no second job for you and maybe a 993 turbo and a couple more watches.
Besides my recipe is the easiest:
mix the next "on deck" cash cow relative with two parts alcohol, a light loosening of a banister rail, a splash of wax on the stairs and let nature take its course. More skiing for the wife, no second job for you and maybe a 993 turbo and a couple more watches.
#165
Rennlist Member
Image trumps common-sense!
Big house, sports car, three cars, designer watches, tony neighborhood, grand piano, wife's skiing trips, 2 king-size beds, custom appliances, designer cats, etc., etc.
What the hell, if you've got it, spend it.
Big house, sports car, three cars, designer watches, tony neighborhood, grand piano, wife's skiing trips, 2 king-size beds, custom appliances, designer cats, etc., etc.
What the hell, if you've got it, spend it.