Backstage With the Band

[TIMKEYS]

Originally Posted by guido61

Yeah, I don't know if we'll get to that point anytime soon. Kid isn't even 5 yet and I'm in the process of buying a new house. We're gonna be tied down for quite a few more years, I'm afraid

But that's a choice I made early on in life. I specifically chose to do the rock band thing, not get married, not have kids, not settle down until I nearly 40 because I wanted to get all that stuff out of system when I was younger as much as possible. I knew I'd basically be trading those 20 years for another 20 years down the road, but I'm cool with that. I see some of my friends whose kids are now out of the house and think that looks nice, but then I think back on them being tied down to the job and the house when they were 25 while I was out having the time of my life and I know they missed out on much more than I will in the future.

50 is the new 40, right? As long as the health holds out, I can still do the retirement cruises and early bird specials when I'm in my 70s.

The problem you have is the inflation that we will see in the future. Things will cost more and the rate of rising prices may not keep up with wages, expecially when your biz depends on people re financing things and home sales. Most guys your age are pretty well on their way to having a retirment funded and a home paid off and the kids through college. Good luck you are gonna need it.

[guido61]

Originally Posted by TIMKEYS

The problem you have is the inflation that we will see in the future. Things will cost more and the rate of rising prices may not keep up with wages, expecially when your biz depends on people re financing things and home sales. Most guys your age are pretty well on their way to having a retirment funded and a home paid off and the kids through college. Good luck you are gonna need it.

Well, we all need a bit of good luck, but personally, I'm relying a bit more on being smart and careful. But what makes you think you know anything about my financial situation compared to "most guys my age"? I have all sorts of friends and relatives who got wiped out during the financial crisis. We stayed low and kept our head above water. Didn't play the "cash out" game and buy too much house in the 00s like everyone else did.

I've got one house paid for that I rent out, and now that the market is turning around and values are on the upswing, it's a good time to buy. We're outgrowing the present house a bit and want to be closer to the school we'd like to send the kid to, so we're buying a new home and I'll convert the present one to another rental and will have that one paid off in a few years. Plus I've already pre-paid for 4 years college tuition for the kid and we've got a decent sum set aside in investments for retirement. Plus the 3 houses should provide a nice bit of equity down the road when they are all paid off.

Will things keep up with inflation? Who knows. But it isn't like anyone just invented inflation. People survived the ridiculous inflation of the 70s and 80s and most managed to retire ok. I'll think we'll be fine. Slow and steady wins the race. But all anyone can do is just play the game as best we can and hope for the best.

[TIMKEYS]

Originally Posted by guido61

Well, we all need a bit of good luck, but personally, I'm relying a bit more on being smart and careful. But what makes you think you know anything about my financial situation compared to "most guys my age"? I have all sorts of friends and relatives who got wiped out during the financial crisis. We stayed low and kept our head above water. Didn't play the "cash out" game and buy too much house in the 00s like everyone else did.

I've got one house paid for that I rent out, and now that the market is turning around and values are on the upswing, it's a good time to buy. We're outgrowing the present house a bit and want to be closer to the school we'd like to send the kid to, so we're buying a new home and I'll convert the present one to another rental and will have that one paid off in a few years. Plus I've already pre-paid for 4 years college tuition for the kid and we've got a decent sum set aside in investments for retirement. Plus the 3 houses should provide a nice bit of equity down the road when they are all paid off.

Will things keep up with inflation? Who knows. But it isn't like anyone just invented inflation. People survived the ridiculous inflation of the 70s and 80s and most managed to retire ok. I'll think we'll be fine. Slow and steady wins the race. But all anyone can do is just play the game as best we can and hope for the best.

True ,, thank god I navigated the carter years in my twenties.... 300 dollar cars, 100 dollar rent and no debt. Down here now people cant rent their property for enough money to even make expenses even when the places are paid for. Taxes and insurance just keep going up. We are in a very tough time. Interest rates are being held down by artifical means and risk and prices just keep going up unless you are stupid enough to buy into the fact that there is no inflation and wont be any.

[guido61]

Originally Posted by TIMKEYS

True ,, thank god I navigated the carter years in my twenties.... 300 dollar cars, 100 dollar rent and no debt. Down here now people cant rent their property for enough money to even make expenses even when the places are paid for. Taxes and insurance just keep going up. We are in a very tough time. Interest rates are being held down by artifical means and risk and prices just keep going up unless you are stupid enough to buy into the fact that there is no inflation and wont be any.

I don't think anybody can predict the future regarding inflation or to what degree wages or real estate will or won't be able to keep up with it. But what IS true is that money has never been cheaper. And real estate isn't going to get any cheaper. And while I know places like Texas didn't see the boom and bust that some other places did, the fact is I can show you houses around Nevada that were going for $300,000 at the peak of the market that you could have snatched up for $50K a few months ago. Which is what a lot of people have been doing and the market is headed back up. Stuff isn't likely to go back up to 2008 levels anytime soon, but I fully expect it to hit its "real" value of somewhere between the two extremes in the not-too-distant future. And borrowing as much money as you can now at ridiculously low rates and paying it back later with inflated dollars? You'd have to be a fool to not do that if you can.

Most of us over a certain age can remember stories about how Grandma and Grandpa bought their house after the Depression and thirty years later were still making payments of $38 a month or whatever. We're going through that sort of cycle again. Those $1200 a month mortgage payments a lot of people are making may seem like a joke 30 years from now. Inflation is just some zeros on the end of a figure to a certain degree. The key is making it work in your favor, not the other way around.

[TIMKEYS]

Originally Posted by guido61

I don't think anybody can predict the future regarding inflation or to what degree wages or real estate will or won't be able to keep up with it. But what IS true is that money has never been cheaper. And real estate isn't going to get any cheaper. And while I know places like Texas didn't see the boom and bust that some other places did, the fact is I can show you houses around Nevada that were going for $300,000 at the peak of the market that you could have snatched up for $50K a few months ago. Which is what a lot of people have been doing and the market is headed back up. Stuff is likely to go back up to 2008 levels anytime soon, but I fully expect it to hit its "real" value of somewhere between the two extremes in the not-too-distant future. And borrowing as much money as you can now at ridiculously low rates and paying it back later with inflated dollars? You'd have to be a fool to not do that if you can.
Most of us over a certain age can remember stories about how Grandma and Grandpa bought their house after the Depression and thirty years later were still making payments of $38 a month or whatever. We're going through that sort of cycle again. Those $1200 a month mortgage payments a lot of people are making may seem like a joke 30 years from now. Inflation is just some zeros on the end of a figure to a certain degree. The key is making it work in your favor, not the other way around.

Yes that is the way many people think it works. The problem with property is that you have taxes and the expenses of insurance and keeping the house plugged in. Its pretty easy to buy a house in down times at low interest rates and end up with way more house than you can really afford in the future. Its tricky. Its like the guy who goes out and gets a great bargin on a twin engine airplane , then discovers he is really maintaining a million dollar plane, beause his parts and labor are at new airplane prices. The secret is not to over buy or over borrow, because energy is not going down, and either is insurance and maintence and materials to keep it up. When you buy it ,, you have to feed it or lose it. I dont see wages going up at the same rate as inflation because our goverment is doing things that is textbook for a major depression. When the state gets tight for money ,, they raise taxes. Goverment never suffers , they have the people to inflict the pain upon.

[guido61]

Originally Posted by TIMKEYS

Yes that is the way many people think it works. The problem with property is that you have taxes and the expenses of insurance and keeping the house plugged in. Its pretty easy to buy a house in down times at low interest rates and end up with way more house than you can really afford in the future. Its tricky.

Well, ya you gotta be smart about it. The problem people got into with the "way more house" thing before was betting on the equity going up enough that they could refi before the payments went up on their ARMs. Dumb. Again, slow and steady wins the race. Get a fixed rate mortgage with a payment that fits your budget. Don't gamble on certain things needing to take place in the future or else you screwed. But you're the one predicting crazy inflation in the future. Well, that's gonna mean interest rates going up to 10, 15, 20% if you're right. Time to lock in those 3% rates now.

When the state gets tight for money ,, they raise taxes. Goverment never suffers , they have the people to inflict the pain upon.

If either your financial future or your peace of mind is dependant upon being afraid about how much property tax rates might go up, then you probably shouldn't be in the real estate game. Stick to renting, if that's the case.

[TIMKEYS]

Originally Posted by guido61

Well, ya you gotta be smart about it. The problem people got into with the "way more house" thing before was betting on the equity going up enough that they could refi before the payments went up on their ARMs. Dumb. Again, slow and steady wins the race. Get a fixed rate mortgage with a payment that fits your budget. Don't gamble on certain things needing to take place in the future or else you screwed. But you're the one predicting crazy inflation in the future. Well, that's gonna mean interest rates going up to 10, 15, 20% if you're right. Time to lock in those 3% rates now.




If either your financial future or your peace of mind is dependant upon being afraid about how much property tax rates might go up, then you probably shouldn't be in the real estate game. Stick to renting, if that's the case.

The problem with this economy is that interest rates should be much higher than they are. One of the only reasons why they are not higher is because the fed is playing santa to on obama federal debt. If the rate goes up ,, the USA goes down the tube. We are going to go through a major depression when the the debt sled stops sliding. I see taxes becomming a major issue. I agree with you ,, lockin in now is a good move , but you really have to be very conservative on what you do. I have weathered a lot of storms in the market and during hard times. This one is by far the most troubling. As for risk ,, I know when to take it and when to lay low. For now its keep the sailed reefed down on risk and steer a steady course. How you handle risk all depends on how much you have to loses. Nothing to lose ,, go for it. You aint that far from broke swinging for the fences.

[guido61]

Originally Posted by TIMKEYS

The problem with this economy is that interest rates should be much higher than they are.

Exactly. That's why the people who are going to make money down the road are the ones who take advantage of the low rates today.

One of the only reasons why they are not higher is because the fed is playing santa to on obama federal debt.

You're suffering from old-man-government-paranoia disease, Tim. You've turned into the old man you probably used to laugh at when you were younger. The people who have made money throughout history are the ones who are smart enough to know it doesn't really matter which party is in office. They make money regardless. At the top of the pyramid, they are the ones who OWN the fucking government.

On the other end of the scale you have those old guys living in trailers listen to the radio all day long who think everything that happens in their life is dependant upon the next election. You can either play the game or get played BY it. The choice is yours. Have fun.

[TIMKEYS]

Originally Posted by guido61

Exactly. That's why the people who are going to make money down the road are the ones who take advantage of the low rates today.



You're suffering from old-man-government-paranoia disease, Tim. You've turned into the old man you probably used to laugh at when you were younger. The people who have made money throughout history are the ones who are smart enough to know it doesn't really matter which party is in office. They make money regardless. At the top of the pyramid, they are the ones who OWN the fucking government.

On the other end of the scale you have those old guys living in trailers listen to the radio all day long who think everything that happens in their life is dependant upon the next election. You can either play the game or get played BY it. The choice is yours. Have fun.

I understand where we are as a nation. I prolly have way more chips in the game than you do at your point in life. This is a pretty difficult time to be an investor living off what you can turn in the market. Lots of risk and not much in the way of return. I wish it was as simple as buying a couple houses, but you will find that its not. How much do you think you will need to retire on your own dime as a self employed business guy?

[guido61]

Originally Posted by TIMKEYS

I understand where we are as a nation.

Actually, I don't think you do. I think you've probably bought into a lot of bullshit by good media salesmen and carnival barkers along the way though.

This is a pretty difficult time to be an investor living off what you can turn in the market. Lots of risk and not much in the way of return.

Really? What markets have you been investing in? The stock market has doubled in the last 4 years. I've had a VERY nice run lately. Sorry if you haven't done as well. Maybe a little less partisan BS might work in your favor?

I wish it was as simple as buying a couple houses, but you will find that its not. How much do you think you will need to retire on your own dime as a self employed business guy?

The goal is to retire at 65 or so with a paid-off house to live in and $1-2M in other assets. We're on a pretty good path to hit that goal. If we don't or that's not enough? Then that will be what it will be I guess.

[OldGuitarPlayer]

I have never been a fan of popular music. The concept of "aging out" is foreign to me. Even when I was young I always listened to and played older traditional acoustic folk, blues, or alternative music. You don't have to look hard to find many good players/singers of this genre of music. The city I live in has always been pegged as "boring" however that is only by those who do not live here. I can go out any night of the week and find an enjoyable live performance at any number of coffee houses or small pub like venues. Not to mention any of the open mic's, informal Irish music sessions or bluegrass jams that are available to those interested in such.

Good live music is ageless.

[TIMKEYS]

Originally Posted by guido61

Actually, I don't think you do. I think you've probably bought into a lot of bullshit by good media salesmen and carnival barkers along the way though.



Really? What markets have you been investing in? The stock market has doubled in the last 4 years. I've had a VERY nice run lately. Sorry if you haven't done as well. Maybe a little less partisan BS might work in your favor?


The goal is to retire at 65 or so with a paid-off house to live in and $1-2M in other assets. We're on a pretty good path to hit that goal. If we don't or that's not enough? Then that will be what it will be I guess.

Yea they did double , but they doubled from 6000 dow that was at 14000. This last 4 year run basically just got people back close to even after the big dump. In 15 years one to two million might be a little slim. Its a little slim now, with interest rates so low. The risk vs reward ratio just keeps getting tighter. Our federal goverment is decreasing the value of the dollar at a very rapid pace. You destroy the dollar and you destroy this country. This adm and fed chairman are destroying the dollar and the future of our nation.

[guido61]

Originally Posted by TIMKEYS

Yea they did double , but they doubled from 6000 dow that was at 14000. This last 4 year run basically just got people back close to even after the big dump.

Exactly. You have to know when to hold 'em, know when to fold 'em. If people were dumb enough to stay with the market during the crash, I don't know what to tell them. It's not like it dumped for 14,000 to 6,000 overnight.

In 15 years one to two million might be a little slim. Its a little slim now, with interest rates so low. The risk vs reward ratio just keeps getting tighter. Our federal goverment is decreasing the value of the dollar at a very rapid pace. You destroy the dollar and you destroy this country. This adm and fed chairman are destroying the dollar and the future of our nation.

Again, same stuff I've heard for decades. Nothing that people weren't saying in the 70s and very few people didn't come out of all that just fine and even way ahead by the 90s. The key to dealing with inflation is keeping your money in assets that keep up.

[TIMKEYS]

Originally Posted by guido61

Exactly. You have to know when to hold 'em, know when to fold 'em. If people were dumb enough to stay with the market during the crash, I don't know what to tell them. It's not like it dumped for 14,000 to 6,000 overnight.



Again, same stuff I've heard for decades. Nothing that people weren't saying in the 70s and very few people didn't come out of all that just fine and even way ahead by the 90s. The key to dealing with inflation is keeping your money in assets that keep up.

The problem with the know when to hold them and know when to fold em theory is that typically most major gains in the market are made on just a few day during the year. You do have to be in to get those gains. I have a pretty decent trackrecord at this investment thing and not what you call a new retireee. You havent. Yes you do have to keep your investments in things that keep up , but you also have to move with caution on things that have expenses associated with it that you cant control. In a cash short society like we have , odds are that rent you can charge will be controlled more by what people can pay , rather than what you bought the thing for, or by what you think the rent should be. Renters are typically people who cant afford to buy, unless you go short term rentals. I tend to see a glut of rental property hitting the market. I dont see the expenses to keep it plugged in getting less. I can rent properties down here for much less than it costs the owners who have them paid for to keep. Most rent at a loss. WHile you are working , the depreciation is nice. After you retire , not so much so.

[race81]

Originally Posted by guido61

Exactly. You have to know when to hold 'em, know when to fold 'em. If people were dumb enough to stay with the market during the crash, I don't know what to tell them. It's not like it dumped for 14,000 to 6,000 overnight.

Some of us who lost thousands....had no choice but to leave money there. Most employer run 401's will not let you remove your money when you expect the market to go down the tubes. I lost nearly 10g when the market dumped a few years back, and just now is it back up to where it was then................I dont contribute to anything I dont have control over anymore.

Aging out.............funny reading the replies to this. For many years I played in a country music opry setting. Made very good money doing so for nearly 15 years. Somewhere near the last three years the crowds started to dwindle. Thought we were doing something wrong, but then come to realize our audience was dying off.....sad..but true story.

[TIMKEYS]

Originally Posted by race81

Some of us who lost thousands....had no choice but to leave money there. Most employer run 401's will not let you remove your money when you expect the market to go down the tubes. I lost nearly 10g when the market dumped a few years back, and just now is it back up to where it was then................I dont contribute to anything I dont have control over anymore.

Aging out.............funny reading the replies to this. For many years I played in a country music opry setting. Made very good money doing so for nearly 15 years. Somewhere near the last three years the crowds started to dwindle. Thought we were doing something wrong, but then come to realize our audience was dying off.....sad..but true story.

I would think that your 401k would have some sort of money market option to transfer funds into , or at least a place with less risk. In the winter we play for an older crowd. What I am seeing is that we are getting fewer who come down early, they are doing house parties more and saving money by staying out of the bars. They havent slowed down on the drinking but they do seem to be watching their dollars. We are an americana texas band that does a lot of texas songwriter stuff, older classic rock and original stuff. our crowd is alive and well , but they are getting snug with the buck. It should be interesting to see how jan goes. I hope to see things pick up as they face up to the fact that its cold and snowin up north. FEB is peak winter texas season. If they are not here by the first week in jan odds are they aint commmin.

[guido61]

Originally Posted by race81

Some of us who lost thousands....had no choice but to leave money there. Most employer run 401's will not let you remove your money when you expect the market to go down the tubes. I lost nearly 10g when the market dumped a few years back, and just now is it back up to where it was then................I dont contribute to anything I dont have control over anymore.

Originally Posted by TIMKEYS

I would think that your 401k would have some sort of money market option to transfer funds into , or at least a place with less risk.

Tim's right. While you can't just pull your money out of the 401K without penalty, you have the option to move it into different funds. When the market started to tank, I pulled all the money of out of my wife's 401K that we had in stocks and put them into much safer money market and bond funds. When it started going up again, I moved a lot of back to stocks. Tech stocks had a pretty good year.

It really pays to learn a bit about the markets and watch your money. You can't just put all of your 401K into whatever and hope things go well. You have to be proactive.

[TIMKEYS]

Originally Posted by guido61

Tim's right. While you can't just pull your money out of the 401K without penalty, you have the option to move it into different funds. When the market started to tank, I pulled all the money of out of my wife's 401K that we had in stocks and put them into much safer money market and bond funds. When it started going up again, I moved a lot of back to stocks. Tech stocks had a pretty good year.

It really pays to learn a bit about the markets and watch your money. You can't just put all of your 401K into whatever and hope things go well. You have to be proactive.

The problem with the 2008 melt down was that it effected good solid non risky stocks. It was an across the board melt down. I took a 22 percent hit on that one. while its easy to go into the typical 401k and move things ,, its pretty hard to take a portfolio that has built up over a lifetime of investments and make any quick adjustments. I got out of the stuff that had exposure to the morgage meltdown prior to the shit hitting the fan. I got nailed on the solid stuff that people dumped out of panic selling. When you are retired you tend to have to live by the sword and die by the sword. You pretty well have to have enough chips in the game to pay the bills. Now I just keep a large cash holding to ride out a big sell of , so i dont have to sell at low prices to pay bills. I am giving up income to have a better long term options. I have cut down my living expenses and am down to one house and can get by on less income. Now the big question going foward is how long to sit on the bond funds. For sure I have one foot in the exit door. For sure how you approach investments changes when you dont have a paycheck rolling in. I think its somthing you cant wrap your hands round till you actually do it.

[guido61]

Originally Posted by TIMKEYS

The problem with the 2008 melt down was that it effected good solid non risky stocks. It was an across the board melt down. I took a 22 percent hit on that one. while its easy to go into the typical 401k and move things ,, its pretty hard to take a portfolio that has built up over a lifetime of investments and make any quick adjustments. I got out of the stuff that had exposure to the morgage meltdown prior to the shit hitting the fan. I got nailed on the solid stuff that people dumped out of panic selling.

It was a bad time because both stocks and real estate got hit hard. Historically, one has usually been a bit of a safe haven for the other. Part of the reason for the real estate boom was because that's where a lot of money went after the tech-bubble burst in the early 00s. In '08, there weren't too many places to go. T-bills and cash were, at least, places where you wouldn't get hit too hard. If you only took a 22% hit, you did pretty well. I took closer to 30%, but was able to get it all back and then some pretty quickly when the market started to go back up again.

Gold did well, but gold doesn't come without its own set of risks as well.

Where the future will take us, who knows? I know I've about 20 more years to build up the nest egg and then the goal is to have enough capital working for me that I can live modestly off the investments themselves. The bottom line is to not be too greedy and live modestly. The wife and I combined make a pretty good income. We don't live in a mansion. We drive older, paid-for cars. We don't take expensive vacations every year. The people who got hit the hardest were the ones who extended themselves beyond what made sense for reasons largely due to ego and greed. Hopefully people learned from that. Only do what makes sense.

When we bought out first house in 2003 we found out that we were "pre-approved" for a $500,000 loan. We laughed realizing that to buy such a house would mean putting pretty much every cent we made into the mortgage payment every month. Or do some silly ARM or interest-only loan. Instead we bought a house with monthly payments we knew we could afford even if one of us lost their job. They were giving out loans to everybody in those days. And a lot of people got eyes bigger than their wallets and couldn't resist the temptation to live in that $500K house.

Same thing with the new one we are buying. We're upgrading a bit because we've outgrown the house we're in and we want to live in a different area, but it's nowhere near the house I'd LOVE to come home to every night that the bank---even in these much-more-strict times---would be happy to approve us for. But you gotta be realistic with your life and think about the long term and what's really important to you. Making sure we've got a decent retirement plan and that the kid has her schooling at least somewhat covered is important. Marble countertops? Not so much.

[Potts]

Originally Posted by TIMKEYS

This adm and fed chairman are destroying the dollar and the future of our nation.

LOL...Put the pipe down.

This president will go down as one of the most influential and incredible leaders we've had in modern America. There has been more positive social change in this country than anytime in the recent past. "Destroying the dollar and the future of our nation" that's just silly. I think you're confusing him with the last guy.