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Instead of listening to all the realtor clap-trap about what stuff is supposedly selling for, people in Colorado simply can go down to the local County Clerk & Recorders office and look at the recordings of deeds. Those are actual sales, and the sales prices are public record. On deeds that say "$10 and other good and valuable considerations" one only need look at the documentary fee charged. It is $0.10 for every $1,000 of sales price (so, a property selling for $295,000 would show a $29.50 documentary fee on the deed). Lying about the sales price to the Clerk & Recorder at the time of recording is a crime in Colorado, so the "doc fee" is usually accurate. Most Colorado Assessor's offices also have records available on-line--with sales prices available. It's real interesting to hear the "party line" from the realtors, and then go look at the actual recorded information on sales. Thank God, Colorado is a public disclosure state.
While this article is not exactly good news across the board, it does contain a smalll nugget of gold.
NEW YORK (CNNMoney.com) -- In a sign that Americans' spending habits are shifting, household debt fell for the first time ever, based on data going back to 1952.
Bob and Jazzlover should read this article, they'd love it. I'm not sure I agree entirely with all of these predictions, but certainly there's reason to think some of these things could happen. If they prove to be true, whoa boy... grab your guns and hunker down. Here's the link:
There was a MotleyFool article about what Warren Buffet is doing... apparently he's buying stocks now and so should we.
Buffett bought a LOT of railroad stock the other year. The rails fit his investing model very well, i.e., not much competition if any, very high costs for any new firms to enter the biz, simple business to understand. He bought NS, UPRR and BNSF. He didn't bother with CSX, the debt-laden eastern RR that started a bidding war for Conrail ten years ago and ended up going head over heels in debt for the second-rate assets of Conrail (the old NYC lines). Since then, CSX had to sell off Sea-Land Services, Over-Nite Trucking, American Barge Lines and other assets to pay down debt.
Recently, Buffett put $5B into GE stock, but he did a deal with GE where he got PREFERRED stock, which he insisted pays him an annual dividend of 10% a year. That has to be one of the best deals an investor ever got. Every year now GE has to set aside a half-billion dollars of profits just to pay Buffett his dividends, that's quite a nut to pay each year.
Buffett recently bought some utility stocks. Same as the RR story above, no real competition, high entry costs for new firms, assured profitability via rates approved by the public utility commissions, etc.
This is the time to buy stocks, when blood is in the streets and amateurs have sold off their holdings in a panic - at huge losses.
dollar cost averaging could pay off with good buys now....with the exception of a few stocks, all my money is in a diversified portfolio of mutual funds....so my faith lies in those funds' management teams making all the right moves....a leap of faith I have to accept right now.
I woke up in a panic this morning, worried about how my husband will be able to retire. We've been saving at least 15% (we're now up to about 35%) of our income since he began working professionally almost 20 years ago, and we have absolutely no debt, not even a mortgage. Nonetheless, our portfolio has plummeted nearly 40%, and right now I don't know that we can set aside enough to live comfortably at retirement age, even if we invest aggressively for the next 20 years. My husband doesn't have a pension; we're on our own. He and I always thought we were doing things right, but obviously that's not the case.
I guess my point is: if we think we're in a bad position, how in the world do people with huge debt think they're going to survive once their working years end?
FormerCal: You'll be fine. The market always comes back, may take a while, may take a few years even, but it will be back. If you're still holding onto your stocks at this point, by all means keep them, don't sell at the market bottom, that's the surest way to actually lose money. We sold everything between last fall this early this year and have started buying back into the market in the recent months. Just keep doing what you're doing and it'll work out for you.
As for the millions living up to their eyeballs in debt, they're going to be working for a long long time.
I woke up in a panic this morning, worried about how my husband will be able to retire. We've been saving at least 15% (we're now up to about 35%) of our income since he began working professionally almost 20 years ago, and we have absolutely no debt, not even a mortgage. Nonetheless, our portfolio has plummeted nearly 40%, and right now I don't know that we can set aside enough to live comfortably at retirement age, even if we invest aggressively for the next 20 years. My husband doesn't have a pension; we're on our own. He and I always thought we were doing things right, but obviously that's not the case.
I guess my point is: if we think we're in a bad position, how in the world do people with huge debt think they're going to survive once their working years end?
You are actually in a pretty good position.
For starters not having debt is much of the battle. I know of three separate people in their 60's and 70's that decided they wanted to be real estate tycoons in their older age and now have to work their butt off to service a huge sum of debt. Obviously the property market is toast, so it's too late to sell now. They get rental income, but that never covers the mortgage, up keep, taxes, etc. Likely if all 3 of those people had not done all that with debt, they would have had a combined income of pension/401k/social security/inheritance/part time work and in their 60's and 70's and onwards they would have had a decent life. Now they have to work harder than ever to service that debt.
I think a broad mix of things is good. Having no debt is awesome, especially if you own a house. I think if you can retire completely at 65 and have a house and some other physical assets paid for, you are doing well.
I'm a firm believer in the Suze Orman principle of having a roof over your head with no debt. To me that gives me great comfort knowing I own a home than being in debt up the wazoo for a McMansion and some paper assets. I keep seeing people think they are rich, but they've got enormous amounts of debt. I've even seen on this forum people declare their wealth but then state they are in the bucket with rental properties with huge amounts of debt, yet they still feel rich. Fools.
While this article is not exactly good news across the board, it does contain a smalll nugget of gold.
NEW YORK (CNNMoney.com) -- In a sign that Americans' spending habits are shifting, household debt fell for the first time ever, based on data going back to 1952.
This was absolutely and typically incompetent MSM reporting. Household debt fell, all right...because when a house with a (first) purchase mortgage is foreclosed in a non-recourse state, the debt doesn't follow the borrower once he/she leaves the property behind. So record large numbers of people are having their houses taken away from them and leaving the taxpayers in The Land of Bailouts holding the bag. CNN says that equates to good news--there's been a decrease in household debt!! My, how wonderful. That's like the "good news" that you finally lost those extra 30 lbs...after eight rounds of friggin' chemotherapy.
How about the rather interesting emerging fact that over 50% of mortgages that are restructured are going almost immediately back into default??
30,000 layoffs coming from Boink of America announced today. Dollar down to 91 and change to the Yen. Negative yields on short term treasuries. Oh yeah, things are looking up!! Future's soooooooooooo bright!
Debt is a Drag
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