Bruddah IZ
DA
I've only exposed that you and I pay the bank to live in our homes and that neither you nor I net any monthly income from our domiciles. Six years of QE made you and a lot of other people rich by inflating your home value artificially.
The Inevitable New The Inevitable Trump Mocking Thread
- Thread starter Nonononono
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Bruddah IZ
DA
The 3rd grade math doesn't stop you. It should affirm your decisions to purchase an asset that produces monthly net income, which your domicile does not.
Bruddah IZ
DA
Good. I pay a mortgage like you do that does not produce monthly net income.
So the house that I bought in ‘87 and sold in ‘91 for about 60% greater (I told you about it already) was as a result of the last 6 years?
How about the house that I bought in ‘97 that doubled in value in 4 years. Was that the last 6 years of QE?
We have clearly had very different experiences with real estate purchases. But your conclusions are way skewed by your own bad experiences.
So again, despite all your arrogant talk about economics and finance, you appear to have failed at the easiest money-making adventure there is.
Maybe for you, a house isn’t an asset. That’s sad.
As I said, my income comes from my day job.
And based on our dialogue, if I need you to instruct me on how to buy real property, it would seem I would fail instead of succeed.
And as I have also said, more than 50% of my net worth is in real estate.
Do you know how to determine net worth?
You take all of your asset values and deduct all of your liabilities.
Bruddah IZ
DA
KISS. If people were buying a home asset and equity in that asset, they still would not be producing monthly Net Income. The fact that people were going underwater only underscores the fact that they had a liability to begin with since no one else was contracted to pay the mortgage but them. The note holders did not suffer because the Fed foamed the runway through QE bailouts. Where have you been, son?
Bruddah IZ
DA
Exactly. We simply have to answer the question of whether or not your alleged assets are drawing some net income for other then your lender/bank. Lol!
Bruddah IZ
DA
You're just wreaking of humility. Whether or not people could afford a loan doesn't change the fact that they, like you and I, were not and are not drawing any monthly Net Income from the homes we live in.
You were paying attention. The note holders got bailed out.
It wasn’t a “liability to begin with,” silly. Quite the contrary...it was like buying stock (an asset, correct?) high and betting it would keep going up. The stock could crash (as in right now)...it was still an asset. People loaned on the expectation that real estate “asset value” would keep increasing. It didn’t.
Right now, my stocks are still an asset, but losing value. And it’s true I don’t have specific liability, such as a margin loan, against these assets.
My real estate assets, on the other hand, against which I do have some “liabilities” (e.g., mortgages) are still maintaining their “asset value” much better than my stocks are.
So at this moment, real estate is a far more valuable asset than stock.
Bruddah IZ
DA
Mine. Doesn't matter. You nor I recieve monthly net income from the lender.
Why the obsession with income? Equity is what creates wealth, not income.
Bruddah IZ
DA
Basically, what I've been saying all along. No Net Income from your home mortgage.
Bruddah IZ
DA
Right, but you need income to buy 20% of your home equity so that you don't have to pay for the banks Mortgage insurance (PMI). But equity is only valuable if you generate income from it or a profit. If the latter than you no longer have a liability, but cash assets.
Backwards as usual. No other asset lets you take the full ride in increase when you only pay 20% to get in.
As I said, you get your income from your job.
Also, the house is not only an asset, but for tax purposes it’s called a “capital gains asset” (if you want to check on that, go to the federal tax code) so you pay far less in taxes on the sale than you would pay in income taxes from rental revenues. In my case, those profits are worth about 30% more than “income.”
Combined with the deductibility of my mortgage payments...can’t beat it.
Bruddah IZ
DA
Once you buy a stock, you are buying equity. You are saying to the company, go make money with my money and thus you have an asset when your stocks earn money allowing you to do whatever you want with those gains. If the company ever has to liquidate, lenders (Corporate bond holders) get paid first. Stock holders last, if at all. Banks lent money because they knew they were percieved as TBTF and thus were bailed out, helping you and I to maintain some equity in our homes and stocks. That's why they call stocks equities.
Bruddah IZ
DA
No other asset requires PMI either without a 20% downpayment. Although you can get insurance for stocks.
I pay $10 for stock that’s worth $10 and hope that the company does well and grows the value of my stock. If it goes up by 20% in 2 years, I get $12. I paid 10 and got back 12.
I pay $2 for $10 worth of real property and pay the rest off over 30 years at a very low interest rate, which I deduct.
If it goes up by 20% in 2 years, I get $12. But I only paid $2! And I lived in it for 2 years!
See how that works?
So the other $8 I used to buy the same stock and made 20% on that!
You’re being too complicated again. See my examples.