From the Wall Street Journal:
Bear’s Fund Is Facing
Mortgage Losses
Bond Sale Set for Today in Attempt to Raise Cash;
Woes Could Be Another Sobering Sign for Market
By KATE KELLY and SERENA NG
June 14, 2007; Page C1
A hedge fund managed by Bear Stearns Cos. is scrambling to sell large amounts of mortgage securities, a setback for a Wall Street firm known for its savvy debt-market trading.
The fund makes bets on bonds backed by mortgages, many of which are subprime, meaning they go to especially risky borrowers.
Faced with losses on its investments, the fund, called High-Grade Structured Credit Strategies Enhanced Leverage Fund, together with a sister fund, is trying to sell about $4 billion in mortgage-backed bonds to raise cash, according to people close to the fund and traders who have been solicited to buy the bonds.
The sales represent a sliver of the $7 trillion residential-mortgage-backed bond market, but it is still a large amount to be sold at one time and a potentially troubling sign for the broader mortgage-backed bond market.
…
Bids for the sale of bonds are due at 10 a.m. EDT today — shortly after Bear announces its results.Late Tuesday, Wall Street traders began circulating a list of mortgage assets that Bear had put on the block, according to email exchanges reviewed by The Wall Street Journal. On the list were roughly 150 of the funds’ most easily traded, investment-grade bonds, which are backed by subprime mortgages. The estimated value of the bonds ranges from $1 million to nearly $110 million apiece.
…
The Bear fund, which was down 23% in value in the year through April, has more than $6 billion in assets. Bear’s own exposure to it is limited. The firm and some of its executives have invested just $40 million in the fund, meaning Bear isn’t likely to be hit deeply by losses if the fund’s problems mount.
…
The mortgage-bond market has been a key source of profit for Wall Street, which has gone beyond simply packaging and trading these bonds to owning subprime lenders themselves and starting up hedge funds that focus on the sector.After several years of playing heavily in the market for subprime mortgages, players like Bear now contend with falling home prices and a rise in late or missed payments on some of the shakiest mortgages. Investor concerns about these developments have led them to sell some mortgage-backed bonds, putting downward pressure on portfolios like the one run by Bear.
Bear isn’t alone. Early last month, the Swiss bank UBS AG shut down Dillon Read Capital Management, an internal hedge fund, after bad trades in mortgages led to a $124 million loss.
From the same piece:
ABX’s Decline
An index tied to risky subprime bonds has in recent days plunged to lows last seen in late February. Traders say the dive in the index, called the ABX, was triggered by reports of rising delinquencies and foreclosures and a steep rise in long-term bond yields.
Rising interest rates could make it more difficult for homeowners to refinance their mortgages and could send more borrowers into default. The ABX index yesterday traded at around 62.5, down from 73 a month ago and a high of 97 early in the year, according to Markit, a data firm.
Ivy Zelman Departs Credit Suisse
http://calculatedrisk.blogspot.com/
Ms. Zelman gained fame among housing bloggers when she confronted Toll Brothers CEO Bob Toll during an analyst conference call in 2006 by asking: “Which Kool-aid are you drinking?”
Producer Price Index due out at 8:30am.
jb
I will not provoke the stooge today…
I will not provoke the stooge today…
I will not provoke the stooge today…
Sounds like rats abandoning the ship to me.
…although 200+ posts have amusing content…
Please do not provoke the stooge today…
Purdy please do not provoke the stooge today…
Purdy purdy please do not provoke the stooge today…
FYI.
Colgate-Palmolive: Fake Colgate toothpaste found in 4 states
Colgate-Palmolive Co., the New York consumer-products giant, said that counterfeit toothpaste falsely packaged as its Colgate brand has been found in several dollar-type discount stores in New York, New Jersey, Pennsylvania and Maryland. “There are indications that this product does not contain fluoride and may contain diethylene glycol,” Colgate said in a statement. The company “does not use, nor has ever used, diethylene glycol as an ingredient in Colgate toothpaste anywhere in the world,” a statement said. The counterfeit toothpaste is labeled “Manufactured in South Africa,” the company said. Colgate-Palmolive said it does not import toothpaste into the U.S. from South Africa. In addition, it said, “the counterfeit packages examined so far have several misspellings including: “isclinically”, “SOUTH AFRLCA” and “South African Dental Assoxiation.”
Gotta love JB’s case study reference.
“I will not provoke the stooge today…”
Clot,
Which one?
“The Swiss central bank raised its benchmark interest rate to a six-year high today and said more increases are likely to prevent an expanding economy and a weaker franc from stoking inflation”
“There is still a need to keep hiking interest rates,” said Jan Amrit Poser, chief economist at Bank Sarasin in Zurich.
“For now, the Swiss benchmark rate is still among the lowest in the world after Japan’s 0.5 percent, encouraging investors to borrow francs to fund purchases of higher-yielding assets. The franc has shed about 2.5 percent against the euro since the beginning of March.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aOVRAgdulQik&refer=home
carp, I better check my med cabinet…
“High-Grade Structured Credit Strategies Enhanced Leverage Fund”\
I like the name of the fund “High-Grade Structued Credit” made up loans from the likes of Donald and Richard !!
Yeaah Right !
From MarketWatch:
Losses on derivatives sink Freddie Mac Q1 earnings
Freddie Mac said Thursday that it lost $211 million in the first quarter, or 46 cents a share, from $2 billion, or $2.80 a share in the year-ago period. The company blamed losses on its derivatives portfolio and credit-spread widening for the loss.
If you don’t have at least 20% to put down, you should not buy a house, not only for the obvious reasons but having money in the bank also shows that you are diciplined and can manage money and save/invest. If you are impulsive and a spender, you probably don’t have the 20% and buying a house isn’t for you. Most people in my age group have the 20% of a house value in credit card debt.
and guess what? People in my age group are the future/current home buyers.
Happy House Selling! :)
I really shouldn’t speak for Richard, but in his defense, I don’t believe he is anywhere near being “subprime”. Sure, he might not share the bear viewpoint, but that doesn’t mean he is ‘f@cked’. Not every buyer is stretched or highly leveraged.
jb
feh
I will not provoke the stooges today…
Our first house went UC last week. Finalizing thoughts about the right financing strategy.
Initially thought 30-yr fixed given flat curve and low rates. Even after recent spike rates not that bad. However most likely we will be in this house ~5-10yrs.
Now leaning towards 10-yr I/O. Benefits: I think inflation is picking up so over 10-yrs amount of equity should naturally increase. I want to take advantage of interest tax deduction as much as possible, ideally all my life. I am in a high tax bracket so that matters if I can put the extra cash in funds/stocks and only pay 15% cap gains.
Second strategy more risky clearly if you have to sell. To me however if you have to sell soon the financing wont play a role. ITs where the market will go. So I would use this as a tax play. Also I like being short USD and inflation by holding a large mortgage.
Thoughts?
#20 Prices are declining at this point. So you may very well be under water after you close. And prices could remian flat for years, so I think it is a big assumption on your part. I/O’s scare the hell out of me;they are a toxic lending mechanism for most people.
I don’t believe he is anywhere near being “subprime”.
Maybe his mortgage isn’t, but his brain sure is
Re post 15; TBW
If people in your age group (mid 20s to early 30s?) are carrying 20% of the median cost of an NJ house in credit card debt we are in far more trouble than I thought. That’s a huge amount of cc debt and everyone of them should be in counseling yesterday.
If that was their total debt burden, including auto, and student loan debt (including graduate school) I wouldn’t think it was horrendous, but it is a bit of a worry.
lol
#21 I agree with pricing direction, although dont see a collapse outside select markets. People much smarter than me get the market wrong. We have found the house we like very much and can easily afford.
This question is not about market timing, its about financing strategy. Over the first years of ownership balance on I/O and conventional is almost the same.
PPI Up 0.9, Core up 0.2.
#25 If you can well afford it, then get a FRM, 15 years. There may not be a market collapse, but a 20 to 25% reduction in prices, perhaps more, is quite a haircut. Good Luck.
Interesting news from Bear Stearns; Q2. profits coming in well below estimates, $2.52sh vs. $3.49sh estimate. Bear attributing a large part of that to “declines in residential mortgage origination”.
re post 20; Just Bought
You are insane or an idiot.
If you take a 10-year interest only loan you are not buying a house, you are getting the worst of both worlds. You really don’t own anything, but you have all of the obligatons of an owner, i.e. maintenance, repairs, insurance, taxes,etc.
Do you plan on getting your furniture from a rent-to-own store as well?
Have you recently “bought” a car with a 7-year loan?
I hope you’re joking about your home buying, because I do not wish the trouble that awaits you on anyone.
#15:
If you don’t have at least 20% to put down, you should not buy a house, not only for the obvious reasons but having money in the bank also shows that you are diciplined and can manage money and save/invest. If you are impulsive and a spender, you probably don’t have the 20% and buying a house isn’t for you. Most people in my age group have the 20% of a house value in credit card debt.
sounds like were in the same age group: late 20’s/early 30’s. How many first time buyers do you think put down the full 20% in NJ? I think i’m pretty good with money, and make a decent salary for my age, but I’ve been living on my own since i finished college. Saving 60-80k in cash is not so easy…
Re post 25:
Just bought, based on what the strategy you laid out in post 20, I would say people much smarter than you have trouble tying their shoes.
“sounds like were in the same age group: late 20’s/early 30’s. How many first time buyers do you think put down the full 20% in NJ?”
Exactly! Not many…which is not good for the housing market. I am already seeing listings stating only will accept offers with no less than 10% down. Prices have to come down…
From Bloomberg:
Bear Stearns Profit Drops 10% as Mortgage Bonds Slump
Bear Stearns Cos., the second-biggest U.S. underwriter of mortgage bonds, said earnings declined 10 percent, the first quarterly drop in two years, as mounting home- loan defaults reduced trading revenue.
Second-quarter profit, excluding a one-time charge, dropped to $486 million, or $3.40 a share, from $539 million, or $3.72, a year earlier, the New York-based company said today in a statement. Earnings fell short of the average estimate of $3.51 a share in a survey of 14 analysts by Bloomberg.
Fixed-income revenue, which typically accounts for almost half of Bear Stearns’s total, dropped as delinquencies on U.S. loans to homebuyers with poor credit or heavy debt loads rose to a four-year high. Lehman Brothers Holdings Inc., the largest underwriter of mortgage bonds, reported record profit on June 12. Goldman Sachs Group Inc., the world’s biggest securities firm, said today its profit rose 1 percent, beating analyst estimates.
“There’s been mortgage-related concerns about Bear Stearns since the market started souring,” said Bill Fitzpatrick, who helps oversee more than $1 billion at Racine, Wisconsin-based Johnson Asset Management, which holds Bear Stearns shares. “Hopefully, we’ve bottomed up in that area and will see a recovery in coming quarters.”
From Bloomberg:
U.S. Producer Prices Rose More Than Forecast in May
Prices paid to U.S. producers rose more than forecast in May, reflecting a fourth consecutive jump in fuel costs that threatens a broader pickup in inflation.
The 0.9 percent increase followed a 0.7 percent rise in April, the Labor Department said today in Washington. So-called core prices, which exclude fuel and food costs, rose 0.2 percent.
The report underscores Federal Reserve concerns that inflation won’t moderate as forecast, economists said. Growing demand from overseas has pushed up prices for raw materials such as fuel and metals, giving businesses reason to try to pass on higher costs to customers.
“We have a lot of energy-price pressures that are still working through the system,” said Stephen Gallagher, chief economist at Societe Generale in New York. “The Fed is going to be worried.” Gallagher was one of two economists who correctly forecast the jump in wholesale prices.
Saving money is easier if you live at home and drive an old car, which is what I did…my fiance brought the rest of the $$$ to the table. Combined, we were able to put over 20% down to get the mortgage on a $350,000 house to an affordable level. If we didn’t put that amount down, no way would we be able to afford a house.
justbought,
There are certainly valid reasons to opt for an I/O. It was created for the well heeled, who want to utilize their dp for other markets/investments. I can certainly understand that. If you are not concerned about market timing and are sure you will be moving in 5-10 years, it may not be a bad move. RE does not come close to stocks, comparing returns over a period of time. Where this industry went wrong was chasing a market segment that had no chance in hell surviving with this type of financing.
It gets sticky if your situation changes in 5-10 years. Suppose you love the area and decide that this is where you want to remain?
Possibly there is a hiccup in your earnings, etc..
What’s confusing to me, is the correlation of buying RE to hedge the USD? I would just go the the NYBOT and sell futures.
Getting back to the story that started this thread, Bear’s bond sale seems to indicate how deep the current problems in that bond market go, and keep in mind that we are likely only in the very early stages of this housing downturn.
I’ve seen a few things recently on the amount of trouble hedge funds can get into because of the massive leveraging they use and I think this is just one of the first cracks in the wall.
The hedgies seem to be heading for shore, but there are very few docks and lots of rocks on the way.
I get the feeling that a lot of rich people are about to lose a lot of money.
From Bankrate:
Mortgage rates skyrocket, hit 11-month high
Imagine a troupe of fourth-graders putting on a profanity-laden production of “Glengarry Glen Ross.” For the actors, it would be a grim drama. For spectators, it would be a horrifying comedy. In the past month, mortgage rates have evoked similar emotions — desperation among some borrowers and lenders, and schadenfreude in everyone else.
The average 30-year, fixed-rate mortgage has climbed more than half a percentage point in the last month. Such a spectacular rise has happened a few times in the last decade, but borrowers haven’t exactly been clamoring for a revival.
The benchmark 30-year fixed-rate mortgage rose 23 basis points, to 6.84 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week’s survey had an average total of 0.27 discount and origination points. One year ago, the mortgage index was 6.71 percent; four weeks ago, it was 6.32 percent. In Bankrate’s weekly survey, the 30-year rate hasn’t been this high since July 19, 2006, when it was 6.89 percent.
The benchmark 15-year fixed-rate mortgage rose 20 basis points, to 6.53 percent. The benchmark 5/1 adjustable-rate mortgage rose 15 basis points, to 6.67 percent.
It’s been more than three years since mortgage rates rose so dramatically.
“She noted that in January, more than 60 percent of all new mortgages were “prime” products and that in the first quarter, 89 percent of borrowers with one-year adjustable-rate mortgages refinanced into long-term loans.
Additionally, home buyers and owners are loading up on mortgage insurance, spurred in part because it became tax deductible in January, Wachter said.
Mortgage insurance applications jumped 55 percent in March from February, she noted.”
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/13/AR2007061301600.html
#30
Saving 20% is hard. To put 20% down, you need to save more than 20% of the purchase price so that you can also pay for closing costs, moving costs, furnishing/painting the house, and a little extra money for unexpected things like a major car repair or something in the house breaking.
I am in the same age group and managed to save just about enough for 20% down plus some extra. I am lucky to have low rent and someone to share the rent with. It is possible to save the 20% but it’s a lot harder if you are living the lifestyle that many people in their 20’s live.
What really scares me more than the 20% down are the mortgage payment and the property taxes. After paying all that, it will be very difficult to save any money.
340 Penny: and that is why prices will drop.
there are a number of clowns on this board. the least you could do is admit it.
you see every time a poster throws out a label attempting to categorize and/or denigrate someone like myself who doesn’t hold a similar viewpoint to bolster their own you lose credibility. shame on you.
What’s confusing to me, is the correlation of buying RE to hedge the USD? I would just go the the NYBOT and sell futures
BC,
I’m not sure I agree, You take a position on the dollar, enjoy tax breaks, invest your DP in financial instruments and put a roof over your head.
In 10yrs, RE should be back running full speed and he’ll be fine.
>>Maybe his mortgage isn’t, but his brain sure is
i’ll match balance sheets and wits with you any day antitrump. you’re nothing but a bark box on an anonymous blog but i digress. personal attacks are for the less evolved.
Lindsey [37],
You’re right. The amount of leverage is mind boggling. Half the crap is off the books. There is no real market, not marked to the market but rather marked to the model [blackbox]. Since there are a vast array of settlement dates with multiple items leveraged, counter parties use assumptions. Both parties, different models, can actually indicate profits. It’s a ticking blackbox.
What really scares me more than the 20% down are the mortgage payment and the property taxes. After paying all that, it will be very difficult to save any money.
Penny,
In this case stay where you are, invest your 20%, continue saving and wait until you get to 30%-40%.
You never want to just be able to break even at the end of the month. Life takes too many twist and turns and you must allow for a shock absorber.
Missed this piece in the APP earlier this week:
Housing market discriminatory
If you aren’t rich or over 55, or both, your chances of buying a new home in Monmouth County are slim to none.
According to a county Planning Board survey released last week, the median price of a new home in Monmouth County reached a staggering $810,000 in 2006. And nearly half of the new homes offered for sale were available only to buyers 55 and older.
Where does that leave middle-income families or young people just starting out? Pretty much out in the cold. They can forget about buying a new home. They’re left to wait for empty nesters to move out of their older homes, or to relocate to a less expensive county, likely in a less expensive state.
Market forces are only partly to blame. New Jersey’s legislators have failed to develop a housing policy that addresses one of the root problems — exclusionary zoning that allows towns to effectively slam the door shut on low- and middle-income residents. The state should take control of zoning, eliminate regional contribution agreements, which allow wealthy towns to sell their affordable housing obligations to other towns, and require that developers of large-scale housing projects provide a mix of housing types as a condition of approval.
#31 Lindsay – tone it down if you want to have a discussion. People like you drive any dissenting view away from this board and I did not even disagree with the point that RE is overpriced.
# 36 BC -not correlating RE to USD. I just like being short USD period. Instead of putting all money into RE I want to borrow and put some into international funds, already have a good chunk there. I/O also maximizes tax deduction. Worst case 20-30% RE collpse not pretty, but no financial disaster.
Richard,#45
I never met a life long bear that ever made any money. I applaud your bullishness and envy you cause all this info I picked up here turned me into a baby bear.
This country was build and thrives on optimism and bulls like yoursef.
No one her want’s to here that housing prices will not go down significantly. If you tell them that it was their bearish outlook on life that kept them on th esidelines and they didn’t see a penny during the greatest RE boom of all time the’ll call you a communist or terrorist.
make,
I agreed with his financing [based on what he said], his desire to invest elsewhere, not his market timing. He stated he was bearish the USD. If you are bearish an instrument, go directly to that market and act accordingly. If you think gold is going up as the result of a bullish crude market, don’t buy gold, buy crude.
There is little tax benefit to going with an I/O versus a 30y fixed. The tax deduction will be relatively similar over the first few years. You mentioned the low end of the horizon was 5 years. In this case the tax benefit of going with the I/O is largely nonexistant.
Once you account for the spread between the I/O and 30y fixed, it’s obvious that any very small tax benefit that might be gained by using the I/O (at the longer term end) would largely be lost to the higher cost of financing.
Real estate itself is a dollar/inflation hedge, regardless of the type of financing being used. It’s the asset that is the hedge, not the financing method.
The fact that you are trying very hard to justify an I/O makes me believe that you can’t realistically afford the 30y fixed.
jb
“I just like being short USD period.”
justbought,
I get it. I read your initial post wrong. Regarding those deductions, amt?
I totally agree on the 20%. It is just a matter of being safe and prudent. We purchased last fall and definitely wanted to get the 20% down plus closing costs, plus another 10% in the bank for incidentals. Anyone coming from Manhattan will know how hard it is to save up money when your rent is $3000 and up. We were lucky and had a rent stabilized place since college and so my wife and I managed to stay in a decent two bedroom with our young son and save the money, all while I worked and went to grad school at night. I see my friends though that make triple what I make and they just spend it all on bigger rentals ($5000 a month plus) and fancier dinners. I honestly feel that living in Manhattan can set you back a decade in your finances if you let the “culture” get to you.
“I never met a life long bear that ever made any money.”
Make,
Why are you terming those that are currently bearish, life long bears? I was bullish RE from 1985-2005.
Instead of putting all money into RE I want to borrow and put some into international funds, already have a good chunk there.
Again, we’re not talking about financing here. 30y vs. I/O is irrelevant here. We’re talking about taking a higher leverage position so that you can invest those funds elsewhere.
jb
#52 JB – I’m looking long term here. I plan to always maintain a mortgage because of the tax deduction. This will be offset by a diversified portfolio of cash/stocks. Don’t want to go 30-yr fixed because dont want the balance of the mortgage to go down. 30-yr fixed payments no problem. Bought at the lower end of what we were looking, will put ~25% down although can do much more. Repeat to all: not extending financially here. Curious if im missing anything on the tax side. I’ve heard up to $1mm mortgages fully deductable.
Sorry, from what you said earlier it seemed that your outlook was decidedly short term.
However most likely we will be in this house ~5-10yrs.
JB [52],
That is true. I was calculating a 15 year. If he was comparing a 30 year, the savings, in the beginning are of no consequence. If that is his means of investing, he should not be investing.
Remember, nothing is stopping you from refinancing your 30y fixed when appropriate in order to move that additional equity into investments. You’ll gain the benefit of the lower cost of financing as well as not having to refinance at the 10y mark if you don’t want to.
jb
Re post 49:
Just Bought,
I was stunned by the plan you laid out. It is a horrible idea and I was doing my best to convey just how bad I think the idea is.
I/O loans are really for people who are in very exceptional financial situations (as BC Bob pointed out).
Also (as noted above) in a declining market, you certainly aren’t going to gain anything on appreciation.
There’s simply no point to placing yourself in harm’s way with a plan like that.
http://www.marketwatch.com/news/story/professor-spots-flight-safety-home/story.aspx?guid=%7BBEC0ED88-931D-42CF-8218-C9A8CEDA0B71%7D
With you Mike.. Our friends were out to eat Friday thru Sunday and we stayed home. I don’t think I have purchased new clothes or a new car since 1994… Have a 15 yr old TV and my furniture is from friends who upgraded..We saved for 5 years and put down 40%…You can do save quite a bit if you live very frugally
#59 Did not get your point
#60 I agree there’s refi risk at the 10yr point. At that time strategy will have to be reassessed. When I lock in will have to look at interest rates on 30s vs 10 i/os and asses the interest savings vs refi risk. I move in 5yrs if I can afford a house twice the size on the same street. Otherwise its 10-12+ yrs when no longer need to be v close to schools
rmb #63
“I don’t think I have purchased new clothes or a new car since 1994…”
How many American’s you can live this cheap.
I wonder what was in style in 1994? do you work from home? 15yrs of your life to save a 40% DP is awesome.
just bought,
Do yourseld a favor and lock in your 30yr fixed rate. Stop playing mind games with yourself. It’s not wirth it.
MM
I want to take advantage of interest tax deduction as much as possible, ideally all my life.
With all due respect, to me the idea of going out of your way to pay interest so you can claim a tax deduction doesn’t make sense. If effect, you are saying “I want to spend $1 per year fort the rest of my life, so the government will give me back a quarter”. In effect, you are down $0.75. Wouldn’t it be better to keep the dollar, pay a quarter in taxes and pocket the $0.75?
I am in a high tax bracket so that matters if I can put the extra cash in funds/stocks and only pay 15% cap gains.
Beware the AMT.
ITs where the market will go. So I would use this as a tax play. Also I like being short USD and inflation by holding a large mortgage.
Lenders are thinking the same thing. In an I/O loan, you will pay a higher interest rate.
Re post 48:
JB,
I think that could be a typo on price. I believe the number was around $450K for existing in 06, and I know the lowest price on new was $410K. I guess it is possible that median for new was $810K, but that seems a bit high.
There’s an awful lot of new here priced right around that number with most below it.
Please check out this listing on craigslist.org,
http://newyork.craigslist.org/wch/rfs/351445530.html.
Am I being unreasonable to suggest that $759,000 for a “Starter Home” is outrageous. I understand that the village of Bedford is desirable but that price for a “starter” is out of reach for all but the uber rich. And you could beg the question that if you had that type of money would you want to live in a 3Bed/1bath colonial
1994 Jeep Wrangler.. The engine is soo good on this car and we have only had to fix the exhaust. If you look in my closet its very basic clothes button downs slacks skirts black tan and white.. I have maybe a couple of things that are “trendy” I have had the same shoes for 3+years. I love them. and they are from Payless. I commute to NYC..we made 90K combined and saved 40 to 50K a year.. Last week was my first time in years to a mall. But we never give each other anything as gifts. And I make christmas gifts for family. My wedding ring is from ebay.
#63
……hence my “every bit of fun” comment from yesterday.
i’m not saying that rmb is doing anything wrong – you have a lot of will power!
i just can’t live like that.
Curious if im missing anything on the tax side. I’ve heard up to $1mm mortgages fully deductable.
Check AMT rules.
Great post RentinginNJ ( #67 )
A lot of people are missing what you have said!!!
With all due respect, to me the idea of going out of your way to pay interest so you can claim a tax deduction doesn’t make sense. If effect, you are saying “I want to spend $1 per year fort the rest of my life, so the government will give me back a quarter”. In effect, you are down $0.75. Wouldn’t it be better to keep the dollar, pay a quarter in taxes and pocket the $0.75?
And with AMT limits not being changed, we all will me paying AMT by 2011…. If wages inflation picks up even faster that this.
I am the daughter of Depression Children.. Thought we lived very nicely,, My parents never spent alot on clothes and gadgets.. Vacations were there thing..
I wish I still had my Wrangler.
jb
For those who no longer have faith in the RealtyTrac numbers..
From MarketWatch:
New foreclosures set record, delinquencies down
CHICAGO (MarketWatch) — A record number of U.S. homeowners entered the foreclosure process during the first quarter, the Mortgage Bankers Association said Thursday, with 0.58% of all loans entering the process, up from 0.54% in the fourth quarter of 2006.
The rate of subprime, adjustable-rate loans going into foreclosure jumped to a record 3.23% from 2.7% in the fourth quarter.
The rate of foreclosure starts would have fallen if not for increases in California, Florida, Nevada and Arizona, said Doug Duncan, MBA’s chief economist. Indications are that foreclosures in those four states are largely influenced by speculators walking away from properties now that home prices have begun to fall in some areas; many of those owners face resets in the ARMs they took out for the homes, he said.
The percentage of loans in the foreclosure process was 1.28%, according to the group, up from 1.19% in the fourth quarter and up from 0.98% a year ago.
The delinquency rate, however, decreased during the quarter, standing at 4.84%, down from 4.95% in the fourth quarter and up from 4.41% a year ago. Loans are considered delinquent if they are more than 90 days past due.
Its got 220K miles on it and the guy at the garage told us it could run forever.. Its my husbands car. My car was little more problematic its was a Volkswagen Cabriolet 1991. That thing cost us to much to repair so we sold it.
#67 agree with your points. Unless you see it as a form of leverage. If I can get a mortgage at 6%(just an example). Assuming ~30 fed tax rate thats 4.2% after tax. So I need to earn ~5% in cap gains at 15% taxed to break even. 5% is not much for a stocks portfolio over time.
Aware of AMT. Have a call into my tax guy to see if he has anything to say on this
Have to go for now. Thanks for all replies
“Goldman Sachs Group Inc., the world’s biggest securities firm, reported its slowest profit growth in three quarters as fixed-income trading slumped.”
“U.S. 10-year Treasury yields surpassed 5.3 percent yesterday on speculation that accelerating economic growth will boost borrowing costs. Securities firms have profited as low interest rates fueled takeovers and refinancings.”
“The overall business model is going to be pressured by higher rates and more challenging capital markets,” said Jon Fisher, who helps manage $1.7 billion at Fifth Third Asset Management.
http://www.bloomberg.com/apps/news?pid=20601087&sid=asPPzXBDSC5A&refer=home
“living in Manhattan can set you back a decade in your finances if you let the “culture” get to you.”
Very true. Same goes for the Metro area. Takes lots of disipline to not go out and waste money.
Fed up with the dogma of economics? What myths support economic bubbles?
check this out: http://video.google.com/videoplay?docid=928518742089256264&q=Zeitgeist
-Sapiens
#55 BC The guye is saying Bears do not amke money? Incredible!! So yioung so silly.
“Bear Stearns Cos., the second-biggest U.S. underwriter of mortgage bonds, said earnings fell 10 percent, the first quarterly decline in two years, as mounting home-loan defaults reduced trading revenue.”
“Not only did they cite the challenges in the subprime market, but they also perceived a spillover into Alt-A,” Fitzpatrick said in an interview. “If there’s a crescendo effect there, that will be a major concern for Bear Stearns and some of its competitors.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aavjbpXya8mk&refer=home
From Reuters:
Goldman sees subprime woes worse before rebound
Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research) Chief Financial Officer David Viniar predicted that the U.S. subprime mortgage market, which has suffered rising defaults and generated losses for lenders over the past year, will get worse before it gets better.
“The subprime business continues to be weak. We have not seen the bottom in the market. There will be more pain felt by people as it works its way through system,” Viniar told reporters in a conference call on Thursday.
sorry about the dead link
here it is
http://newyork.craigslist.org/wch/rfs/351445530.html
I love them. and they are from Payless. I commute to NYC..we made 90K combined and saved 40 to 50K a year.. Last week was my first time in years to a mall. But we never give each other anything as gifts. And I make christmas gifts for family. My wedding ring is from ebay.
Something does not add-up:
90K, after 30% in taxes (I am being very conservative – pull all taxes together – SS, MEdicare, Taxes, State taxes, NYC city taxes)
90000*0.7 =63,000.
let’s say you have saved 40K/year – that is living two of you with 23K to live on. Rent…. I’d say 12K(in NJ probably more, sionce you commute to the city), that lives 11K. You have car insurance – don’t you? – minus another probably 1K/year lowest.
10K left. SO you are down to 833/month/2 people in food, Commuting expences (don’t you say you commute to NYC???),Car maintenance, Health insurance, Dental, car titling, phone (- do you have one?) Utilities.
And it seems like there is always more expenses – like medication, misc. fee’s, parking fee’s, and the list goes on.
If you living rent-free than it is very possible, otherwise – I do not think so. Unless you are also counting your contributions to 401K and employer match as savings…
For me – 401K contributions do not exists untill I retire.
Condos selling for 50% off in Ft. Myers Florida, Desperate Homedebtors freaking out
Watch this video.
http://housingpanic.blogspot.com/2007/06/condos-selling-for-50-off-in-ft-myers.html
Condo appraised for $310,000, sold for $185,000.
Recent buyers screwed and outraged.
50% off firesale.
Yup, this is what a housing crash looks like.
Homedebtors, lesson #1 in a housing crash: You’ll always lose to the builders.
Always.
Lesson #2: You should have listened to HousingPANIC.
rmb: one of my cars is a 1994 Cherokee (5 speed manual trans)
That thing is a tank, nothing has destroyed it yet, and has about 160,000 miles. Good off-road capability as well. Only thing is the trademark oil leakage…
Freddie PMMS for this week is out:
Freddie Mac: 15-yr mortgage averages 6.43% vs 6.22%
Freddie Mac: 1-yr ARM averages 5.75% vs 5.65%
Freddie Mac: 30-yr mortgage averages 6.74% vs 6.53%
10 year is drifting down due to oversold conditions, expect the mortgages rates to do the same.
The average 30-year, fixed-rate mortgage has climbed more than half a percentage point in the last month…to 6.84%
A buyer who could afford a $2,500 per month mortgage payment just saw their purchasing power erode by $20,000. Where they could afford a $400K mortgage a month ago, now they can only afford a $380k mortgage.
Don’t get fixated with day to day trading activity. Watch worlwide trends/momentum. Look at a 10 year chart [20 year period]. It speaks volumes.
The banks, RE industry and even the gov’t to an extent want as many people as possible suckered into the so-called “mortgage interest deduction.” As posters above have pointed out, and I will reiterate: For those in the 25% bracket, how about you give me $1.00 and I’ll give you back (rebate) 25 cents? I’ll take that trade any day.
Feel free to contact me thru the blog.
#48
I really enjoyed that article. Glad to see that someone has the guts to say that “catering only to empty nesters and the wealthy is unacceptable public policy.”
I know that the legal decision is that it is not discriminatory because “eventually everyone will be 55, or rich”, but in practice it is, because they are not old, or rich right now, which is what counts. It’s also a great way to eliminate all people of working age and will – not exactly smart long term thinking.
#50 make money Says:
“I never met a life long bear that ever made any money. ”
I get the picture that you tend to confuse speculation with bullishness.
Warren Buffet could be described as a bear – he doesn’t speculate, he invests carefully in things he knows, with solid profits and discernable futures.
Video: LUXURY Home/McMansion Foreclosures ~~~~~~~~~~~~~~ !!!
Watch http://www.paperdinero.com/BNN.aspx?id=222
New Today! Luxury Foreclosures
Sad CNBC segment chronicles a poor bastard in Maryland who got caught up in the mania in 2005. He bought a waterfront property in the hopes of subdividing it, creating a luxury “dream” home for himself and another to sell for profit. Unfortunately, he is stuck with a luxury vacation home no one wants and his unfinished dream home and ready for auction.
Originally aired on: 6/13/2007 on CNBC
Running Time: 2 minutes 30 seconds
No lack of ‘high-end’ foreclosures in Bergen..
http://www.bcsd.us/sheriff_sale.aspx#sales
160 PULIS AVENUE FRANKLIN LAKES 982,307.60
57 OVERLOOK RIDGE OAKLAND 1,100,464.13
27 CHESTNUT AVENUE OLD TAPPAN 778,210.70
35 ELM STREET TENAFLY 740,907.53
2 RIO VISTA DRIVE ALPINE 2,569,814.02
15 DOGWOOD LANE EMERSON 854,457.60
232 AVONDALE ROAD RIDGEWOOD 1,199,030.05
25 BURNING HOLLOW ROAD SADDLE RIVER 2,403,957.10
250 CONCORD DRIVE PARAMUS 908,690.51
1080 QUIGLEY COURT TEANECK 768,045.84
131 HUDSON COVE EDGEWATER 1,169,915.35
From Bloomberg:
U.S. Mortgages Enter Foreclosure at Record in First Quarter
The number of U.S. homeowners who face possible eviction because of late mortgage payments rose to an all- time high in the first quarter, led by subprime borrowers, as the economy grew at the slowest pace in four years.
The share of mortgages entering foreclosure rose to 0.58 percent, including so-called prime loans made to the most credit- worthy borrowers, from 0.54 percent in the fourth quarter, the Mortgage Bankers Association said in a report today. Subprime loans entering foreclosure rose to a record 2.43 percent, up from 2 percent in the prior quarter, and prime loans rose to 0.25 percent from 0.24 percent.
For 2 of those years we lived with parents.. Then we bought ..
Commute for Both of us from JC was $120 a month , $500 on groceries month. No parking fees we owned the spot. Our mortgage was $900 including taxes. No Cable. No Cell phones. No Computer, Basic phone service $30. gas/Electric maybe $30-50 dollars a month ($80 in the summer for AC). Never needed to turn on the heat it seemed everyone around us had it on 80.Insurance was 1000 a year. We didn’t give to 401K for 5 years. We put whatever we saved in stocks.
Mortgage +taxes-$900
Phone $30
Gas Electric $65
Insurance car $83
Groceries $500
Commute $120
Spending for the two of us $200
__________________
$1898 * 12= 22,776
We never really used the car.. We just didn’t go anywhere
And yes within those 5 years he got a 10K raise. I got a 5K raise. After that we were able to move into our own place.
TBW.. both our cars ar stick.. We were just shopping round for a car and it so sad its almost impossible to find a manual transmission anymore.
[96],
This insanity does/will not discriminate. Bottom line, if you bought at the end of this run, with little/zero down or you have equity, willing to hold out until this market comes back to “your” price, you are on the sidelines/in the stands with Elvis Patterson.
“Warren Buffet could be described as a bear”
Buffet is not a life long bear, he didn’t get rich by attitute that all is doom and gloom.
Concetration investing builds wealth, diversification preserves it.
He’s an investor, not a speculator.
#98 JB More anti-real esate rhetoric, don’t you knwo that forclosures only happen in Newark and Paterson. Don’t you knwo that only the poor and minorities used sub-prime?
Foreclosures in Bergen county? well now you are just using a small sub-set to justify yoiur anti-real estate rhetoric.
I am just thinking out lus as to some of the responses you will probably get.
MM Convicne that the real estate boom was a good thing, and I will agree with you, I am serious.
I have a hard time believing that our friend JustBought actually exists, at least the way he explained himself.
I’m often surprised at how foolish people with a lot of money are, but usually they have someone with a lot of financial sense who can guide them.
He just had notions that a sane financial adviser would disabuse him of pretty quickly, so I just don’t see that scenario he painted as something anyone would actually do.
103 3b
What do you mean good thing? That’s relative. It was great for me.
You know what the funny thing was that when I quit my job at Pricewater I never thought I would do this good. I kept learning and laughing on my way to the bank.
#98 RMB
Very impressive! You are my new role model!
I’m with you on the clothes thing too, basics and a few “trendy” items. I also handwash instead of dry cleaning, depending on fabric type, with great results.
Also, I can’t believe all the marketing to new parents. What a bunch of hype. For every $800 stroller – and they’re everywhere, I always wonder if a parent put an equal amount in the kid’s college fund.
For every $800 stroller – and they’re everywhere, I always wonder if a parent put an equal amount in the kid’s college fund.
You have no idea how much my wife and all of her friends dropped on name brand baby staff. Everyone seems to have a thousand dollar stroller at the park. It’s amazing.
I know.. Don’t get the $800 dollar stroller thing. (But I do have to say being a geek myself I love the Orbit Stroller its very Si Fi) My daughter is 2 and one of 14 nieces and nephews.. 85% of her stuff is all hand me downs.. so we really saved money when she was born. I told my husband when we got married the only depreciating asset I REALLY need is a 46′ Ft Hatteras sportfish. otherwise.. I am not really into Stuff.. Don’t get the blackberry thing either… when I leave I am home with my family outside…If you need me that bad… leave a message on my answering machine (not voicemail)(my answering machine is 4 yrs old)
And, the $1000 convertible crib and changing table oh and $800 matching armoire with mini hangars, $200 high chair, designer babywear, the play seats, the mini furniture, the bassinet that gets used for a few weeks, the co-sleeper…
So sad, so much of it is only used for 2 years (at best) and then, that’s it… unless you can afford to have several children.
And, there’s a small re-sale market, people aren’t crazy about buying perfectly good baby stuff for free!
My friend has that $800 stroller and I hate it. The d@mn thing takes up so much room in the trunk and is impossible to quickly put together. And no, there is not even $1 in a college fund…but she does lease a lexus and is currently upside down in her pos ranch.
No lack of ‘high-end’ foreclosures in Bergen..
http://www.bcsd.us/sheriff_sale.aspx#sales
160 PULIS AVENUE FRANKLIN LAKES 982,307.60
57 OVERLOOK RIDGE OAKLAND 1,100,464.13
27 CHESTNUT AVENUE OLD TAPPAN 778,210.70
35 ELM STREET TENAFLY 740,907.53
2 RIO VISTA DRIVE ALPINE 2,569,814.02
15 DOGWOOD LANE EMERSON 854,457.60
232 AVONDALE ROAD RIDGEWOOD 1,199,030.05
25 BURNING HOLLOW ROAD SADDLE RIVER 2,403,957.10
250 CONCORD DRIVE PARAMUS 908,690.51
1080 QUIGLEY COURT TEANECK 768,045.84
131 HUDSON COVE EDGEWATER 1,169,915.35
What does the “judgement” column mean? I don’t understand, those are for sales in the future.
My sister is worse then me.. Her son for the first 4 weeks slept in a drawer because she was waiting for my sister to be done with her crib.. we are all very cheap.. But we have fun…
I looked at one of the old Dr. Spock’s books, and one of the few items mentioned: a drawer, lol! Love your sis too!
Compare that with the list in the current baby books….
I just wasn’t raised the way kids are today. We had a nice house ect.. I remember being 6 or 7 and Hello Kitty bike was the thing every girl around me had to have and did.. My parents bought me hello kitty stickers and pink spray paint … to paint my sisters old bike.
That is what I mean. The strollers in Manhattan were out of control. I read an article in the Post that basically stated that since no one can see your car (if you have one) in Manhattan because of garages, the stroller was the new “status symbol”. That is a freaking joke in my opinion. If a guy has to get his kicks out of paying $1000 for one of those Swedish contraptions or a Bug a Boo then he needs to get a life and maybe repair some childhood issues himself. My son still (he is 3) uses his MacLaren $100 stroller all the time. The thing is comfortable and folds up into basically nothing. We take it everywhere and use it all the time. Our other friends had to have the bug a boo and break their back every time they take it up and down their subway stop in Brooklyn. It has nothing to do with being able to afford the thing as I could easily buy one. It is stupid group “midthink” that these things are actually useful in NYC where you get in taxis all the time, jump on a subway with no elevator, jump on a quick bus ride across town, etc. They Suck for this and no one seems to realize this until it is too late. I took the $1000 and put it into his college fund on day one. Then I convinced my parents to do the same any time they think he has to have something. A private university will cost nearly $100K a year by the time my son hits 17, think about that nugget for a second.
“I just wasn’t raised the way kids are today”
rmb,
My older brother’s closet was my mall.
the bug a boo’s are not practical for city living. their width makes them difficult to get into and out of the smaller storefronts sprinkled throughout the city. i laugh every time i see someone trying to navigate into these stores knocking over things just to look cool.
Hey now, you can’t knock everyone with an expensive stroller! I’m getting one – but in this case, I’m not paying for it myself. My mother INSISTED. And since she’s buying, she can buy what she wants. As far as I am concerned, a stroller is a stroller – I had a pram and then an umbrella stroller when I was a kid and I survived. She’s also buying me my linens and co-sleeper and throwing the shower and has already purchased an entire wardrobe for the kid. It’s very hard to say no to grandma when it’s her first grandchild AND it’s a girl.
As for furniture, who is spending 1K on a crib? I’ve never had a friend who did that. All of the ones I see seem to run between 299 and 499, depending on the style and whether they’re convertible. And a changing table/dresser isn’t much more expensive, at least from what I’ve seen.
And we’ll start a college fund. I see the point about the whole “groupthink” mentality, but just because we’ll have some expensive baby products doesn’t mean we’re automatically financially irresponsible!
#116 Yep, do the same thing with Christmas and Birthday gifts…Please don’t buy my kid a $100 toy or outfit(she has a lot of doting childless aunts/uncles). If you must buy – something inexpensive, and the rest we’ll put in the college fund. I’m happy putting $20 in the fund – will buy a text book 13 years from now (hopefully).
I still have to figure out what to do about all the gifts from birthday parties, even if you ask for a donation to be made to a charity instead, so many parents still give a gift…
We also work really hard on recycling old toys – giving them to kids that don’t have any. My daughter has gotten really good, at the age of 5 of trying to find the right “baby” for the right book or toy. Great lesson for the future.
My husband’s family grew up very poor in El Salvador, they are always completely shocked by all the toys my kid has. It totally amazes them. They are more likely to give us money as a gift (it’s cultural), which we do put right in the college fund.
We really have a tiny apartment, and have no room, if something comes in, something HAS to go out. I also think the more toys / stuff a kid has, the less chance they have for plain old creative, imaginary kids play. I’d rather spend $20 going to the Museum of Natural History or the Met and learning about something inspirational, tha n having another Barbie doll, lol.
#93 happy to borrow from you at current mtge rates as much as you can handle. On every $1 of interest I pay will happily take $0.25 back from you
contact me through the blog
#106 Lindsay -I do exist and thanks for the compliment – the lots of money part… not what you had to say about my intelligence
funny, I had no idea there were”designer strollers”
I guess those young parents can’t inpress everyone…
impress…sorry
We were walking around in Hoboken on Sunday and actually were commenting on all the fancy strollers when this lady comes down the street with a cat stroller. It was a stroller with a nylon box divided into two sections. In front was an open netted area where the cat could enjoy the scenery while strolling. In the middle, dividing the two, was a nylon partition with a hole in it. The back was an area that was fully enclosed where the cat could go and get some privacy. All we saw was a white tail sticking out from the back and a growling cat. We didn’t even wait for her to pass before busting out laughing. It was the most ridiculous thing I’ve ever seen. The cat clearly wasn’t enjoying Washington St.
NJGal–after dealing with my friend’s bugaboo during shopping trips, I don’t think I would even take a free one. The thing is a monster. I actually look at others in simple strollers at the mall and feel envious of them. The stupid seat and frame for the chameleon model literally takes up the entire back of an suv.
My friend has that $800 stroller and I hate it
Wow. I thought going for the $300 PegPrego was going a little overboard! I feel better now.
No lack of ‘high-end’ foreclosures in Bergen..
http://www.bcsd.us/sheriff_sale.aspx#sales
160 PULIS AVENUE FRANKLIN LAKES 982,307.60
57 OVERLOOK RIDGE OAKLAND 1,100,464.13
27 CHESTNUT AVENUE OLD TAPPAN 778,210.70
35 ELM STREET TENAFLY 740,907.53
2 RIO VISTA DRIVE ALPINE 2,569,814.02
15 DOGWOOD LANE EMERSON 854,457.60
232 AVONDALE ROAD RIDGEWOOD 1,199,030.05
25 BURNING HOLLOW ROAD SADDLE RIVER 2,403,957.10
250 CONCORD DRIVE PARAMUS 908,690.51
1080 QUIGLEY COURT TEANECK 768,045.84
131 HUDSON COVE EDGEWATER 1,169,915.35
Was there some recent seismic event? Have the plates shifted, moving Bergen further west.
“NJGal–after dealing with my friend’s bugaboo during shopping trips, I don’t think I would even take a free one. The thing is a monster. I actually look at others in simple strollers at the mall and feel envious of them. The stupid seat and frame for the chameleon model literally takes up the entire back of an suv.”
That big? Everyone I know who has one loves it. but then again, we’re not living in the city. I looked at the orbit because as someone said it looks all sci fi and cool, but it has not been tested by Consumer Reports (the others seem to be). We do have a huge SUV, but maybe I will force mom too look at other stuff. The only good thing about the Bugaboo is that it does last from infancy to about 3 or 4 years, and you can use it as a car seat base as well. I actually don’t know how much use I will have for a stroller right away anyway – and if I can avoid it, I am not going to be the mother in the mall with her damn stroller. If I have a free day, family shopping trip to the mall is not how I want to spend it.
NJ Gal…
But, there you go, a college fund AND a stroller….a lot of the parents I know don’t do that. They have the prestige – highly visible items – and then will worry about college later.
And yes, grandparents can do whatever the heck they want to do, that’s their job.
However, add up the cost of stuff you let go of in a couple of years (or even when she goes from 3-6 mos, to 6 to 9 mos size clothes within two weeks – or skips a size entirely due one of the big beauitful OMG growth spurts) when your beautiful daughter is ready for the next phase…
>>As for furniture, who is spending 1K on a crib?
go to buy buy baby. the higher quality wood furniture runs around $500-$700 a piece. $3k is easily dropped on basic set.
NJ Gal…my point was more we are cheap because we really can’t afford to be otherwise. To survive around here on less pay you really need to be frugal… If your looking for a stroller that is beyond awesome and your parents are paying may I suggest the Orbit stroller… It was made by 2 aerospace engineers. Its beyond awesome..
NJ Gal, I am absolutely not implying that. If you truly like the stroller for what it is then I say get it. The same goes for your mother. My parents spend so much of their hard earned cash on my son (their first grandchild) that I had to tell them to cool it. They bought us basically everything and the rest of our relatives did the same with things like clothes for him. We did not spend a dollar on clothes until he was almost 2. I am only knocking the people who do ZERO research and expect a $1000 stroller to be any better than the $100 one. Take it from me, they look cooler, but they are a pain in the arse to get in and out of stores like Richard says and pack up quickly and easily. Plus I leave the stroller everywhere when we go places like stores and restaurants and my son wants to get out. I could care less if someone takes it. I could not justify dropping a bug a boo off at the front of a store without thinking first as they get pilfered all the time. When it comes to new grandparents, they love to shower gifts. My only advice would be to try to change that thinking into having them setup a 529 for your daughter, buy the Maclaren Volo (great stroller for kids at least 8 months old) and put the extra $900 into the 529. In 17 years it will be $3330 at 8%.
For the early years we bought one of those graco car seat holders to use as a stroller and it worked with his infant car seat. When you jump on a train/bus/taxi all you have to do is unstrap the car seat from the frame and go. It was so easy. A bug a boo is a nightmare to pack up. Trust me on this one.
NJ Gal..
Check out the following for those family days:
Muscoot Farm is a lot of fun with kids; Caramoor has a family program too! And the Katonah Art Museum.
Nice headline by The New York Times re: Goldman and Bear earnings:
Subprime Problems Hit Both Goldman and Bear Stearns
By MICHAEL J. de la MERCED
Published: June 15, 2007
Turmoil in the subprime mortgage market took its toll on two Wall Street investment banks today, as second-quarter profit at Bear Stearns dropped 33 percent and Goldman Sachs squeezed out a modest 1 percent rise in profit.
….
Both firms suffered from the implosion in the subprime mortgage market, as borrowers with poor credit histories defaulted on their loans in record numbers. As one of Wall Street’s biggest underwriters of mortgage-backed securities, Bear Stearns felt the brunt of the impact: its fixed-income business reported revenue of $962 million, a 21.3 percent drop from the period a year ago…..
More at:
http://www.nytimes.com/2007/06/15/business/14cnd-banks.html?_r=1&oref=slogin
(subscription to Imes Select may be required, I think)
“However, add up the cost of stuff you let go of in a couple of years (or even when she goes from 3-6 mos, to 6 to 9 mos size clothes within two weeks – or skips a size entirely due one of the big beauitful OMG growth spurts) when your beautiful daughter is ready for the next phase…”
True. But you haven’t met my mother:) She literally will live for this child. And if I have another, which we hope to, we will just do hand-me-downs. As for me, Old Navy is the biggest blessing for growing kids. When we were growing up, only Bloomingdales and Saks and a few random boutique stores existed for kids. My poor mother spent more on clothes as we were growing than was necessary(and I’m 5’10” so many of my clothes were adult before my time). Now, she didn’t mind, but I am more than happy to buy “throw away” level stuff for my kids.
Richard, I would never spend that at BuyBuyBaby. I won’t buy furniture from anything but a furniture store. Just not worth it to me. I trust a furniture store more.
Lindsey Says:
June 14th, 2007 at 10:49 am
I’m often surprised at how foolish people with a lot of money are, but usually they have someone with a lot of financial sense who can guide them.
L: you need to tone it down a couple of notches….the guy came for some opinions and you basically referred to him as a liar or an idiot, or some combination.
There are people out there that have the means and work in the financial services sector. Their jobs drive them to overthink some of the more basic decisions in their personal situation. What “justbought” is guilty of is overthinking and killing a fly with a sledgehammer. I think “rent”‘s post was on the money, and it seemed to resonate with justbought. Also, I prefer the 30YF due to the amortization schedule and implied discipline. I’ve seen time and time again that forced discipline is better than theoretical discipline.
Sassy, heard of that farm. We’ll check it out. I’m such a dork – I can’t wait to go to the Renaissance Faire in Monroe. And no, not in costume, although that would be pretty funny.
I seriously can’t wait to move – my dog needs a backyard so badly.
So Bear earnings down, GS down, does that mean the year end bonuses will be down?
what’s with these women???? i thought this was a real estate blog?!$@! strollers and hello kitty??? WTF!
just wasn’t raised the way kids are today. We had a nice house ect.. I remember being 6 or 7 and Hello Kitty bike was the thing every girl around me had to have and did.. My parents bought me hello kitty stickers and pink spray paint … to paint my sisters old bike.
do you really think strangers on a blog care how you grew up???
pick up the phone, IM each other, get each others email…something. go take your petty discussions to the ladies room.
x53,
You may very well be right. But have some class. There is no need to attack me.
RMB, that Orbit does look mighty awesome. But it’s even more expensive than the Bugaboo. I can check it out, but I was also going to look at the Peg Perego Pliko, which is very highly rated.
“My only advice would be to try to change that thinking into having them setup a 529 for your daughter, buy the Maclaren Volo (great stroller for kids at least 8 months old) and put the extra $900 into the 529. In 17 years it will be $3330 at 8%”
Do you know what my parents answer to this was when I raised it? “People die.” The exact words out of my mother’s mouth. She basically assumed she and my dad would DIE before I needed money for college and that they would leave it for that purpose. CREEPY. I yelled at her. She was all no-nonsense about it though. So discussion ended! But I know my Dad. Dad grew up in a family of 12, so when he got money, he got generous. I would not be surprised to find a bank account set up without my knowledge, or some kind of long term investment fund for the baby. He just does stuff like that without asking.
I may set up a 529 myself though, and will contribute. Are they really the best way? I have heard they were not as great as supposed.
I recently worked at Bear for 6 years and basically as long as the total profits for the year hold up the bonuses should be fine. If the market does a complete meltdown then I think bear is in serious trouble as they have massive amounts of money in the game regarding the mtg market. Bear has NO qualms with cutting bonus numbers once the market turns, trust me on this one. If the purge is more gradual and the year ends about the same or slightly less than last year then I can see bonus numbers dipping a bit. Don’t cry for anyone over there though. The average bonus is well north of six figures and I can’t tell you how many people I knew over there with 7 figure numbers. It all depends on what bear thinks 2008 will do. Remember, your bonus is not paid for what you did the year before, it is a reasonable assumption of what the bank has to pay you to keep you for the following year. If thew outlook is horrible but 2007 ends on a decent note, expect numbers to be quartered or halved very easily. (Still no reason to cry either)
Disclaimer: shill violation
If you are discussing setting up a 529 plan, I offer this service.
I’m a dork right there with ya, lol!
Hoping when my daughter can walk a better, we’ll go the Renaissance Faire too! However, due to her Cerebral Palsy, we still depend on our (MacLaren Volo – lightweight, toss over the shoulder, and easy to fold, hint, hint : ) ) stroller. A full day at the fair would be a lot for her. Hoping next summer she’ll have a little more endurance (me too, I hate the heat, go during labor day).
If you see a women pushing a kid in a wheel chair (kid will be having some great surgery) in Mt. Kisco this summer, that’ll be me! Pull over and say high! I’ll look for the 5’10” preggo lady, lol! And we can swap the “hot spots” for kids in Westchester, and maybe some babysitter ideas.
PS We used a Baby Bjorn for the first few months – great way to get around. Then went to the Volo.
We have a Valco
http://www.valcobaby.com/2006/single.htm
sorry to insult people’s sensibilities
A very good low expense 529 is New York’s direct plan. The expense ratio is very low compared to other plans. What is great about a 529 is that it is separate from your other accounts. This way to temptation to purge the account for things that are not absolutely necessary is lowered. I live in NJ and still use the NY plan since NJ gives no deduction on state income for 529 plans. NY allowed up to 11K or so I think if you lived there.
Mike, I will look into the NY plan. I might have to get in touch eventually ChiFi. I need to figure out the house budget when we move first, and then when I am off from work, I will probably take time to look into this stuff. That’s because my baby will sleep perfectly on schedule and a lot:) (sarcasm off now)
rmb –
You may very well be right. But have some class. There is no need to attack me.
no need to attack you…but i guess it would have been alright if it was somebody else. I can’t believe how self-centered you are.
go ahead tell us more about you, please! what about more stories about your sister.
#106 MM I understand it was a good thing for you, but can you honestly say that in its totality that it was a good thing? If yes, then you and I simply disagree.
These things never end well;they never have.
#121,
justbought Says:
June 14th, 2007 at 11:28 am
“happy to borrow from you at current mtge rates as much as you can handle. On every $1 of interest I pay will happily take $0.25 back from you”
Hmm. That’s a tricky reply to my rhetorical offer.
That deal might work if I were a bank, or if banks rebate 25% of mortgage interest to the borrower.
I think you’re making a valid point here. Lending entails risk? But your logic may be too subtle for me.
X53..
I see you are looking for an argument so I am going to back down. Rarely, do I post on this board. I am not as savvy in finances and my way of communicating how we survived is by personal experiences. Maybe that’s not good enough for an Financial wiz like yourself. I am very rpound of the way I was raised and my family and if that makes me selfish so be it.
NJGal, since you will be a NJ resident, the NY 529 plan would be perfect for you. They have Vanguard index funds (unfortunately, the stinker is no international fund offering) and over an 18 year timeframe, they should do very well. You can choose the static or an age-based portfolio, the latter portfolio gets more conservative as the child grows.
You also get a $10,000 deduction on NY state taxes for 529 contributions.
Better, get the rich grandparents to bunch together the $12,000 gift allowed tax-free every year to anyone, and contribute $60K in one shot! That $60K compounded over 18 years will take care of the kid’s college expenses.
Also, there is this irritating Upromise that you might notice in grocery stores, etc. If you link your credit card to Upromise, they contribute a pitiful 1-2% of certain purchases into the 529 account.
Hope this helps…..
Sorry, #151 should have read “NJGal, since you will be a NY resident”
#149 My point is just that a mortgage is the only was to add significant leverage for an individual at tax-free rates. Many disclaimers apply and leverage not right for everyone, etc.
If you feel some amount of leverage is right for you, you should do that to diversify your returns, if nothing else. Of course lots of people are overlevered as is with RE, credit card, car loans etc. But being debt free is not the right answer all the time
Curious … just how bad does everyone think the rising rates will damage the industry?
Or will it have a reverse effect and make people buy, because they think rates will be 7.5 by the end of the year?
dream: we of course will butt heads on the index issue
I have to take a stand and say it like it is [from my perspective]…the best Vanguard funds are the actively managed ones, and you do not get any access to those in the NY529 Direct plan.
The “age-based portfolios” are a bad idea, as they are overly conservative, and I would cynically describe them as the “Vanguard/NYS lawyers’ liability reduction portfolios” whose investment objective is “Reduction of risk for plan sponsors” not maximizing investor returns.
x53Teter Says:
what’s with these women???? i thought this was a real estate blog?!$@! strollers and hello kitty??? WTF!
The perpetual daily argument with the naysayers is just as much a waste of time, so just roll with it
Dreamtheaterr, thanks for that – do you use the UPromise or is it not even worth it? We don’t use credit cards very often so I may skip it, but I think I will talk to my parents about money instead of gifts. I will allow them to indulge a bit for the shower and birth. After that, I am going to ask for mostly cash. After all, how much does one kid need? For example, the baby will come right before Christmas. I know they will want to buy a lot of presents, but seriously, for a one month old? We used to go nuts buying stuff for our niece and nephews until we realized that until age 3 or 4, the wrapping paper was infinitely more fun for them than any present we bought:)
Someone put in a bid on my house (13% off asking, 17% off OLP). I plan on submitting a counteroffer today. Since I don’t plan on buying a house until the day after my current house closes, I wanted some recommendations on short-term housing. Is there such a thing as a two month rental contract? Does anyone have expereince with Extended Stay?
Going back to earlier discussions today regarding the 20% down payment…..
At the least, folks should have the 20% DP. Yes, we do have other fancier mortgages to get your into a house early, but I don’t want to move into a house I have no skin in.
But beyond the 20% also means closing costs, and a cushion for emergencies (3-6 months of living expenses), etc. What a lot of people do not realize is that they are suddenly very highly leveraged into just one asset class, if they have no other savings. The whole premise of being diversified between stocks, bonds, commodities and cash got thrown out of whack with their first house purchase.
My .02 cents
Also – the NYS tax deduction does not require residency. If you derive income from a source domiciled in NYS, you can access the deduction, the top marginal tax rate in NYS is 6.85% so the maximum annual tax reduction for a married couple is $685 [recieved for INVESTING, nothing to do with the eventual qualified withdrawals]. The NJ plan does not have this feature. In Pennsylvania, you receive the tax-benefit for being a resident, so use the best plan you can find [Pennsylvania’s plans are ‘basura’].
NJ4life
If you look hard enough, you should be able to get aplace for short term. Look at smaller landlords. If you tell them that you will only be there a few months they I think would be more willing to do this than larger landlords. Also look into PODS. They drop this POD off at your house and you load it up yourself. Then they take it away and store it until you move into your new place. I heard it works great and is cheaper than getting two sets of movers.
#155, Chifi I suggested the NY 529 since you get the state deduction, which is a big incentive for NY in-state residents to save. An annual $10,000 deduction in state taxable income at the highest state tax rate NJGal is in trumps investing in any out of state plan.
Outside of NY plans, I think the next best option is the West Virginia Plan (managed by Hartford) that offers the DFA funds….over 18 years, I don’t see any other actively managed funds by other companies beating DFA funds. Importantly, they provide access to all the asset classes.
I agree that the age-based portfolios are too conservative; I avoid them. But to a DIY investor who does not know/care about rebalancing and risk management, it will help if that fund is their only holding for that specific purpose.
When I was driving to work today, I heard about 400 jobs being cut from Lehman (??). I have no other details, but I was left with th impression that it was off the CDO’s desk. I do not know whether in was NYC jobs, London or what. Bottom line, I searched in a number of places and turned up nothing. Did anyone else hear anything?
#157 NJ Gal, the Upromise thing is not worth it. I think I’ve goten back 50 bucks in a whole damn year….. what a pittance.
There is month to month rentals in our area. Most houses that have been on the market for a while have resorted to this. Our neighbor is doing it as we speak.
dreamtheaterr Says:
June 14th, 2007 at 12:30 pm
#155, Chifi I suggested the NY 529 since you get the state deduction, which is a big incentive for NY in-state residents to save.
As I mentioned, out of NYS residents with NYS based income are eligible to reduce the taxes paid to Albany.
Thanks Chicagofinance as my wife works in NYC and so we still derive income from NYS. I will remember to include our additions to the NYS 529 when we do her NYS taxes. I hope chicago weather is good these days as we are coming into town for the yearly family visit on Saturday.
sadly, I missed yesterday’s discussion on the idiots trying to buy a 500k townhouse when they only make 70k … unreal.
we’ve got our 20k set aside, we just want prices to return to earth. we’re making a good salary, but dont want to buy too big (over 400k) because if the baby comes in the next few years, we’ll be down to one salary, and WORST case scenario is that person losing their job …
yes, i’m a pessimist, but the potential to buy now and sell at a loss four years later is totally there.
MakeMoney:
Don’t confuse optimism with financial smarts. You don’t get rich by always being optimistic.
And just because you are bearish on a specific asset class doesn’t make you a pessimist.
Remember RE is not the only way to make money and if you go back a number of years, it is probably the slowest and way to build wealth.
dream: be careful, you pay 55 basis points for “program management fee” – but “in the land of the blind, the one eyed man rules”, so there are much worse things to do
http://www.savingforcollege.com/529_plan_details/index.php?page=plan_details&plan_id=145
Mike NJ Says:
June 14th, 2007 at 12:34 pm
Thanks Chicagofinance as my wife works in NYC and so we still derive income from NYS.
-prego-
Get the UPromise Citibank card. You get 1% on all purchases (up to $300 per year). It is a free $300 for doing nothing different. We put EVERYTHING on our credit cards to get the float (as we pay them off every month) and the 1% bonus. It is not a lot but if you get your parents and your siblings without kids to do the same and they all put that $$ into your Upromise account you can easily get over $1000 a year this way. Free money is good money.
161 Mike,
Not sure what you mean by smaller landlord versus larger. I’m assuming you do not mean in stature (NJ humor).
Thanks dream and Mike. I really need to get on the ball with these things…
#153,
Could not agree more. Thanks for the clarification.
I’m all for the use of leverage in real estate, especially considering the decline of the dollar and inflation.
I just wanted to concur that feeling you have to buy to get the mortgage interest deduction (as many people do) is not necessarily true.
If one has a proper diversification of assets, there is nothing wrong with using leverage to purchase real estate. Debt free is generally preferable but not always the way to go.
#172, till a while back, Fidelity had a 2% cash back card that could go into their 529 plan. Buth the expenses on the account (as it grew) would nullify the extra cash back on the credit card.
Personally, I use Fidelity’s 1.5% cash back card for everything. I charge everything I can on the card, and pay it off in full every month. I direct the cash back quarterly into a Fidelity money market brokerage account I have with them. They charge no account maintenance fees anyway. And I am also in my danger of running into their annual limit.
#174, NJGal, you are 18 years ahead of the ballgame. Most people are clueless about these things, and wake up when it’s too late. The fact that you have thought about a 529 is the first ‘baby’ step! Time and compounding is on your side.
Sorry, #176 should read “And I am also in NO danger of running into their annual limit”
dreamtheaterr Says:
June 14th, 2007 at 12:58 pm
#174, NJGal, you are 18 years ahead of the ballgame. Most people are clueless about these things, and wake up when it’s too late. The fact that you have thought about a 529 is the first ‘baby’ step! Time and compounding is on your side.
dream: yes and no – If you are serious about having your child go to an elite [and in many instances -not so elite- ] private institution, that cost is more than you would fathom. Since people’s eyes glaze over, it doesn’t seem real. Ultimately, if you want to make it systematic and painless, the answer is roughly $900-1,000 a month PER CHILD – PER MONTH for 18 years. See — people don’t even want to think about it.
That said:
1. you are not required to have the whole thing paid off before the kid sets foot on campus
2. it probably “builds character” [ :P ] if the kid is on the hook for part of the cost, so there is a natural sense of owenership of the process
3. maybe “junior” manages to get a partial scholarship
4. maybe “junior” or you chooses a cost effective alternative
“Ultimately, if you want to make it systematic and painless, the answer is roughly $900-1,000 a month PER CHILD – PER MONTH for 18 years. See — people don’t even want to think about it.
That said:
1. you are not required to have the whole thing paid off before the kid sets foot on campus
2. it probably “builds character” [ :P ] if the kid is on the hook for part of the cost, so there is a natural sense of owenership of the process
3. maybe “junior” manages to get a partial scholarship
4. maybe “junior” or you chooses a cost effective alternative”
Vomit, vomit. I should just keep throwing up for the next 18 years! I am pro-elite school if it’s a great one. Otherwise, I see no difference with certain private schools than public. I am not going to spend 50K a year or more to send my kids to a 2d tier private college. Princeton, yes – I’ll scrimp and go hungry for certain schools (and I chose this only b/c I saw the education hubby’s BFF got, and the many steps in his career that it’s helped him on – there are certainly other great places). But there are fine public institutions as well.
If not public, and no scholarship, I think I will have to have my kid pick up the loan cost if they want to do something I can’t pay for. I didn’t have loans so it stinks my kids might, but then, if you listen to creepy mom, maybe they won’t because PEOPLE DIE. Ugh!
#179
Reality is that average middle class families can’t afford private colleges without going into severe debt. In articles I have read, students come out of college owing tens of thousands of dollars in loans many from private sources with high interest rates. Gone are the days when a student loan will actually pay for a college education. Maximum guaranteed gov’t student loan is around $17,000. Any more and you have to go private. $17,000 split into 4 years won’t even pay for Montclair State tuition only.
We recently had to tell our 13 y.o. that she most likely won’t be going away to college (she was talking about it and we thought we should let her know what the reality was). If she can get something for academics or athletics then great but otherwise it will be commuting to a state college. Room and board is at least $10,000 which isn’t worth it to me when I need to save for retirement. Even going away to Rutgers, right now, is $20,000. While my husband and I both went away to NJ state schools for undergrad and out-of-state state schools for grad school, it cost so much less than it does today. My master’s degree from a top state university elsewhere cost me $6,600 total in 1992-1994 for tuition and fees (I was a resident of that state). My undergrad costs ten years earlier were $3,400/year for tuition, room and board.
I have talked to parents who intend to take out 2nd mortgages on their homes just so their children can go to top colleges (most likely 2nd tier).
How about a 1/3rd rule…… parents contribute 1/3rd (now that $800-900 figure is more manageable too!), Jr. takes 1/3rd in student loans (it instills accountability and responsibility) and 1/3rd by scholarship (by promoting academic excellence early on in school).
I know my brother’s colleague (a physician) who was to pay the entire 4 years at Yale. After 3 and a half years, the son told dad “I need a year off to think about life”…. and went off to South America (presumably for meditation??). When kids have no stake in the pie, the parents are the ones disappointed.
#181
I also want to add that out of the $3,400 for college I took out a $2,500 loan so my parents helped me out with $900/year for 3 years and I commuted my final year. That is all of the support I got. All of my spending money, clothes, books, etc was from my summer job. I even spent a semester abroad with money from my job. Even though my father was a teacher and my mom had a part time job office , they could afford to send me away to college.
Also with the way the world is being integrated, don’t rule out possibility of sending your kid overseas for an education. It may be worth it (cost and quality of education wise), if the dollar isn’t worthless by then.
I have friends went to Russia and India for med school, and came back to the US to finish their residency.
Mike NJ and NJGal
Re maximizing credit card rewards, I’m fairly obsessed with this subject. If you’re only getting 1% back on all purchases you’re definifely not maximizing your rewards opportunities.
If you’re interested in this, I’d visit the finance forum at fatwallet.com or personal finance blogs that discuss this stuff for reward-maximizing strategies.
Pooch, that fatwallet site looks cool, thanks.
“Rich In NNJ Says:
June 14th, 2007 at 1:21 am
My house is well priced. I just looked up 2 Lafayette Avenue in Cliffside Park, which sold for $1,150,000 back in 05. From the zillow satellite, the house looks like a shack. I wonder why it sold for such a high price. And the buyers were real estate agents since I met them once.
One, it’s a 2-family.
Two, for your sake I hope they aren’t YOUR realtor, they have a $980,000 mortgage and are only collecting rent for one unit for a mere $1,500/month.
Four, this place HAS panoramic views of NYC.
What does this have to do with your place?
Your’s is a SFH with no views.
Do you understand the meaning of “comps” in real estate?
It’s RECENT sold units within in your neighborhood that are “COMPARABLE”.”
The house can’t have a view of the city. There is another house directly next door to it tht blocks about 95% of the views. How do you know it has panoramic views?
another GD reference.
http://www.nytimes.com/2007/06/14/business/14sec.html?ref=business
#179
Re: $900-$1000 per month/per child
you’re right! numbers like that are too big to want to think about.
that’s probably why so many parents are so panicky about their child being the best at something – whether it’s sports or academics, or basketweaving. they cling to the hope that their kid will have an edge and get a scholarship. no one wants their kid to be saddled with that kind of debt, but most people can’t put that kind of money away every month – on top of that 401K’s, IRA’s – we’d have to defer our whole life.
I agree with Jr paying for tuition.
I graduated Rutgers with 22k in federal loans in 99. I moved back to my parents apt after school and communicated to the city. My folks were nice enough not to charge me rent while I was repaying my loans.
Most of my friends were buying/leasing 35k cars or paying about 1k rent in Hoboken or NYC (it was a lot of for a 22 yr in 99). I learned to save and contribute to my 401k.
Repaying my loans taught me to responsiblities.
Another big thing was some of my friends could not find anything they thought were interesting or pay well enough. So they applied to grad schools (some of them even took a year off), I was thinking about the same thing……..My old man said, “You can pay any more, you have to take a loan for the whole thing” Obviously I didnt’ go to grad school.
A few of those went to grad school had better opportunites after grad school. Most of them were complaining the same thing after grad school.
CC
To give you an idea…..in 1987, my brother and I were concurrently in ivy-league schools. My mom was working as a secretary, we didn’t own a car, and we were renting a rent stabilized apartment in Flushing Queens. She paid out of pocket about $3,000 for the both of us that year [it nearly killed here]. I took a loan of about $2,000 and worked two jobs on campus.
I saw what was happening and completely busted my a55 in pure respect for her sacrifice, and received a 3.8 including an A+ in accounting.
“we’d have to defer our whole life.”
That’s it exactly. While I love my kids and want them to have opportunities, it can’t come at the expense of my retirement. There is nothing wrong with going to a state university and going to one won’t stop you from going to a top grad school.
Pooch 123, here’s my strategy for credit cards:
2% cash back from Citibank Dividend Card for groceries and drugstores (annual limit $300 is enough for us)
3% Citibank Professional Card for gas (we drive a LOT)
1.5% Fidelity card for everything else.
That’s a lot of cash back in a year that is used as ‘fun money’ on vacations.
Also, while Citibank had the 0% balance transfers with no fees, I used the money and placed it in their Citibank e-Savings account for 5%. You can bake your pie and eat it once in a while!
Fatwallet is an amazing site to sniff out deals for pricematching strategies, sales, etc.
“There is nothing wrong with going to a state university and going to one won’t stop you from going to a top grad school.”
I went to a top 25 law school and there were plenty of state school kids there, some of whom made it easily to law review and went onto the biggest firms. It’s all about the individual student.
I like how you guys value everyone’s privacy and post their mortgagae information for the whole world to see. Perhaps I should consider contacting NAR….
Wow, the $1000 stroller discussion got me thinking we haven’t had a $300 jeans broohaha in a while.
Maybe someone could help me find a pair, I had no luck checked out Nordstrom.com, Bergdorfgoodman.com, barneys.com and Bluefly.com. Most expensive I could find was $295.
Please share your stories of acquaintances who push around their $1000+ strollers in $300 jeans.
JM
Dreamtheaterr I’m gonna 1-up you. I dont want to hold many credit cards and don’t want to deal with multiple issuers. This is my strategy –
Citi’s mtvU card (its a student card, got it in my final year of law school) (5% back on restaurants, bookstores, movies, and amazon.com purchases)
Citi’s premierpass elite card (annual fee waived as citi private bank member, which I joined through my law firm) (4% back on groceries, gas, and pharmacy purchases and 2% back on everything else)
If I didn’t qualify for a fee waiver on the premierpass elite card I’d replace it with Citi’s drivers edge card, which is 6% back on groeries, gas, and pharmacy purchases and 1% back on everything else I believe…
Donald – their mortgage information is already publicly available. What difference does it make if it gets re-posted here?
[must resist urge to feed troll… aah.. cant control self… too late]
thanks for the great site. I will definitely check it out. I am pretty good at getting rebates but I can always be better!
As far as school goes, I like the 1/3 rule. We will put as much as we can reasonably afford for the kids (1 here and 2 on the way). This is after we max out 401K and secondary post tax retirement/stock account. You can always borrow for school but you can’t borrow for your retirement!
You got the mortgagae information fromt the MLS, which is not open to the public. I have the stadnard tax records in fornt of me and there is no mention of the mortgagae amount. And while you have all the info in front of you, where does it say that the house has a view? There is another house directly next to it (1 Lafayette Avenue)that has the good views and blocks the view from the realtors’ house
From MarketWatch:
Adjustable-rate mortgages going sour
It’s not just a subprime problem. It’s an adjustable-rate problem.
The mortgage bankers came out with their latest survey on mortgage delinquencies and foreclosures on Thursday, showing a small rise in the percentage of homeowners who are in the process of losing their homes because they aren’t paying the mortgage. At the end of the quarter, 1.28% of all loans were in the foreclosure process, up from 1.19% in the fourth quarter.
For those who have fixed-rate loans, or who passed the strict criteria to get a loan from the FHA or VA, foreclosure and delinquency rates actually fell. But those who took out adjustable-rate loans fell further behind.
Foreclosure rates for adjustable-rate mortgages, or ARMs, have doubled over the past two years. This is not just the subprime borrowers, those with less than stellar credit. Even prime borrowers who opted for ARMs are in trouble.
The foreclosure rate for subprime ARMs has gone from 5.1% to 10.1% in less than two years. The delinquency rate has soared from 10% to 15.75%.
For prime ARM borrowers, the foreclosure rate has doubled from 0.8% to 1.6% in just one year. The delinquency rate for prime ARMs jumped from 1.5% a year ago to 2.4% this year.
Prime ARMs include so-called Alt-A or toxic loans, which exploded in popularity in the past few years because they offer teaser rates, lax lending standards and the temporary option to pay less than required to pay down the loan.
#194 Alot of the privates, are not very good, and have zero name recognition, which right or wromg matters.
To pay 40k otr more a year to got o a second or thirs, or fourth tier private school is a complete waste of money.
I think we have had this discussion before on this board. If you ar going to pay the bucks, pay it on Grad/Law school, not on the standard BA/BBA.
Talk to the big name HR outfits, and the McKinseys etc. They will tell you the same thing.
I know some younger kids out of school a few years 140/150K in student loans, cause mom and dad wanted the sticker on the car, but did not want to pay for it.
That is the other thing mom and dad, unless you are paying the bills, do not encourage your kids to go somwehere that will entail them having crushing student loans.
#200 Any one can go down to the county court house, and help themselves to all the mortgage infromation they want. It is public record.
There are some states I believe that where for an additional filing fee, you can have some of the information made private, i.e the mortgage amount.
#197, Pooch very nice deal you have there!
I had the 5% back on gas, groceries, etc till Citibank cut it back to 2%. So I stick with it; no need to have another hard enquiry on my credit card in search of another deal…at least for now :)
What I also like about the Fidelity card is that I use it to pay off the balance due on both my Citibank credit cards before their due date. My statement date on the Fidelity card is just after the due dates on the Citibank cards, which gives me an additional 50 days of free float.
Donald Says:
June 14th, 2007 at 2:06 pm
I like how you guys value everyone’s privacy and post their mortgagae information for the whole world to see. Perhaps I should consider contacting NAR….
And apply for a job there too…. of Honorary Bagholder.
dreamtheaterr,
For the citi 5% card, did you use it for any transaction not in the 5% category??
Mine was cut down to 2% as well after my first $300 check. I only had 5% transactions in it.
My spouse have all types of transactions and Citi hasn’t cut it back yet. But she hasn’t received her first check yet?
Just curious. I want to max out on my cash back rewards.
CC
I could not agree more on the second and third tier private schools. I went to a top 25 school and it was very reasonable at the time (under 20K total for 1992) but now the costs have doubled based on that amount. I will of course pay whatever it takes if my children want to go there as my school holds a very special place in my heart. There are only a few other top schools that are worth the $$ (yes, Princeton is definitely one of them and is my second choice as far as schools go). If my kids end up being just mediocre students they are much better off going to a public school where they can still get a good education and do well. They can then parlay the great grades into a great grad school. One thing I learned post undergrad and grad, you can do ANYTHING you want so long as you have the drive and the grades from almost ANY school.
Jersey Home Builder goes under.
“Pennsylvania home builder Elliott Building Group Ltd. filed for Chapter 11 protection, the latest industry victim to succumb to declining sales caused by a cooling housing market.Elliott Building filed for Chapter 11 protection Sunday listing assets of more than $60 million and debts of $79 million. The Langhorne, Pa.-based developer builds homes in southeast Pennsylvania and southern New Jersey.”
Full article…
http://www.forbes.com/feeds/ap/2007/06/14/ap3821645.html
Re shopping for credit cards (to maximize rewards, of course) – if you’re in the market for a home mortgage, go credit card shopping after you’ve secured the mortgage. Your credit score takes a (minor) hit every time another party does a “hard pull” on your credit report, which a credit card issuer will probably do before issuing you a new card. And you want that FICO up as high as possible before mortgage shopping.
Mortgage rates took a big jump:
LOAN TYPE: 30 yr fixed mtg
TODAY: 6.39%
LAST WEEK: 6.12%
http://www.bankrate.com/brm/rate/mtg_home.asp
So let me get this straght JB, I am a “case study” for a seller facing a loss. That is interesting because I am not facing a loss. As I have said almost everyday, I will not sell for less than what I paid. PERIOD. Any “loss” I have is on paper.
Watch “Million Dollar Agents” to see parasites collect 6% of $10M properties for a few hours “work”:
http://tlc.discovery.com/beyond/player.html?bctid=156470892
After the above page loads, click “Video Search” and enter “Agents” to see all episodes listed, and viewable online.
#211 You are facing a loss if you plan on selling any time soon,as in the next few years. What is so difficult to fathom about that? You do not sell, no loss, sell loss, do not sell no loss, sell, loss. Get the picture?
Its just like all these poepl running around sayiong I made allt hsi money on my hosue, its my equity etc. etc. You have not made one dime until you sell it, close it, and put the cash in your pocket.
EQUITY IS NOT WEALTH.
Donald, even if you sold for exactly what you paid at bubble peak in 2005 (not likely), you will still take a $96,000 loss. I’ve spelled this out for you at least twice.
Opportunity costs, closing costs, and realtor costs are not “paper” losses, they’re a direct hit to your bottom line.
A better case study would be “starting over” since she was actually dumb enough to sell for a loss.
Opportunity costs should not even be factored in. That is the dumbest thing. I only consider realtor fess and closing costs.
Jersey4Life #158
Congratulations on your sale!
My kids and I spent about a month at the Summerfield Suites (Wyndham) in Bridgewater when my ex- and I first separated. You wouldn’t want to live the rest of your life there but they’re a good short-term option. Summerfield Suites is a chain so you can see if there is one near where you want to live.
The rooms were not cheap but were modern and clean, and adequately sized for a short-term stay. Our unit had 2 bedrooms, 2 full baths, a living room, kitchen and lots of closet space, relatively speaking. The kitchen was adequately equipped so that, most nights, we were able to cook something simple and relax together as a family. There was a hot breakfast buffet served in the “clubhouse” each morning, which was not fancy but a really nice amenity, and many nights, there was a light supper or appetizers at which my teenagers attempted to make back the money I was paying per night. The clientele was largely there for training sessions at one of the nearby drug companies; the next largest group was folks who had sold one house and were waiting to close on their buy (lots of overdue new construction.
The price drops substantially after you’ve stayed more than 30 days.
#206, I did not use it for any transactions not in the 5% category. I guess that’s why they cut it back!
startingover,
How much money did you lose after factoring in realtor fees, closing costs, renovations, and what you paid for the house in 2003?
“Opportunity costs should not even be factored in. That is the dumbest thing. I only consider realtor fess and closing costs.”
Donald, go back to Eco .501 (Eco 101 is far too advanced for you). What is opportunity cost? Hint: money isn’t free.
Donald – opportunity cost should be factored in, but so should the cost of renting an equivalent place.
dreamtheaterr Says:
June 14th, 2007 at 2:56 pm
#206, I did not use it for any transactions not in the 5% category. I guess that’s why they cut it back!
dreamtheaterr, I just checked Citi’s website. For the 5 or 6% cash back cards. It only lasted 6-12months with $300 max per year. After that it goes back to 2%.
CC
Please don’t feed the wildlife
NJGal, I think you mentioned you were expecting sometime in December this year. A little bonus is that you’ll get the $1000 Child tax credit when you file your taxes next year; IRS does not differentiate if your baby is born on 1/1 or 12/31 of the same year to avail of the credit.
Dream, it’s early November – let’s hope the kid is NOT going to wait until December to make her appearance! Finally, something I can use on my taxes for a deduction!
There’s got to be a baby onesie somewhere that says “Tax Deduction” or something like that:)
Donald–I haven’t had the heart to add it all up. Also, it would depend on how you figure in the “capital improvements” since you can’t expect to get alot of that stuff back 100% anyway.
Watching interest rates rise, I’m just glad to be done. I’ve survived investment loses in the market. This is no different.
I expect to make some of it up on the reduced price of whatever I buy–I’ve been out and about looking and been candid that I’ve sold (it usually comes up when I or my agent ask how fast the Seller can close), and the Seller’s brokers are ringing my agent like crazy, begging for offers and hinting at how soft the asking prices are. This is very strange–I’ve never before been in a situation where I had multiple choices to decide between and the time to ponder before someone else snaps the house up. Or been pursued as a Buyer this way.
Funny story: I saw a house last Saturday that I really liked but that has a few flaws that I have to figure out whether I can work around. (And there are other houses I like, too.) My agent told the Seller’s agent, who had to be there to show, of my interest. (And my kids were along, jabbering about how they want this one because it has a master downstairs and teenager-land upstairs, godhelpme.) The seller’s agent called on Monday, warning that there was another offer coming in and that I had to act fast. I responded that I couldn’t act fast so if it had to go to someone else, so be it. Remarkably, the other offer has never materialized and the Seller’s agent is all over my agent like white on rice.
I will be interested in seeing what happens when I make an offer (on this or some other house) at what I think is a market price since most of the places I’ve seen seem far overpriced. As you’ve pointed out, the comps show sales close to asking in the majority of the sales I’ve seen. But nearly all the closed sales went to contract before the big May slump. Very little is under contract in my area (sold in Hunterdon, looking in Somerset). I don’t know how many Sellers are successfully getting their prices and how many, like me, are taking less than they’d like because they need to move on with their lives. I can say that there are a frightening number of homes for sale that are empty or obviously not being lived in.
To end this, I am so relieved to be out from under that house–the carry, the maintenance, the long commute to my kids’ schools and my job–that I feel like I am walking on air. Most importantly, I will have the children settled before school starts in fall and that was THE MOST IMPORTANT FACTOR for me.
dreamtheaterr
Does the child tax credit phase out after $110K? Any idea when ti phases out completely? I could use an extra $2k next year.
I resist the temptation to respond to a stupid comment on ignoring opportunity costs.
UGGGHHHHHH
Yes… You do not get a child tax credit if your income is over 150K
Anti,
What more would you expect? He’s never owned a stock.
#227 Mike, spot on. Welcome to the land of progressive taxes….. there is phasing out of the credit above modified AGI of $110K filing joint.
Phaseout is complete (you get $0 credit) when AGI exceeds the applicable threshold by $20K per child. So if your AGI is above $150k, you get no credit.
“Yes… You do not get a child tax credit if your income is over 150K”
That really stinks. Oh well.
What other tax credits get phased out? Property right?
dreamtheaterr
That stinks for me, thanks for the great info. Don’t get me started on progressive taxes. Speaking of real estate, one thing that pisses me off considerably is that the supposed real estate tax credit that was just passed has phase outs again at income levels. I am slammed on that one as well. My taxes are expensive and I could use the extra $$ just like everyone else. That I think is not fair. Not trying to whine about it but if you are going to give a tax credit then give one and don’t phase it out as what I consider to be relatively low income levels. It ain’t cheap living in northern NJ.
“The seller’s agent called on Monday, warning that there was another offer coming in and that I had to act fast. I responded that I couldn’t act fast so if it had to go to someone else, so be it. Remarkably, the other offer has never materialized…”
I received the same sales-spin from a realtor just 2 weeks ago, that a house had one offer, and another coming in that night.
Lies.
This has happened several times previously, as well.
Weichert, Burgdorff, Prudential, etc, they’re all the same.
“My taxes are expensive and I could use the extra $$ just like everyone else. That I think is not fair. Not trying to whine about it but if you are going to give a tax credit then give one and don’t phase it out as what I consider to be relatively low income levels. It ain’t cheap living in northern NJ.”
So true Mike. It’s very easy to say someone making over 150K is really well to do in North Carolina, but that person is definitely NOT well to do in the tri-state area. I’m not sure they can really worry about regional cost of living issues with taxes, but there is a massive difference anywhere between someone making 150K and someone making 500K, no matter how you slice it.
#234 Unrealtor
I can deal with the “other offer” schtick pretty cool-ly. I’ve encountered that one every time I’ve bought since my first house in 1979. What gives me the willies are the ones who wink at me (actually or figuratively) and tell me not to worry about the asking price but to offer what I want because the Seller is desperate and hasn’t had an offer. That id just SO sleezy! (Plus I can’t help wondering whether my selling agent sold me out the same way.)
For those interested, the website DinkyTown has a cool bunch of calculators with inetractive graphs. You can also print out the results in tables.
Calculators included are for Mortgage, Loans, Credit Cards & Debt, Auto, Investment, Retirement Savings & Planning, Tax, Savings, Personal Finance, and Insurance.
Here’s the link
dreamtheater/chaoticchild,
How do you go about claiming rebates from Citicard? I know Chase and Discover have features on their website where you can claim a rebate. Does Citicard only send a check after you’ve accumulated $300 in rebates?
Speaking of taxes;
Accounts Receivable Tax, Building Permit Tax, CDL license Tax, Cigarette Tax, Corporate Income Tax, Dog License Tax, Federal Income Tax, Federal Unemployment Tax (FUTA),Fishing License Tax, Food License Tax, Fuel permit tax, Federal Gasoline Taxes, State Gasoline Taxes, Hunting License Tax, Inheritance Tax, Interest expense, Inventory tax, IRS Interest Charges & IRS Penalties (tax on top of tax), Liquor Tax, Luxury Taxes, Marriage License Tax, Medicare Tax, Property Tax, Real Estate Tax, Service charge taxes, Social Security Tax, And tax on Social Security Benefits, Road usage taxes, Highway taxes, Sales Taxes, Personal Property Taxes, Use Taxes, Recreational Vehicle Tax, School Tax, State Income Tax, Unemployment Tax (SUTA), Telephone federal excise tax, Telephone federal universal service fee tax, Telephone federal, state and local surcharge taxes, Telephone minimum usage surcharge tax, Telephone recurring and non-recurring charges tax, Telephone state and local tax, Telephone usage charge tax, Utility Taxes, Vehicle License Registration Tax, Vehicle Sales Tax, Watercraft registration Tax, Well Permit Tax, Workers Compensation Tax. \
Hey rich guy get rid of the car if you live in JC and save a $1,000 a year in insurance plus repairs and sublet your spot for $200 a month then switch jobs to a place that gives you a transist check to get rid of your commute and stop eating soo much, $500 for two people!!!ALso what do you need ac for and if you don’t do anything anyhow get rid of the phone, little known secret old fashioned phones plug into wall let you call 911 and 800 numbers for free so you a net to phone calling card. Then at least put into your 401K to get the match
rmb Says:
June 14th, 2007 at 10:43 am
For 2 of those years we lived with parents.. Then we bought ..
Commute for Both of us from JC was $120 a month , $500 on groceries month. No parking fees we owned the spot. Our mortgage was $900 including taxes. No Cable. No Cell phones. No Computer, Basic phone service $30. gas/Electric maybe $30-50 dollars a month ($80 in the summer for AC). Never needed to turn on the heat it seemed everyone around us had it on 80.Insurance was 1000 a year. We didn’t give to 401K for 5 years. We put whatever we saved in stocks.
Mortgage +taxes-$900
Phone $30
Gas Electric $65
Insurance car $83
Groceries $500
Commute $120
Spending for the two of us $200
__________________
$1898 * 12= 22,776
We never really used the car.. We just didn’t go anywhere
And yes within those 5 years he got a 10K raise. I got a 5K raise. After that we were able to move into our own place.
NJGal –
I’m going to jump into the whole stroller/crib/baby stuff conversation here as I am just finishing up suburban stay at home momship of 6 years.
1. In suburbia you almost never use the stoller, you drive everywhere and they are a pain in the butt if they are too big and heavy to take in and out of the car. Every mom on her second kid (once you get over having “stuff”) cuts down dramatically.
I would recommend getting a Snap and Go for when the baby is little. The baby tends to sleep in the car seat and when you get out, you just take out the seat (with the baby) and put it on the frame, nice and easy and the baby isn’t disturbed. Not cool, not fancy but very practical and kid and parent friendly.
When the child is older, a good solid umbrella like the McLaren is great, they are light, fold up small and are easy to fold and open – just what you need when it is raining and you are trying to get a kid, stroller and shopping bags into the care as quickly as you can.
I also recomment the Baby Bjorn or Maya wrap, both of which I used religiously when my kids were tiny, although they can get a bit sweaty in the summer, and they grow out of pretty quickly.
As for co-sleeper. Just more stuff. We found it more efficient to take a side off of the crib and attach it to our bed – a 2 in 1 co-sleeper.
It’s great your mom and MIL want to buy you stuff, but the down side is that it is just a ton of stuff that will lay around gathering dust and getting trodden on or tripping you up.
That is true. However I think the property tax rebates phase out at $250K here, which I again think is way too low. I can see phasing them out at $500K, but $250K combined is reached way too often in NJ and that wipes out a good portion of northern NJ’s homewoners. How are they not deserving of the full 20% just like the guy a couple of towns away? Does anyone honestly think that this is a level that makes you magically not care about $$? I can tell you that is absolutely not the case.
I will cease my rant now.
John,
Your a few hours too late to criticize me.. X53 beat you to it and I am done with the bashing for today.
#242 Mike: I do not about all of north Jersey, but in prestigious minuted from NYC Bergen county, over 70% of all homewoners makes 100K or less a year.
So this so called tax reform was structured to appear to appeal to the majority of people.
WOW – My Mom charge all four kids rent during college and after college, did not pay a dime for any of our colleges and did not allow us to take student loans, all four of us have masters degrees, my wife worked 40 hours a week full time and went to school full time and did same thing. You folks are not being nice, no one over 18 should live for free they should start charging you rent and teach you about money.
ChaoticChild Says:
June 14th, 2007 at 1:53 pm
I agree with Jr paying for tuition.
I graduated Rutgers with 22k in federal loans in 99. I moved back to my parents apt after school and communicated to the city. My folks were nice enough not to charge me rent while I was repaying my loans.
Any comment on the Starwood AmEx – we’ve been using it for years and seem to make a killing with it.
Probably the #1 scam was 2 of us flying to Paris in 2002, staying a week at the Prince de Galles for 5 days and getting an upgrade at the hotel. We only paid for meals and activities.
We went at the apex of the USD/EUR exchange rate for Americans, also, Starwood has tightened us stuff in the last 18 months. Still.
This was the place….
http://www.starwoodhotels.com/preferredguest/property/overview/index.html?propertyID=250
#238, AC
I think Citibank has different policies for different cards. Usually, once you accumulate $50, you can ask for a rebate check.
Thanks Lisoosh, I am starting to think the same thing about the stroller. Why bother, you know? I think I will get one like the McLaren for later, and I can get a base for the infant car seat – how often are babies under 6 mos. old in a stroller anyway, especially in the winter, right? I did register for the Bjorn, mostly for the hubby, because I bought myself a funky sling – although I guarantee I will use the Bjorn more as I hear it’s great.
Mom already bought the co-sleeper, which I do plan to use because I think the crib I want is just too big to be practical in our bedroom (big old sleigh crib). I only plan to co-sleep for a little while so it is a little wasteful, but it’s done so that’s that. Paring down for the rest of it though – that’s the goal.
#244
You may be correct but it sure does not feel that way. My only gripe would be they guy who owns the $500K house with 10K in taxes making less than $100K. Then there is the person who does not qualify for any credit even though he wons the similar house next door with the same taxes. What does any of this have to do with your income? It should be based on taxes alone. Why should the person who makes most be penalized when he bought the same house as the guy next door? That is what stumps me?
Chifi
the conventional wisdom (on fatwallet.com and flyertalk.com) is that the starwood amex used to be a good deal, in that you cuold get at least 1.25% back, depending on how you cashed in your rewards. But with the recent devaluation and its carrying an annual fee, albeit a low one, it doesnt stand out as a good deal so much anymore.
If you’re interested in credit cards that give you good travel rewards, there’s an interesting fatwallet thread on the subject
http://tinyurl.com/2vlevf
#248 NJGal, if I may, here’s a dad’s opinion who has a 17 month daughter (she was born Dec 05) so we went through the winter thingy.
Initially, your baby will hardly be out of the house. All you will care about is protecting her by keeping her at home, especially the winter. A stroller will hardly be put to much use initially, so do yourself a favor and get the stroller that you can just add the infant seat to. She’ll grow out of the infant seat in no time. Take that time to try out a few strollers; don’t go by what anyone says since every Mom’s needs are different. For example, certain tall women (like my wife) was always kicking the back wheels of certain strollers with excellent reviews.
You want a light, yet durable stroller that you can open/close with one hand and throw into the trunk while holding the baby in the other hand!
We eventually went with a Zooper stroller for every day suburban use, and have a McLaren for the occasional trip into NYC.
NJGal-
Less is definitely more. You might find you co-sleep longer than you think, depending on the child. My first was a rotten sleeper, the only thing I could do was to nurse her to sleep – a thousand times easier than anything else. It also helps with night time feeds as you don’t really wake up to feed them, just roll over half awake, a definite life saver.
Best advice I can give – just buy things when you find you need them, its amazing how useless most stuff is. I got a pack and play that turned into a giant toy chest, a big high chair that was a liability (it stuck out too far in the dining room and everyone tripped over it), a stoller rain cover that was used ONCE for a grand total of 15 seconds and a diaper bag I quickly traded in for a compact backpack. Best fun I had was giving all that cr@p away.
Gates are good though, and good quality ones are a must and a life saver. A good car seat too. The little ones are great when they are babies because you can just lift the whole thing out, but there are some nice larger ones. I later got the Cosco 3-in1 that goes from rear facing up to 35lbs, and then forward facing up to 45lbs (and has a good 5 point harness that fits taller kids) and then a booster, making it really practical.
“A stroller will hardly be put to much use initially, so do yourself a favor and get the stroller that you can just add the infant seat to. She’ll grow out of the infant seat in no time.”
Well, see, a friend told me to register for both the infant seat and the regular car seat for just that reason (I know I am registering for a lot but I have a HUGE family and lots of friends coming to the shower – probably about 70 folk in all).
I know people are bugaboo haters (and sometimes I suspect only b/c of the cost and the fact that so many people buy them thinking they are too cool for school) but you CAN attach the infant seat to the base of the bugaboo, so there’s that feature. Plus one thing I like as a tall woman is the fact that the handles are adjustable. Also, I am moving to a place without sidewalks, and since I do like to walk, the tough wheels it offers would be good for the “off roading.” I also think I’ll use it (and abuse it) since my girlfriend a few blocks away is having a baby soon and I’m sure we’ll be walking together a lot by next spring and summer. Plus, it is a quality stroller that I plan to use for the next kid (buying a neutral color in case).
Believe me, I realize that expensive does not always equal good, but even though folks hate on it (and I can understand some of those reasons) it is highly rated and a lot of people like it. NOt saying I will still for sure get it, but I am going to take all the positives into account too. Besides, I’m no weakling. I can lift my 80 lb dog. I can handle a stroller!
I don’t want to get into politics, but there is a very interesting article in today WSJ editorial section. Talking about how democrats want to raise taxes to those making over $250K to get rid of the AMT for those making $150K – $250K/year. And if they don’t renew Bush’s tax cuts, then marginal rates for some people could be greater than 100%! This comes during a time when the Federal government tax rolls are increasing nicely. How about slashing some of the spending!!!
Lisoosh, the pack and play was one thing I know is a little silly, but I hear it’s useful for not going up and down the stairs. Now, do I need a swing AND a bouncer?
High chair – was going for the Graco, again the top rated model (not the most expensive – under $100). I can’t register for the pattern I want but my sister is buying it.
Also, I have to consider that for the most part, it will be my younger and stronger nanny doing a lot of this stuff.
The AMT is already bad enough. Boy did I get slammed the last few years when I wrote off my MBA. I thought I was clear but it got me big time. If that plan gets passed by the Democrats I may just have to go back to the Republicans!
241 – lisoosh –
“as I am just finishing up suburban stay at home momship of 6 years.”
are you saying that you are going back to work after being a stay at home mom for 6 years? did you have a hard time reentering the workforce after being out?
ChiFi-
Here’s what I don’t get in the 529/Coverdell/Educational IRA discussions: why are people throwing money at these before they’ve maxed-out their retirement?
Even talking heads like Suze Orman will tell you to max your retirement before beginning to save for your kids’ college. You only get one shot to fund your senior years…there are many ways to pay for a kid’s education (including having the kid take on part of it himself!). It also occurs to me that in 15-20 years, many fewer people will attend a traditional “college”…AND the definition of “college material” is going to drastically change. What happens when Little Johnny wants to take trade school classes over the Internet, rather than go to Harvard? Don’t laugh; many top-skilled tradesmen now make more than doctors and lawyers. Expect that trend to intensify in coming years.
Top all this off with the fact that most of these educational savings vehicles (as mentioned earlier) are: a) run with the primary purpose being risk reduction for the manager, and b) the unintended blowback of the very real possibility that amassing large amounts in these vehicles will significantly lessen a child’s ability to obtain other forms of financial aid at application time.
Am I nuts here? What am I missing?
252-
NJ Gal, I agree with lisooh completely on the Baby Bjorn, stroller, gate and cosleeping recos. We also used play-yard gate that we found on onestepahead.com that was super useful. We had done away with coffee and side tables so when my daughter was learning to walk, the play-yard was great at keeping her away from unsafe wires, etc. and gave her something to hold on to while she learned to walk.
http://www.onestepahead.com/catalog/product.jsp?productId=6193&parentCategoryId=85184&categoryId=85223
We also chose not to have a shower and just picked up these items as the need popped up.
good luck – afe
I don’t disagree at all. like someone said, to be able to afford a top private institution you need to give $1000 a month per child for 18 years. I am giving 1/4 – 1/2 of that per child and the rest goes to post tax retirement as we already max out our pretax options. If I can get all of 1/2 of the expected costs of my children’s tuition by the time they hit college age then I will be very happy. As time goes on I can see the 529’s opening up to alternative forms of schooling.
Why do you think there is a lacrosse stick, a soccer ball, and a baseball and football in our garage. My hopes are that my son grows up to be the D1 weak side linebacker that I know he can be but since he is only 3 I will cover my bases half way.
“We also chose not to have a shower and just picked up these items as the need popped up.”
What, and give Grandma a heart attack? My family would not know what to do with themselves, and I’d get a ton of stuff anyway – at least with a shower I can get some of the stuff I need (along with all the crap they’ll buy that I totally don’t!)
#258 clotpoll –
i think what your missing is a certain sense of guilt at the thought that your child has to have massive loans.
it’s sort of an emotional thing that you’d hate to see your child straddled with a giantic debt before they even start out in life. yet, the flip side is that if you don’t save for retirement, then they will be straddled with you! my guess is they would prefer the debt.
Mike (260)-
Left-handed relief pitcher is the best meal ticket going. Franco, Orosco, etc…you can ply that trade ’til you’re 67 years old.
You got that…forget college! Straight to the majors.
clotpoll, great Idea! I will get right on it. I may need to switch him to a leftie though.
tcm (262)-
I came out of my education with about 40K in debt. I paid it off. My parents could’ve footed the whole bill, but they wouldn’t. They had some sense that I might value the whole process more if I had some hand in actually paying for it. They were right.
Organizing myself enough to retire this debt didn’t traumatize me, nor did I have to work 18-hour days at some agonizing hellhole to get it done.
To me, “saddling a child with debt” entails more than merely insisting that kids take an active part in financing their own educations. I know- and have known- many people who have had their lives ruined by their parents’ businesses going belly-up, alcoholism, or reaching a point of physical incapacity with no savings or insurance.
Why do I want to fund my kids’ college…at the risk of my future circumstances becoming so dire that I wreck their lives at a later date?
http://www.buybankhomes.com/Default.asp?_URL_=/PropSearch/PropResults.asp
HEHEHEHEHEHEHE
BLEED’EM DRY……….
BOOOOOOOOOOOOOOYAAAAAAAAAAAAA
Bob
Mike (264)-
Super-Glue his right arm to his ribcage.
For about six years.
#265 clotpoll –
i don’t disagree – that’s why i said i think they’d rather have the debt than be straddled with parents (ie – parents don’t have enough to live on)
-“the flip side is that if you don’t save for retirement, then they will be straddled with you! my guess is they would prefer the debt.” (“you” = collective you, not you personally)
Re #258
If you invest in a 529 there are ways to avoid any impact on the student’s eligibility for federal financial aid. As of last year the Department of Education changed the rules so that the value of a 529 account is treated as an asset of the owner of the plan, not the beneficiary. So, Grandma and Grandpa can open an account for Junior, and the money in the account does not have to be reported anywhere on the student’s FAFSA (Free Application for Federal Student Aid). However, if Mom & Dad own the account they would report it as their asset, which would likely reduce the student’s eligibility for aid.
The one beneficial twist to this new rule is a dependent student does NOT have to report the account as an asset if they own it. So, you can put money in a 529 account with Junior as owner and beneficiary and he does not have to report it on the FAFSA. Of course, because he is the owner he could cash it out at 18, take the withdrawal penalty, and never go to college.
I just thought I would share this info with those who plan to invest in a 529. I work in financial aid at a university.
AK
Clot/Mike,
Learn to throw the knuckler. You can pitch into your 50’s.
#257 tcm
Yes, I am starting to look at getting back into the workforce after 6 years out of it.
I am starting up my own business but also looking for something part time in order to fund the initial start up and get myself back into the swing of things.
I’m dreading the whole process to be honest. My degree is in research science (totally useless now) and my experience in sales, which sound great for finding something part time, but in my experience tends to involve giving 120% every day, body and soul, which just isn’t on the cards.
I don’t even want to think about interviewing ” And what exactly have you been doing these past 6 years?”.
BC (270)-
A la Wilbur Wood.
http://newjersey.craigslist.org/search/zip?query=baby&minAsk=min&maxAsk=max
Here is your best baby stuff for free on Craig’s List in NJ – who needs new the recession is coming.
Skip the 529 and wait till you are almost 50 to have kids that way you will be dead by college and the kids get a free ride!!!!
lisoosh, you don’t know me at all, but let’s pretend some folks on this blog have some background in interviewing and recruiting techniques.
Don’t go for the big job right off. Apply and interview for ten or twenty jobs that sound like they pay nothing and you could do the jobs in your sleep. Then take the one that where you felt good in the interview. Once you’re back in, make the job into something. [Quit at any time you are are ready.]
Build your confidence there. If you like it, and it pays what you need stay. But all the time, remember what you are capable of and willing to risk. When you are ready, after one or two years, apply for other jobs. Not the next level up, but two levels up.
NJGal: best advice I can give……keep all receipts!!!!!!!!!!!!!!!!!!!!!!!!! I’ve never returned so much crap in my life, including to the supermarket.
To the extent possible, don’t throw out packaging until you know for a fact that you are going to keep a specific item.
Also, if you are going to order an items from a store that will require you to wait for shipment, make sure it is a large well established retailer [such as Buy Buy Baby]. Independent shops have a funny way of -going out of business- and taking your deposit along the way.
Clotpoll Says:
June 14th, 2007 at 4:52 pm
Top all this off with the fact that most of these educational savings vehicles (as mentioned earlier) are: a) run with the primary purpose being risk reduction for the manager, and b) the unintended blowback of the very real possibility that amassing large amounts in these vehicles will significantly lessen a child’s ability to obtain other forms of financial aid at application time.
clot: if you have the means to buy a house in NJ [ostensibly the motive for most of our participation here] you will get the “goose egg” in terms of financial aid, so effectively the “how it counts” issue is rendered irrelevent. That said, a 529 in the grandparents name is optimal. 529 is nice because even if child #1 turns out to be Reech, you can still change the bene to child #2 Mr. Duck. Also, even though we hope Mr. Duck is sterile, once we realize that Mr. Duck suffers from a two digit IQ, we can change the bene to Mr. Duck’s adopted Einstein. The flexibility to change what is generally an irrevocable election is of paramount importance.
In terms of saving for retirement, that’s a fair comment. However, general the argument comes down to weighing the cost of the extra flat screen TVs for the bathrooms and the sun porch versus adding to little Johnny’s college fund. Usually the money is there, but the motivation to have the new SUV – the GM Earthphucker – is too great…..
WSJ Evening WRAP
Mortgage Morass
By TIM ANNETT
If investors were beginning to believe that the worst of the subprime-mortgage fiasco was in the rearview mirror, a flurry of developments today gave them good reason to think again.
The weakening housing market this year finally yanked the carpet out from under buyers with flimsy credit and banks that took a “no paperwork? no problem!” approach to loans at the peak of the housing boom. Numerous lenders have been forced to shut their doors, and more borrowers are missing payments. The Mortgage Bankers Association reported today that the percentage of adjustable-rate subprime home loans 30 days or more overdue advanced to 15.75% during the first quarter, the loftiest rate on record. And the pain is only expected to get worse. Many subprime borrowers were handed low teaser rates when they first purchased their homes, but many of those mortgages are soon to reset to higher interest rates, and Federal Reserve Chairman Ben Bernanke said last week that further increases in delinquencies and foreclosures should be expected. The big selloff in the bond market recently could speed that process. Worried about the prospect of higher interest rates, investors have been kicking yields higher, and that is filtering through to mortgage rates, and fast. Freddie Mac reported today that the average rate on a traditional, 30-year fixed mortgage spurted to 6.74% last week, the highest since last July. If borrowers can’t keep up with the resets, the housing market may see inventories fatten at a time when builders are trying to pare back their stockpiles. The Mortgage Bankers data showed foreclosures on adjustable-rate mortgages have doubled over the past two years.
Suffering borrowers aren’t alone. Giant Wall Street banks that pumped billions into subprime loans are also getting creamed. Following an impressive streak of blockbuster profits, Goldman Sachs Group’s profits pancaked during its second quarter, and subprimes were partially to blame. Like its foes, Goldman grabs up mortgages of all kinds and bundles them into securities. The company was also a lender to some failed subprime shops. Goldman Finance Chief David Viniar said the firm faced tough comparisons with a year ago, but was frank about the outlook on subprimes. “I continue to believe we have not seen the bottom in the subprime market,” he said. “There will be more pain felt by people.” Goldman rival Bear Stearns was also smacked down by subprimes. Its earnings declined 33%, reflecting a previously announced charge related to its Big Board market-making business. But the bank also reported that its fixed-income revenue fell 21% amid “challenging market conditions in the subprime and Alt-A mortgage sectors.” Bear Stearns is a huge underwriter of mortgage bonds, and many observers surmised that if toxic loans were to sicken Wall Street, they would be among the first to exhibit symptoms. Bear’s stock managed to recover from an early beating to climb slightly, while Goldman shares dropped by more than 3%. Adding to the parade of mortgage-related earnings problems, Freddie Mac said it swung to a quarterly loss.
Amid all that trouble, the Fed has been under pressure from lawmakers of both parties to quash abusive lending practices. Rep. Barney Frank, the chairman of the House financial services panel, warned yesterday that he’s tired of waiting for the Fed to tighten the controls. “With respect to your rulemaking authority — use it or lose it,” Mr. Frank advised. Under the Truth In Lending Act, the Fed alone has authority to prohibit certain mortgage-lending practices for the entire industry. At a Fed hearing today, governor Randall Kroszner, who had been on the receiving end of Mr. Frank’s harangue, said regulators “must determine how we can help to weed out abuses while also preserving incentives for responsible lending.” A number of options are on the table, like limiting so-called liar loans and preventing lenders from slapping borrowers with penalties for making early payments. And almost all seemed to agree that improvements are needed in the manner that loan terms are explained to borrowers, as current disclosure forms are often opaque. “No one’s reading them,” sighed one mortgage executive.
lisoosh Says:
June 14th, 2007 at 5:41 pm
#257 tcm
I’m dreading the whole process to be honest. My degree is in research science (totally useless now) and my experience in sales, which sound great for finding something part time, but in my experience tends to involve giving 120% every day, body and soul, which just isn’t on the cards.
I don’t even want to think about interviewing ” And what exactly have you been doing these past 6 years?”.
l: most employers are far more open-minded today…they have to be….also, you have to remember that there is a huge stigma in the workplace for people under about 28. I know for a fact at my firm that when our operation manager retires, our idea of a perfect replacement would be a mom returning to the work force that appreciated a 9-3 schedule and also the opporunity to work. This contrast sharply to some tatooed, pierced, clownshow that can’t perform independently with it being spoon fed.
Don’t highlight the job gap, but be up front and PROUD of it. It takes tremendous organization, multitasking and drive to do what you did for the last six years. DON’T SELL YOURSELF SHORT!
NJGal – I have 3 kids, and I must agree with the others re:stroller in the suburbs. Get the snap n go for the infant stage, and then get a lightweight folding stroller. For what it’s worth, I HATE Maclarens. They tip backward the minute you try and hang anything on the back (I had a Quest). I much prefer the Inglesina brand of light strollers (Swift, Espresso). But the best in my book is the Combi single. 100 bucks and you can use it from newborn onward. Tell grandma to spend the money on classes (ballet, swimming, etc) instead. Those can add up.
Regarding college, I will buy property in other states and have my kids establish residency there to send them to whatever state school they wish. No way am I going to pay over half a mil for a BA when grad school is what counts these days. If they get scholarships, that’s different of course.
preaching to the choir. incestuous with little impact on those you’re hoping will succumb to your logic. you guys have lots in common with born again christians.
I give alot of credit to stay at home Mom’s Lisoosh. In my opinion, sometimes staying home with the baby is harder than going to work.. Not to mention everything in between.
Nj Gal,
Never really used my stroller to be honest. It went so fast. And my bugger won’t even sit in one now and she is 2.. she wants to walk and if we try to get her in she makes such a scene..
One of the best builder CEO quotes yet..
From Reuters:
Home builders pare down to weather storm
There is no good news for some the largest home building companies in the United States.
“We do think if you’re dumb enough to buy a home builder (share), you ought to buy us,” Ryland Group Inc.(RYL.N: Quote, Profile, Research) Chairman and Chief Executive Officer R. Chad Dreier, told an investor audience at the JP Morgan Basics and Industrials Conference this week.
Against a backdrop of plunging sales and rising contract cancellations, there was little talk of a turnaround or a bottoming out of the housing market.
…
Most U.S. home builders have taken defensive positions looking to generate cash. They have also been selling unsold homes, land positions, paring debt, laying off employees and cutting prices to generate sales.
James Bednar Says:
June 14th, 2007 at 6:34 pm
One of the best builder CEO quotes yet..
so good
Richard Says:
June 14th, 2007 at 6:30 pm
preaching to the choir. incestuous with little impact on those you’re hoping will succumb to your logic. you guys have lots in common with born again christians.
Reech: Hindsight is 20-20, but I swear on my son’s diaper pail, if someone had asked me who on this website would bring up “incest” first, I really would have said you. Seriously. I swear it.
BC Bob Says:
June 14th, 2007 at 5:30 pm
Clot/Mike, Learn to throw the knuckler. You can pitch into your 50’s.
All: Learn to be blonde and a stripper. You can receive free air travel to international destinations from Iowa on a Gulfstream Jet, and will be given credit for the Yankees 9 game winning streak.
#254 Debtvulture says:
“How about slashing some of the spending!!!”
I have always been republican since they traditionally had a better record on fiscal restraint. Unfortunately Mr Bush and his neo-con sponsors have gone on a massive borrow and spend spree in the name of national security etc. If both parties are going to spend recklessly I would rather we be taxed for it rather than borrow and make our future generation’s pay the price in higher interest rates and income taxes.
From [277]
“The Mortgage Bankers Association reported today that the percentage of adjustable-rate subprime home loans 30 days or more overdue advanced to 15.75% during the first quarter, the loftiest rate on record”
Loftiest rate ever? There’s that word [ever] again.
#278
chicagofinance Says:
June 14th, 2007 at 6:12 pm
“l: most employers are far more open-minded today…they have to be….”
gosh, i hope you are right, but i fear you’re wrong. as a person in a very similar situation to lisoosh, i hear the rhetoric, but don’t see much action. but, i’m working at it, and i’ll remain hopeful.
I hear what people are saying re: teaching your kids the value of money and all, but personally I think this can be accomplished without having your kids be crushed by massive student loan debt. Setting realistic goals, e.g., contribute $5,000 per year is constructive. Asking an 18 yr old to come up with $150,000 in my opinion is too much.
As for the private/public school debate– yes there are lots of people who didn’t go to top shelf schools who are very successful. However, there is a real network in place among alumni of certain schools, and going to these schools really does matter in terms of access to high paying jobs. I agree that there are plenty of third rate private schools that charge as much as Harvard, but in some cases, you really do get what you pay for.
sshh !! Richard:
Here is a tip for you. Don’t tell anyone else about it.
http://newjersey.craigslist.org/rfs/337646889.html
Richard, if you fail to succumb to fact-based logic, does that mean by default that you’ve succumbed to emotion?
Skep (289) – I hear what you are saying, but that’s quite a gamble, don’t you think? I mean, I want my kids to do something that makes them happy and hopefully enough money to raise a family. I am living the rat race life, and wouldn’t wish this on my worst enemy. I firmly believe that for 95% of non-rate-race jobs, the network created by hard work in college resulting in strong recommendations by professors is better than a phone call to Firm BigCo from someone who doesn’t even know student X but shares the same alma mater. And now that standardized scores are King, LSAT, MCAT, etc scores hold the most weight. As I said previously, grad school, law school, business school is where the wheat is separated from the chaff, given that everyone and their nanny has a BA these days.
PB-
the fact that seemingly everyone has a BA or BS is why the name of the school is often the deciding factor. Obviously, the Ivies don’t have a lock on all of the smart, hardworking people in the world, but they are a decent proxy and perhaps more importantly, clients are impressed when they see that most of your staff went to Harvard, Princeton, MIT, etc. Not to mention that there is just some real old school snobbery that remains heavily in place in certain industries (e.g., banking). Again, I’m not saying it’s 100% necessary, but we all know that the world is increasingly competitive, and for better or worse, these things do actually make a difference.
Rutgers graduate here. My alumni connections are non-existent. I’ve even had one azzwipe interview me who, upon hearing I was from RU, assured he that he wouldn’t hold that against me. Being the dumb RU grad that I am, I worked for him anyway.
Skep-tic – right, and this would be 100% true were it not for the fact that almost anyone in an advanced field needs a graduate/professional degree now. I agree with you re: banking, but I have a lot of friends making big bucks (those famed wall st millions) in banking who went to no-name schools and had killer scores and went to Wharton, Harvard, etc for their MBA. I guess for me the options are: 1) sacrifice a hell of a lot during their childhoods (no/few vacations, camps, etc) for the potential influence a Harvard education might have for my kids should they choose banking; or 2) live a little while they grow up, invest some $ in their childhoods, and pay for state school and help significantly with grad school to prevent major loan burden when starting out.
Additionally, I have my marriage to think about. When people work bigtime hours (70-90 hrs a week), they need to invest $ in the marriage. Babysitters cost money, but they are invaluable in the role they play in marriage maintenance. I think a healthy marriage is a better “gift” to my kids than a Harvard BA.
I’d love to be able to provide *everything*, but if I had unlimited funds, I probably wouldn’t be on this site, caring about what the RE market is doing. I’d just drop a couple mil on a house and have done with it.
Possible (280)-
Gonna take more than property out-of-state deeded in your kids’ names to get them residency.
State universities will check you like the Stasi before granting in-state tuition. My secretary is going thru that now; she just got a NJ drivers’ license & her son lives in Florida with Grandma. He hasn’t left Fla since 9th grade, but he just got rejected for in-state tuition there because of Mom’s NJ address.
Clot – I’ve done some research on the issue. It differs by state, but usually 6-12 months independent residency fits the bill (I’m thinking of U Michigan, etc). This may mean some advanced planning. They may actually have to (gasp) work for a year before attending college.
Your secretary may be having a problem because she is still her son’s legal guardian. I am thinking of my children establishing residency as adults.
Clot,
Back during march madness you were touting the exciting NBA. Is this all the best athletes in the world have to offer? I did not realize that subprime was joined at the hip with the NBA. C-Span must be receiving better ratings.
I was looking for this before…let me investigate
Lehman to Combine Mortgage Units
NEW YORK — Lehman Brothers Holdings Inc. is combining its U.S. residential-mortgage businesses.
The investment bank, which packages mortgages into securities for sale to investors, will merge its BNC Mortgage, which arranges subprime loans through independent brokers, into Aurora Loan Services, which arranges “Alt-A” loans to borrowers who generally have higher credit scores but insufficient documentation for prime-rate loans.
The move comes amid a wave of delinquencies and defaults by subprime borrowers that has sent several mortgage companies into bankruptcy proceedings and hurt a swath of businesses from homebuilders to investment banks holding the loans.
About 400 BNC jobs will be cut in the reorganization, or about 24% of BNC’s work force, said Thomas Wind, head of Americas residential lending, according to American Banker, which reported the planned layoffs yesterday.
BNC is in Irvine [SoCal]
NJGal, #225 – There is, in fact, a onsie that says “Tax Deduction”. My sister got one at her shower…
Pat – Thanks for the advice; Chi, thanks for the heads up; rmb, yes, it is tough but mostly in a mind numbing, deal with endless repitition and lack of sleep kind of way.
tcm – I get ya. I worked in a mostly male heavy duty bullpen before I went out, and that environment was definitely NOT flexible, but maybe it was just that particular company.
On the plus side, if (I should say when) my business takes off, I have a huge pool of smart, able potential employees available as long as I am willing to be flexible with hours and locations :-).
…the foreclosure crisis is limited to certain areas.
“The bulk of the country is not in this circumstance,” says MBA Chief Economist Douglas Duncan. And the bulk of the mortgage market, he says, is “very healthy.” The MBA attributes most of the first-quarter increase in foreclosure starts to a boost in activity in California, Florida, Arizona, and Nevada. “Without these four states, foreclosure starts would have declined,” Duncan predicts. In fact, 24 U.S. states saw a decline in foreclosure starts, while the rest of the states saw what the MBA describes as “negligible” increases.
…
But even with the first-quarter decrease in delinquencies, the MBA expects to see a “modest increase” in late payments over the next two quarters, with an increase in foreclosures on a lag. The association expects the housing market to recover in late 2007.
http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070614_838245.htm?chan=top+news_top+news+index_businessweek+exclusives
Possible (298)-
I tried that myself in NC many moons ago. Didn’t work.
These schools are not interested in charging you less. They establish a massive burden-of-proof on the applicant.
I know a lot of people, including my brother, for whom it did work. I am not trying to trick anyone. Residency is residency. I am prepared to meet the burden of proof outlined by the schools themselves. People move to different states for a variety of reasons. New job vs education. One is not less valid than another. Like I said, I’m not going into anything without first doing adequate due diligence. With 3-4 kids, I’ve got potentially millions at stake.
Clot,
Halftime, 39-34. I’d rather watch Pitt-UCLA. If I can’t locate that, there’s always Flutie to Phelan.
BC (299)-
Didja watch Mavs-Warriors? That didn’t suck.
The NBA should seed 1-16, no conferences, for the playoffs. Perhaps give the conference champ with the lesser record the #2 seed. If that had happened this year, SA, Phoenix, Dallas and Detroit couldn’t have played until the semifinal round. It would also help to make each playoff round a 2-3-2 format…lots less travel.
The players don’t stink; it’s the playoff format.
And, a much worse problem is the tank-a-rama in years when the draft is loaded. I was in Memphis & went to a Celtics-Grizzlies game that looked like the over-50 league at your local Y. The Celts went up 8 early in the fourth, and Doc Rivers pulled Pierce for the rest of the game. Of course, the Griz countered with three stiffs off the end of their bench and someone who looked like the team trainer. What a clangfest…they should’ve paid me to watch that debacle!
BC (307)-
Besides, tonight’s game is plenty exciting…2nd game in a row I’ve got the Spurs @ pick-em.
Somebody in Vegas is asleep at the switch.
“With over a trillion dollars sitting in its exchange reserves, earning the going rate of 3 to 4 percent for US treasury bonds, barely maintaining its value in real terms, is China in danger of putting all its eggs in one very fragile basket?”
“To bring the US current account into balance, it is estimated that a depreciation of the US dollar anywhere from 30 to 40 percent is needed in real terms, equivalent to a loss for China of almost one year’s worth of foreign exchange earnings.”
The conclusion of this saga will be played out in international markets over the coming months and years with no action possible on the US side before a new administration takes office in 2009.
A large portion of Chinese savings – made possible by the sweat of its work force expended on accumulating the trillion dollars in assets over these years – hangs in the balance.
“A sound investment strategy would caution against putting all one’s eggs in a single currency basket. Dragons, together with their legendary golden hoards, have long since disappeared from the face of the globe, but many sitting ducks remain, getting turned almost daily into a roasted meal for someone else.”
http://www.chinadaily.com.cn/bizchina/2007-06/07/content_889241.htm
#298 –
i tried to finagle something in CA for my son. it couldn’t work.
i think they know the tricks.
#311- Like I said, I am not planning on using tricks. It means my kids have to make some sacrifices of their own, including delaying college. I don’t take this investment lightly, nor should they.
REITs Take Hit From Surge in Treasury Bond Yields
One victim of the recent surge in Treasury bond yields has been real-estate investment trusts, one of the stock market’s hottest sectors last year.
The Dow Jones Wilshire REIT Index, up 31% in 2006, has dropped nearly 6% in June. It’s down 15% since hitting an all-time high in early February, amid rising interest rates and a real-estate downturn.
Higher Treasury yields make Treasurys an appealing alternative to high-yielding REITs. Higher interest rates also hurt the value of real estate in REIT portfolios.
Pension funds could be hurt by the shift. At the end of 2006, institutional investors such as pensions tracked by Pension & Investments magazine had $72 billion invested in REIT equities.
The dividends doled out by REITs are traditionally the big lure for investors. Many REIT investors also have been drawn by promises of fast growth, causing REIT valuations to rise and their dividend yields to shrink.
After years of supercharged growth, REIT’s aren’t such a great bargain anymore. The dividends on the average U.S. equity REIT yields just 4%. That’s 1.2 percentage points below the yield on 10-year Treasury notes, a record wide disparity between the two, says Stifel Nicolaus analyst David Fick. He downgraded the sector this week.
Re: Residency
if i remember correctly, i think the major snafu that i ran into with establishing residency in california was that he had to prove that he could support himself and pay for tuition and living expenses himself by showing them a budget. so if they saw the money was coming from parents, then it was a no go.
Subprime Borrowers Fall Behind on Mortgage Payments
But Like Politics, All Real Estate Is Local
By CHARLES HERMAN
ABC NEWS Business Unit
June 14, 2007
http://abcnews.go.com/Business/PersonalFinance/story?id=3278938&page=1
NJGal – We have a Bugaboo Frog for our son (he was born in 2005). It’s big plus is maneuverability (even on the beach) and it’s super comfy.
It is NOT a one hand disassembly, but it does fold down and won’t take up the entire trunk of the SUV.
You can attach the baby seat (either a Graco or Peg Perego), but you have to buy the attachment for that separately.
I’d say the drawbacks are storage (the underseat area is a big pain to get to) and there is no snack tray for baby and no drink holder for mom.
It all depends on what your priorities are. We love ours for what it is.
Oh and we got our tax deduction onesie in a novelty store in the East Village.
T C M- Noted. University of CA has probably the strictest requirements. Establishing residency takes 2 years, which would mean 2 years of working before college. If a child of mine desperately wanted California, they would face much higher hurdles. So high as to make it an unlikely option if they wanted financial help from us. (http://registrar.berkeley.edu/Residency/legalinfo.html)
Tell you all one thing – China will not be a bag holder. They will exchange their crappy dollars for real, tangible & valuable things. BTW, check out http://www.jerseylegalforums.com
“The bulk of the country is not in this circumstance,” says MBA Chief Economist Douglas Duncan. And the bulk of the mortgage market, he says, is “very healthy.”
The association expects the housing market to recover in late 2007.
Don’t forget, the MBA has a vested interest in seeing a recovery. The data simply don’t support this conclusion.
RealtyTrac reports a 25% increased in NJ foreclosures since April. Compared with last May, foreclosures in NJ have increased by over 100%.
The MBA considers this “very healthy”? I guess if California is the standard, with a 353% YOY increase in foreclosures, NJ is looking pretty good.
NJGator #316, $750 for a stroller?
To me, that’s in the $300 jeans category. :)
very late to this, but I have to say say it.
Re RMB at 109 etc.
If someone shows me an $800 stroller, it better have an engine.
Also, not to pick, (but hey, it’s what I do) but:
so we really saved money when she was born.
Not quite. You didn’t “save” money because I’m guessing you kinda, sorta, knew what was coming. What happened there was you were spared a lot of expense. Similar, but not the same.
I (as I’m sure many others do) have a friend who always “saves” all kinds of money buying crap she doesn’t need, but gets on sale.
btw,
both my kids used the crib her mother bought to use when she was born.
Also, last post on the stroller story.
We didn’t go for an expensive one (I don’t even know where the thing came from) but I did splurge a bit on a baby backpack.
The thing was awesome, and we lived in a walking town at the time so it got a lot of use, they are unbeatable in an urban environment.
I got it at EMS and I think I paid more than $100 (maybe $140, and those are 1992 dollars), but it was worth every cent.
The IVY league does not mean shit anymore. There are plenty of morons that come out of Harvard Business School and cannot put an original thought together….entitlement does not equal job performance.
324,
I agree with you.
SAS
“The subprime business continues to be weak; we haven’t seen the bottom of the market,” Goldman Chief Financial Officer David Viniar said. “There will be more pain.”
SAS
Donald or anyone familiar with Cliffside Park. Any thoughts on the Greenhouse Condo Complex. Friends, late 50’s moving out of house for easier living but need to be near NYC and Bergen County. It seems a nice bldg, pet friendly with pretty reasonable prices. Just wondering if one can add any comments. Thanks
I went to one of the UCs in the 90s. We were moving to CA anyway so we went in March to check everything out and got drivers licenses at that time. Moved in August, applied, took a prerequisite class starting in January, and then enrolled in September. The difference would be that I was on my own when we moved out there. They didn’t check out anything but I’m sure things have probably changed.
#328
Just remembered that I applied for financial aid so they would have had my tax returns and that would have proven that I was on my own.
Not that anyone cares. But as university employees at most schools you are entitled to free tuition for your kids. Now most people will say what if I don’t want to force my kid to go to that school. Well it gets better, I checked into a few jobs for my wife, St. John’s and NYU for instance have reciprocal privledges with hundreds of school. My friends wife was the music department secretary at Hofstra University and send three kids to college for free. Yea you have to take a pay cut but if you have a stay at home spouse it is a good re-entry point to work and it does not matter that the job is a low level one as the tuition is great. Plus the ultimate deal is, lets say your boss is nice and says I will pay your 40K tuition for you to be a lawyer, guess what that is taxable income. Colleges call it a tuition waiver and it is a tax free benefit!! So a 40K free tuition ride is 70K taxable and if you have two kids in school it is equivalent to 140K taxable. Hey that 30K secretary job is looking good. Plus you get a pension to boot! When I went to SJU years ago there were a lot of retired cops as security guards and moms in the kitchen and guess what kids still got a free ride. Even parents with a GED can work there. There are also accounting, audit, finance, facilities jobs etc. Plenty of work for non-teachers with same benefits.
Unrealtor #320…we didn’t pay retail and our intent is to sell it when we’re done(you’d be surprised what people are willing to spend for these things used – I certainly was).
I was willing to go much cheaper, but my husband liked the mechanics of it. After we sell it, it will wind up costing us no more than a Peg Perego. It was one of the few baby items that my husband actually had an opinion on, so I let him have his way.
Lindsey,
Its simantics. Bottom line I saved money by having alot of neices and nephews…And I have no idea what your point is but I said I “don’t” get the $800 dollar stroller thing. And “not to pick”.. I think I have been picked on enough here. You certinaly were picking.. But you had to say it right!
semantics
http://newyork.craigslist.org/que/bab/350053696.html
Cheapest Bugaboos are $380 on Craigs list. Ebay is $500+ used