Buy or Rent driving Wealth Inequality?

From CNBC:

The Wealth Gap Is Expanding as More People Rent, Study Says

For the majority of American homeowners, their house is their single largest asset. Despite the crash in home values in the last decade, that still holds true.

That crash, however, created a much larger share of renters, and these Americans are not enjoying the new wealth that now-rising home prices afford. Ninety percent of metropolitan housing markets have seen a decline in their homeownership rates, while home values are rising and incomes are flat, and that is widening the wealth gap, according to a new study by the National Association of Realtors, which looked at homeownership, home values and income growth from 2000 to 2013.

“Homeownership plays a pivotal role in the U.S. economy and has historically been one of the primary sources of wealth accumulation for middle-class families,” said Lawrence Yun, chief economist for the Realtors.

“Unfortunately, due to an underperforming labor market, insufficient housing supply and overly stringent underwriting standards since the recession, homeownership has plunged to a rate not seen in over two decades,” Yun added. “As a result, the country has become more unequal as the number of homeowners has fallen while the number of renters has significantly risen.”

There is also a new asset class of single-family rental homes, the outgrowth of the housing crash, when investors swooped in and bought up millions of distressed properties.

This provided even more options and incentives for people to rent, especially those with families who want to live in good school districts. Now, as home prices rise again, none of these renters are now experiencing any of the wealth growth their homeowner neighbors are; they are instead seeing increases in monthly rent charges, which detracts from wealth.

“Changes in wealth during this period are especially profound in high-cost metro areas that have seen robust price growth,” added Yun. “For instance, a typical homeowner in San Jose, California, enjoyed an increase of $210,671 in housing wealth, while renters were left behind and likely exposed to annual rent increases.”

The wealth gap is increasing most in the largest metropolitan markets, like New York and Los Angeles, but it is happening everywhere. In the Kansas City metropolitan area, the homeownership rate dropped by more than 3 percent between 2010 and 2013, but the change in wealth for homeowners grew by almost $20,000. That’s $20,000 in wealth that renters did not see.

The study also showed that income inequality, based on the Gini index, a measure created by the World Bank, is widening as well. That is exacerbating the wealth gap in certain metro markets as well. For instance, Miami has the third-highest income gap in the nation.

At the same time, the homeownership rate fell by 3.3 percent from 2000 to 2013, while homeowners gained more than $50,000 in household wealth, due to rising home values. Renters, who were likely already on the lower-income side, saw none of those gains.

The newfound popularity of renting among young millennials may come back to bite them, as the gap continues to widen. That divide is also certain to have political ramifications, as candidates for the 2016 presidential election shape their platforms on unemployment and homeownership, at the same time courting the all-important millennial vote.

This entry was posted in Demographics, Economics, National Real Estate. Bookmark the permalink.

71 Responses to Buy or Rent driving Wealth Inequality?

  1. Ottoman says:

    In other words, more whites now know what it was like when blacks were denied wealth building through home ownership and access to neighborhoods with appreciating value during most of the 20th century.

  2. anon (the good one) says:

    @KeithOlbermann:
    Coming up at 5: They should suspend Tom Brady for a year. One day for this #Ballghazi trivia, 364 for the rest of this crap.

    anon (the good one) says:
    May 7, 2015 at 6:04 pm

    @ivaningc:

    #Ballghazi definitely sounds better than #DeflateGate

  3. D-FENS says:

    1 – oh brother.

  4. D-FENS says:

    You’re A Fool To Prepay Your Mortgage

    http://investorjunkie.com/13979/fool-prepay-mortgage/

  5. leftwing says:

    Reason Number 12 to Carry a Monster Mortgage: The best one

    Moral Hazard. If it blows up in your face the Feds will bail you out or otherwise create an environment where you won’t have to pay it.

  6. Anon E. Moose says:

    Footstool [1];

    So you’re saying that whites were never renters in large numbers until 2015? You can’t possibly fathom how ignorant and race-baiting that sounds.

  7. Anon E. Moose says:

    D-Fens [4];

    Edelman has a program on 770 Sunday mornings. Insipid financial advice whose primary purpose is to generate management fees and commissions for himself and those like him.

  8. chicagofinance says:

    Is this a JJ reference?

    D-FENS says:
    May 8, 2015 at 7:59 am
    11 Great Reasons to Carry a Big, Long Mortgage

  9. D-FENS says:

    8 – I realize that, I know exactly who he is…but does that discredit his point? I take his advice with a grain of salt.

    The conventional wisdom here is to avoid debt. Is Mr. Edelman wrong?

  10. Libturd at home says:

    That InvestorJunkie article is pretty poorly written, but the debates in the comments are interesting. What seems to be missing from the article is that after 15 years, your mortgage is paid off and you can invest fully in equities. On a 30 year, you won’t be able to do that between the 15th and 30th year. Then there is the advantage of not carrying debt and the risks that come with it.

    In other news, Mr. Market is off to a flying start and I hope this giant bust through 18K on the Dow is the final nail in the recent market capitulation. I can be hopeful.

  11. grim says:

    Pretty sure that homeownership is driving wealth inequality in NJ’s urban areas…

  12. FKA 2010 Buyer says:

    New York home flippers scored average returns of 47% in the first quarter: report

    It’s a flipping good market for house flippers.

    New York City is among the top metro areas for homebuyers who want to flip their properties for maximum profits, according to a new report by housing analytics company RealtyTrac.

    New York and New Jersey-based home flippers made an average return of investment of 47.1% in the first quarter of 2015, the report shows.

    They got an average of $392,049 on properties they bought for just $266,447.

    Home flips made up 3.7% of all sales in the New York and New Jersey metro area.

    “The strong returns of home flippers in the first quarter demonstrate that there is still a need in this recovering real estate market for move-in ready homes rehabbed to more modern tastes,” said Daren Blomquist, vice president at RealtyTrac.

    Nationwide, investors scored average returns of 35.1% on house flips, up slightly from the 35.0% recorded this time last year.

    Among the markets with the highest potential for returns were struggling locales such as Baltimore and Detroit, which logged average returns of 94.1% and 58.3% apiece. Florida was also a top market for flippers.

    http://www.nydailynews.com/life-style/real-estate/new-york-home-flippers-scored-average-returns-47-q1-article-1.2214600

  13. The Great Pumpkin says:

    Wow, what is this porn for pumpkin day!!! Lead article highlights everything I have talked about. Then d-fens comes through with articles that supported what I said about maxing out as large of a mortgage as you can get right now to purchase real estate. If you understand making money, then you get as much free money as you can right now and purchase income producing properties.

  14. FKA 2010 Buyer says:

    The Lehman Brothers crash no doubt caused a lot of pain. Its downfall effected many markets. For the most part, it negatively affected people’s life’s whether it was their house, investments, retirement accounts, etc. However, the people who dry powder (usually more wealthier), it presented a perfect opportunity to make take advantage of the market.

    I’m still kick myself for not picking up some Citi shares when they were trading around $3.

  15. The Great Pumpkin says:

    Wow, what is this porn for pumpkin day!!! Lead article and the article in post 4 support positions I have been advocating on here.

  16. The Great Pumpkin says:

    Wow, what a day for pumpkin!!! Lead article highlights everything I have talked about. Then d-fens comes through with articles that supported what I said about maxing out as large of a mortgage as you can get right now to purchase real estate. If you understand making money, then you get as much free money as you can right now and purchase income producing properties.

  17. The Great Pumpkin says:

    4- Yup

    “Reason #3: A mortgage is cheap money.
    Mortgages, in fact, are the cheapest money you will ever be able to borrow. (Oh, sure, you can get a credit card that offers 0% interest for six months, but try to borrow a couple hundred thousand for 30 years that way.)

    You get a loan when you demonstrate you have the ability to repay it. But how much interest will you have to pay? The more confident the lender is that it will get its money back, the less interest it will charge you. By offering your house as collateral, you agree to let the bank have your house if you don’t repay the loan. This dramatically reduces the bank’s risk, resulting in a very low interest rate. (By contrast, credit cards have no collateral; Visa can’t take the sweater you bought if you don’t pay the bill. Credit card companies know that a certain portion of their cardholders will default, so they charge 18% to most cardholders. They figure that if a third of the cardholders default, they’ll still end up with a 12% return on their money. Not a bad business.)”

  18. The Great Pumpkin says:

    From the lead article. Exactly what I was saying this week. Dream on about prices falling, the investors will not allow it. They will swoop in and grab anything that falls in value.

    “There is also a new asset class of single-family rental homes, the outgrowth of the housing crash, when investors swooped in and bought up millions of distressed properties.”

  19. Ragnar says:

    I repaid my mortgage early this year. Now I have built up some excess cash and am thinking it should go into Florida property that could generate rental income, but we could occasionally visit as well. Would be interested in premium but not super premium, probably an asset under $800k, 20% down, the rest financed.
    Who has ideas and opinions to share?

  20. The Great Pumpkin says:

    Yup, more support for my position that we are heading towards a class of renters and owners.

    “Unfortunately, due to an underperforming labor market, insufficient housing supply and overly stringent underwriting standards since the recession, homeownership has plunged to a rate not seen in over two decades,” Yun added. “As a result, the country has become more unequal as the number of homeowners has fallen while the number of renters has significantly risen.”

  21. The Great Pumpkin says:

    Fast eddie, I deserve some apologies. Renting is for fools.

    “Changes in wealth during this period are especially profound in high-cost metro areas that have seen robust price growth,” added Yun. “For instance, a typical homeowner in San Jose, California, enjoyed an increase of $210,671 in housing wealth, while renters were left behind and likely exposed to annual rent increases.”

  22. The Great Pumpkin says:

    That’s the idea. The minute the mortgage is paid, take out a loan and buy a rental property. You are an idiot if you are sitting in this low rate environment (free money) and don’t have a mortgage. You don’t want to make money if this is the case.

    Ragnar says:
    May 8, 2015 at 10:40 am
    I repaid my mortgage early this year. Now I have built up some excess cash and am thinking it should go into Florida property that could generate rental income, but we could occasionally visit as well. Would be interested in premium but not super premium, probably an asset under $800k, 20% down, the rest financed.
    Who has ideas and opinions to share?

  23. Ragnar says:

    What I’m more looking for is suggestions of location and investment strategy. 3rd party managed condominiums? I lived over 20 years in central Fl, but didn’t spend that much time in the retirement/vacationing coastal areas. I don’t think I’m interested in the Miami area, but that’s about all.
    There’s Bradenton to Naples on the gulf coast, and there’s stuff around West Palm Beach on the east coast, and places north of Miami. I think the keys are probably too isolated for me.

  24. D-FENS says:

    23 – Most people I’ve rented from either lived within driving distance of their rental property or had a close relative that did. Owning a rental that is 900 miles away might not be a good strategy.

  25. grim says:

    My parents were just down near Bradenton looking for a place. They are insistent on an SFH, but that’s the old school mentality, there is an appeal I think to the simplicity of a centrally managed condo or townhouse development. Most people look at the maintenance costs of those units as a burden, but in a remote situation, it’s a bargain. I’ve got to fly down there and take a look myself, I don’t trust Fl. Realtors one bit.

  26. The Great Pumpkin says:

    I would think any of the areas north of Miami located on the coast would be good. Only thing I would be afraid of is a hurricane. They haven’t been hit in a while and it’s probably due to get hit soon (within 5 years) but who knows. Mother nature does what she wants. If you are all about the profit, buy somewhere in the nyc metro area.

    Ragnar says:
    May 8, 2015 at 11:34 am
    What I’m more looking for is suggestions of location and investment strategy. 3rd party managed condominiums? I lived over 20 years in central Fl, but didn’t spend that much time in the retirement/vacationing coastal areas. I don’t think I’m interested in the Miami area, but that’s about all.
    There’s Bradenton to Naples on the gulf coast, and there’s stuff around West Palm Beach on the east coast, and places north of Miami. I think the keys are probably too isolated for me.

  27. D-FENS says:

    23 – Port St. Lucie

  28. leftwing says:

    Reason number one not to listen to the guy below, he’s a financial idiot.

    When one defaults they default on the principal, not just the interest.

    A default rate of 33% on a portfolio earning 18% does not yield 12%. Jack***.

    Yes, there may be some recovery, but costs often eat a significant portion of it.

    “Reason #3: A mortgage is cheap money.
    Mortgages, in fact, are the cheapest money you will ever be able to borrow…But how much interest will you have to pay?…Credit card companies know that a certain portion of their cardholders will default, so they charge 18% to most cardholders. They figure that if a third of the cardholders default, they’ll still end up with a 12% return on their money. Not a bad business.”

  29. Watch out JJ, maybe holocracy is coming to your workplace.

    https://finance.yahoo.com/news/at-zappos–some-employees-find-offer-to-leave-too-good-to-refuse-133350997.html

    Zappos.com Inc. has long offered pay to new hires who wanted to quit. The company’s leader, Tony Hsieh, said he wants employees who are truly excited about working for the Las Vegas-based online retailer.

    When Zappos recently gave that option to its entire staff, offering at least three months’ severance to anyone who chose to leave by April 30, it was an offer many couldn’t refuse.

    About 14%, or 210, of the company’s roughly 1,500 employees have decided to leave the firm, according to Zappos. The exodus comes amid the company’s transition to an unusual management structure called Holacracy, in which employees essentially manage themselves, without traditional bosses or job titles.

    The company has acknowledged that the transition to this new form of self-management has been a difficult one. In March, Mr. Hsieh sent a 4,700-word memo to staff stating that Zappos, an independent subsidiary of Amazon.com Inc., was taking too much time switching to this new management structure. He offered all employees at least three months’ severance if they decided by April 30 that working in Holacracy was not for them.

  30. D-FENS says:

    Cuomo bypassing legislature in minimum-wage fight

    http://www.cbsnews.com/news/cuomo-bypassing-legislature-in-minimum-wage-fight/

    Calling income inequality “a national problem that leaders at all levels of government are grappling with,” Cuomo, in an op-ed piece published in the New York Times, said he was directing the state’s labor commissioner to put together a board to examine whether the minimum wage in the fast-food industry is sufficient to provide for the life and health of its workers.

    The board’s recommendations will come in about three months, Cuomo said, and won’t require approval from the State Legislature, which rejected his proposal to increase the minimum wage to $11.50 in New York City and $10.50 elsewhere in the state.

    The minimum wage in New York currently stands at $8.75, and will increase to $9 at the end of the year

  31. The Great Pumpkin says:

    I’m focused on the ability to borrow lots of money at cheap rates. That’s my point. I don’t care about the other crap he is selling or the point of his whole article. Being able to buy property that will generate significant income with the banks money is a beautiful thing. Even if you don’t want be a landlord, suck it up for 10 years, build some equity with the renter’s money, and then dump it into a business or stocks.

    leftwing says:
    May 8, 2015 at 12:14 pm
    Reason number one not to listen to the guy below, he’s a financial idiot.

    When one defaults they default on the principal, not just the interest.

    A default rate of 33% on a portfolio earning 18% does not yield 12%. Jack***.

    Yes, there may be some recovery, but costs often eat a significant portion of it.

    “Reason #3: A mortgage is cheap money.
    Mortgages, in fact, are the cheapest money you will ever be able to borrow…But how much interest will you have to pay?…Credit card companies know that a certain portion of their cardholders will default, so they charge 18% to most cardholders. They figure that if a third of the cardholders default, they’ll still end up with a 12% return on their money. Not a bad business.”

  32. When I strategically retire in 3 years, I used to think I would mortgage my house just before, so I can show a high debt load to snooping college financial aid offices, but then I have to put the money somewhere and that will count against me, I was thinking about investing it in a business that won’t make any money for 6 years, but now I’m thinking maybe the easier way to show no income is to just leave the home paid off and draw a very small income from retirement accounts. My understanding is that neither your home equity nor retirement accounts count against you when colleges figure what you can “afford” to pay for your kids.

  33. D-FENS says:

    Michael Saltsman, research director at the Employment Policies Institute, warns that the policy and how Cuomo is going about it are bad news.

    “This is why we have representative democracy,” Saltsman told The Daily Caller News Foundation. “It’s kind of a cowardly way to go about this.”

    Saltsman argued such an important economic decision should be handled by lawmakers who are accountable to the residents they represent, especially since it could result in job loss.

    “The advocacy groups and unions have been pushing for this unelected wage board,” Saltsman said. “Cuomo is just trying to do a favor for the union.”

  34. ^^^^I’ll be exactly 60.5 when my oldest starts college in September 2020. I figure I have to “retire” at least a year ahead of time? Anybody have any recent experience on that front?

  35. 1987 Condo says:

    #34..I had been considering that approach last 5 years.
    What I learned…most “aid” ends up being Student Loans, Parent Plus Loans and Work study

    Unless all assets are in retirement plans, unless you can show less than $50,000 income, they will take into account 5% value as your contrib each year.

    So I have $1 million outside of retirement I still have to come up with $50k
    The private schools use another form that counts home equity, business and all other assets.

    I just decided to save up the money to pay straight out.

  36. 1987 Condo says:

    For all those buying and renting multi’s..sounds like this is “riskless”..? Is it?
    Are you all putting these into LLC’s that you are certain protect you from all adverse financial consequences? If so, then I will look into it.

  37. leftwing says:

    31. Pumpkin, agree. If you can lever a property to the hilt with cheap debt and generate positive ROI straight out of the box, why not? Hit that trade all day long.

    Own the idea, you don’t need to quote someone. Notwithstanding the good idea the author is totally discredited by his most basic of errors.

    32. Expat, college. Anyone have any experience on the financial side for college? Will be starting to pay attention to it shortly. After nearly three years of divorce (yes, not a typo, three) we went final this week. Plus taxes will be due. Need to make some decisions very soon with two soon to be college age children in mind, one of which will be applying later this year.

    Know there is a standardized form, FAFSA, haven’t cracked it yet. Probably a good place to start. Anyone with real world experience?

  38. 1987 Condo says:

    You can try this among others to estimate your EFC.
    Expect to be told you can contribute 49% of your annual salary

    http://www.finaid.org/calculators/finaidestimate.phtml

  39. leftwing says:

    Re: Student Loans

    Eons ago, 80s, there were fewer restrictions on loans regarding income or amounts.

    Dad of a buddy of mine was head bond trader at DLJ. Could have afforded kid’s college cash out of pocket. Took maximum student loans out a highly preferential rates, threw the proceeds in the T-Bond spike. Set up about an 6 percentage point LT arbitrage for himself.

  40. 1987 Condo says:

    Student loans are north of 7% these days

  41. The Great Pumpkin says:

    Cuomo gets it. Every tax paying citizen should be up in arms over the fact that 6,800 in taxpayer money is going to subsidize profitable corporations (that’s per employee) Biggest ripoff ever.

    “Fast-food workers and their families are twice as likely to receive public assistance compared with other working families. Among fast-food workers nationwide, 52 percent — a rate higher than in any other industry — have at least one family member on welfare.

    New York State ranks first in public assistance spending per fast-food worker, $6,800 a year. That’s a $700 million annual cost to taxpayers.

    While workers in the fast-food industry are struggling, the industry is healthy, having taken in $195 billion in global revenues last year, a sum that is projected to grow to $210 billion by 2018. McDonald’s brought in $4.67 billion last year; Burger King earned $291.1 million. The government is subsidizing these corporations, allowing them to keep their labor costs low and their profit margins high.

    Industry leaders have argued that raising wages for fast-food workers would drive up the prices of burgers and fries beyond what many customers, themselves of modest means, can afford. But that hasn’t been the experience in other countries. Australia set the minimum wage for adult fast-food workers at $16 an hour, but a Big Mac there costs only $4.32 on average, compared with $4.79 in the United States, according to The Economist’s Big Mac Index. France, where the minimum wage is over $12, has more than 1,200 McDonald’s.

    More than 600 economists, including seven Nobel Prize laureates, have affirmed the growing consensus that raising wages for the lowest-paid workers doesn’t hurt the economy. In fact, by increasing consumer spending and creating jobs, it helps the economy. Studies have shown that every dollar increase for a minimum-wage worker results in $2,800 in new consumer spending by household, and of the 13 states that have increased the minimum wage since 2014, including New York, all but one experienced employment growth.”

  42. The Great Pumpkin says:

    Where’s Ben? He knows his stuff and I’m sure he has some tips that can be helpful.

    32. Expat, college. Anyone have any experience on the financial side for college? Will be starting to pay attention to it shortly. After nearly three years of divorce (yes, not a typo, three) we went final this week. Plus taxes will be due. Need to make some decisions very soon with two soon to be college age children in mind, one of which will be applying later this year.

    Know there is a standardized form, FAFSA, haven’t cracked it yet. Probably a good place to start. Anyone with real world experience?

  43. The Great Pumpkin says:

    Hey now, don’t throw around words like “riskless”. lol Nothing is “riskless”. Based on the current market conditions, it is less risky than any other investment right now. You are buying at good prices based on rental income. You are sure to capitalize on price along with rental income, as the price rises in the next 10 years.

    You don’t put it into an LLC until you build up to at least 3 properties.

    1987 Condo says:
    May 8, 2015 at 12:55 pm
    For all those buying and renting multi’s..sounds like this is “riskless”..? Is it?
    Are you all putting these into LLC’s that you are certain protect you from all adverse financial consequences? If so, then I will look into it.

  44. Walking Bye says:

    I have bought in the tampa area. The market is broken into 2 parts for rentals-Under $150k where you can get $1300 a month and the closer $175 to $225k where you are looking at $1800 a month. The over $225 market seem to be picking up steam with a lot of retirees looking at that range. Why a retiree needs a 5 bedroom 3,000sf $275k home with pool (when the hoa has a clubhouse pool) is beyond me. But that’s the market Im seeing. You can pick up a nice 2 bed condo for $80k which will require a little bit of sweet equity and be off and running as a rental .

  45. The Great Pumpkin says:

    Tell Saltsman, the taxpayer is sick of subsidizing profitable companies that continue to pay their workers below the amount needed to survive.

    D-FENS says:
    May 8, 2015 at 12:46 pm
    Michael Saltsman, research director at the Employment Policies Institute, warns that the policy and how Cuomo is going about it are bad news.

    “This is why we have representative democracy,” Saltsman told The Daily Caller News Foundation. “It’s kind of a cowardly way to go about this.”

    Saltsman argued such an important economic decision should be handled by lawmakers who are accountable to the residents they represent, especially since it could result in job loss.

    “The advocacy groups and unions have been pushing for this unelected wage board,” Saltsman said. “Cuomo is just trying to do a favor for the union.”

  46. JJ says:

    My cousin back around 1979-1984 era took out max student loan every year even though parents paid for it. Interest was pegged at 8% and interest or principal did not accrue until after graduation.

    She bought 30 year treasuries at 16% with money. It paid for all four spring breaks on interest income, she paid back loan on interest payments and had a cash stream till she was 51 years of age

  47. Wily Millenial says:

    Good lord that form is brutal. The “all the college money in a Roth” strategy is looking good.

  48. chicagofinance says:

    PATERSON – The talk around the water cooler this morning is how a mom could possibly have twins with two different fathers. It seems everything we learned in seventh-grade health class has been thrown out the window following a Passaic County judge’s decision that a father is only required to pay child support for one of the twins. A DNA test shows he is almost certainly not the dad of the other baby. Further Morning Briefing investigation has learned if a woman has sex with two men in the same menstrual cycle, it is possible for eggs to be fertilized separately by each man. This should all be interesting fodder for awkward holiday dinners with Dad and Rob.

  49. JJ says:

    It is risky to buy homes in the tampa area, sometimes folks can steal your mobile home when you are at work.

  50. The Great Pumpkin says:

    Pretty disgusting. Feel bad for those kids. Doomed from the start.

    chicagofinance says:
    May 8, 2015 at 2:09 pm
    PATERSON – The talk around the water cooler this morning is how a mom could possibly have twins with two different fathers. It seems everything we learned in seventh-grade health class has been thrown out the window following a Passaic County judge’s decision that a father is only required to pay child support for one of the twins. A DNA test shows he is almost certainly not the dad of the other baby. Further Morning Briefing investigation has learned if a woman has sex with two men in the same menstrual cycle, it is possible for eggs to be fertilized separately by each man. This should all be interesting fodder for awkward holiday dinners with Dad and Rob.

  51. Statler Waldorf says:

    That “I’m missing the boat” fear can have very bad consequences…

    http://www.nj.com/news/index.ssf/2008/06/nj_state_pension_funds_invest.html

    “I’m still kick myself for not picking up some Citi shares when they were trading around $3.”

  52. 1987 Condo says:

    #52, we know that Citi did have a reverse stock split 1-10, right.

  53. yome says:

    3 types of College Loans
    1. government subsidize the full amount- for poor students. Very hard to get into.
    2. Government subsidize interest while student is in school- Student pays principal plus interest after graduating- hard to get in.
    3.Student takes the Stafford loan- There is a max loan amount per year depending on Parents income. Compounding Interest accumulates while student takes the loan and not making any payment for duration of school. This is a KILLER. Interest making interest for 4 years plus principal.It was 6.8% 4 years ago.when my kid was going.This is the more common one

    Suggestion: Let your kid take the loan and Stafford gives you 2 months interest free to pay it back in full. From what I can remember Check with them

  54. Walking Bye says:

    Floridas not that bad for rentals. Lots of retirees looking to rent. Lots of retired blueshirts that can repair your rentals.

  55. The Great Randian says:

    The posts here sometimes make their own argument.

    Why the boomers who got the best are now the tea-party rightwing zealots that hate everyone and wants to ruin the party for everyone. And why true believers like Ragnar are full of it.

    Boomers got:

    Post 46 – from JJ:

    May 8, 2015 at 1:53 pm

    My cousin back around 1979-1984 era took out max student loan every year even though parents paid for it. Interest was pegged at 8% and interest or principal did not accrue until after graduation.

    She bought 30 year treasuries at 16% with money. It paid for all four spring breaks on interest income, she paid back loan on interest payments and had a cash stream till she was 51 years of age

    The Non-Boomer Locust get this:

    Post 54 – yome:

    3 types of College Loans
    1. government subsidize the full amount- for poor students. Very hard to get into.
    2. Government subsidize interest while student is in school- Student pays principal plus interest after graduating- hard to get in.
    3.Student takes the Stafford loan- There is a max loan amount per year depending on Parents income. Compounding Interest accumulates while student takes the loan and not making any payment for duration of school. This is a KILLER. Interest making interest for 4 years plus principal.It was 6.8% 4 years ago.when my kid was going.This is the more common one

  56. leftwing says:

    52. NJ Pension in Lehman

    While $180m appears to be a large number and it would really s**k to be the guy making the trade it is not that bad.

    If the portfolio number was correct – $81.5B – that loss was barely even a rounding error. 0.2%.

  57. Comrade Nom Deplume, the loan snark says:

    From an article on Chicago’s fiscal crisis. It seems one of our favorite trolls is moonlighting:

    “”A property tax increase could solve Chicago’s problems tomorrow,” Fabian said. “But the city has chosen not to do that, even though it has the potential.” Chicago could raise taxes by 50 percent and still have lower taxes than New Jersey, he said.”

    http://www.cnbc.com/id/102662409

  58. anon (the good one) says:

    indeed

    The Great Randian says:
    May 8, 2015 at 3:24 pm
    The posts here sometimes make their own argument.

    Why the boomers who got the best are now the tea-party rightwing zealots that hate everyone and wants to ruin the party for everyone. And why true believers like Ragnar are full of it.

  59. The Great Pumpkin says:

    Damn, that’s a powerful post. I never even thought about this, but you are absolutely right. The baby boomers experienced some of the best govt handouts in the history of our govt. Hell, the govt wasn’t bought out by corporations when they grew up. Meaning, they had plenty of unions around to keep wages in check. They never had to experience working at a job you could not survive on without govt assistance. Now these jokers are going to come and bust our balls? They have the nerve to call us a lazy generation living in our parents basement. Baby boomers need to take a look in the mirror for a change.

    “Why the boomers who got the best are now the tea-party rightwing zealots that hate everyone and wants to ruin the party for everyone. And why true believers like Ragnar are full of it.”

  60. The Great Pumpkin says:

    Went to the premiere event for the Volvo XC90. Awesome car. The guy we went on a test drive with was from Detroit. I asked if its true that det is making a comeback, and he said absolutely. It’s changing by the day he said. I’m not worried about jersey or Chicago.

    Comrade Nom Deplume, the loan snark says:
    May 8, 2015 at 3:54 pm
    From an article on Chicago’s fiscal crisis. It seems one of our favorite trolls is moonlighting:

    “”A property tax increase could solve Chicago’s problems tomorrow,” Fabian said. “But the city has chosen not to do that, even though it has the potential.” Chicago could raise taxes by 50 percent and still have lower taxes than New Jersey, he said.”

    http://www.cnbc.com/id/102662409

  61. NJT says:

    “…The baby boomers experienced some of the best govt handouts in the history of our govt. Hell, the govt wasn’t bought out by corporations when they grew up. Meaning, they had plenty of unions around to keep wages in check. They never had to experience working at a job you could not survive on without govt assistance…”.

    Best text you ever typed, Linus, but, Lucy may have something else to say.

    Just cost a nickel…

    Joking. Incredible the EASY advantages those boomers had that no other generation ever will.

    Caught the tail end and got whip lashed a few times.

    – Snoopy

  62. Ragnar says:

    Pumpkin,
    Are you aware that Volvo is now owned by a second-rate Chinese carmaker named Geely?
    I wouldn’t touch that brand now.

  63. Richard says:

    Highest earning zip code in NJ is 07399. Must be a PO Box.

    https://www.edq.com/data-quality-infographics/wealthiest-zip-codes/

  64. leftwing says:

    Or a street corner in front of a bodega.

    Small sample size issue. Other anomalies, Pittsburgh and Hartford top lists. With 20 and 11 returns filed, respectively.

  65. The Great Pumpkin says:

    Nothing more than a Chinese investor. They are still a Swedish company. The xc90 is designed and made in Sweden. If it was designed by the Chinese I wouldn’t think about buying it. It’s a super nice suv. They don’t brand it as an x5 killer for no reason.

    Ragnar says:
    May 8, 2015 at 5:59 pm
    Pumpkin,
    Are you aware that Volvo is now owned by a second-rate Chinese carmaker named Geely?
    I wouldn’t touch that brand now.

  66. The Great Pumpkin says:

    Ford held Volvo back with the years of penny pinching. Now they have the financing to design awesome cars.

  67. Libturd at home says:

    On Lemon Brothers investment…it would have been much larger, but Corzine put in the maximum amount he could without needing approval from the group in charge of vetting state pension investments. Baa!

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