Quote :

"my decision to pay off a substantial part of the house was a mistake."

Well, at least you've learned _something_

3/4/2008 2:29:34 PM

Although, it bears mentioning that if I had not paid off that much, to free up equity, and to lower my I/D ratio, I most likely would not have been capable of purchasing the second property. So it's all a big trade off. I gained in diversity, and instantaneous net worth, but I reduced my liquidity.

I am altogether uncertain how to prioritize some of these investment factors. Is it worth it to get a more liquid investment that performs worse? Liquidity doesn't seem to be important to me at the second (I hope to retire young, not tomorrow). How should I factor in the time it takes to run a successful real estate investment? If I average the hours I spend on it each month, and multiply that by my average wage/commission/salary at my jobs, and add those figures to the cost, than real estate becomes much worse of an investment. But should I be calculating it that way? This is time I would most likely not spend working (I cannot work ALL hours of the day...I already push 55ish hours a week on average).

Should I only be calculating a percentage of my typical work pay? I don't actually lose any money, just time. It isn't very hard work either (occasional calls asking if anything needs to be fixed, picking up a rent check, spending time on paying bills, very rare maintenance, etc.).

3/5/2008 1:12:38 PM

Quote :

"I gained in diversity, and instantaneous net worth, but I reduced my liquidity."

Your net worth stayed the same and no additional diversity was gained.

Quote :

"Is it worth it to get a more liquid investment that performs worse?"

I thought you were looking at investing in the market? Aside from cds, bonds, annuities, and funds with large loads, liquidity should be the same. You should also avoid the previously mentioned investment vehicles do to their low return.

Quote :

"How should I factor in the time it takes to run a successful real estate investment? But should I be calculating it that way? Should I only be calculating a percentage of my typical work pay?"

This is a little more subjective. I could make good money playing poker extra every week, but I choose not too because I already work a lot and my free time is quite valuable to me. If you do not have anything to take up your free time and don't mind having very little of it then obviously the hourly rate you'd need to be making would be far less.

3/5/2008 1:30:21 PM

Quote :

"Your net worth stayed the same and no additional diversity was gained"

Not true. My net worth increased because I negotiated the purchase at roughly 15k under market value (at the time...in theory, value finders still claim it is appreciating, albeit slowly)

My diversity was increased because now I have two real estate investments instead of one. It isn't a BIG improvement, but still two stocks is better than one right? If I had 15 real estate investments (never mind I can't afford that), some of them commercial rental properties, others residences, I would still have a diverse portfolio. It would just all be in the same investing sector, right?

3/13/2008 2:03:05 AM

Quote :

"My net worth increased because I negotiated the purchase at roughly 15k under market value"

First off if a house appraises for 200K but they can't sell it for that, I'd hardly consider adding 15K to my set worth if I buy it at 185K. Even ignoring that statement, prepaying tens of thousands of dollars had nothing to do with you getting the house at 15K under market value. If you got a good deal on the house, great, but there's no correlation between that, and prepaying your mortgage.

Quote :

"My diversity was increased because now I have two real estate investments instead of one."

Did you completely forget the topic at hand? Once again, we were discussing you prepaying your mortgage. Buying a second property increased your diversity. Prepaying your mortgage for that second property did not.

3/13/2008 9:07:06 AM

But if I had not paid down the principal of my mortgage, I would not have qualified for the loan for the next property. My income to debt ratio would have been too high. Does that not mean that my prepayment directly influenced my ability to negotiate a good deal, and to add an additional property to my portfolio.

Incidentally, the house next to mine has fewer rooms, a large master suite is the only upgrade, and less square footage, and stayed on the market for two days. It sold for 198k, where I bought mine for 188 - 5k in closing costs. My seller was more motivated I guess.

[Edited on March 13, 2008 at 2:36 PM. Reason : .]

3/13/2008 2:31:44 PM

sorry just wanted 1600 posts

3/13/2008 2:37:01 PM

Quote :

"But if I had not paid down the principal of my mortgage, I would not have qualified for the loan for the next property. My income to debt ratio would have been too high."

How is having a 135K mortgage with $1,000 worse than having a 120K mortgage and $16,000 in the bank?

[Edited on March 13, 2008 at 2:44 PM. Reason : ]

3/13/2008 2:43:58 PM

Quote :

"Anyway, by the end of 2008 I will be retired and I will come back to this thread and show what’s up"

How's retirement, bro.

12/29/2013 9:09:50 PM

all aboard the wayback machine

12/29/2013 9:15:23 PM

- - - - - - - - -

I guess I don't know as much about 401ks as I should... but what is the point of a company offering a 401k plan, if they do not contribute to it? You can get a 401k from any bank... so why would a company have a plan if they don't contribute? Am I missing something?

3/20/2014 1:37:59 PM

do they do any type of profit sharing?

perhaps they just do it to allow it more convenient for an employee to contribute through deductions from their paycheck or to be able to list it as a benefit

3/20/2014 1:50:26 PM

I guess the ease of payroll deduction must be it. They contribute nothing at all.

3/20/2014 2:29:34 PM

Quote :

" You can get a 401k from any bank"

No, you can't.

3/20/2014 2:34:36 PM

you know what I mean

3/20/2014 2:41:02 PM

you can contribute 10k more per year to a 401k

3/20/2014 2:43:36 PM

Actually, I have no clue what you mean.

3/20/2014 3:23:31 PM

I guess you are purposefully being obtuse.

Here's the point:

https://www.google.com/search?q=401k&oq=401k&aqs=chrome..69i57j69i61.1610j0j1&sourceid=chrome&espv=210&es_sm=93&ie=UTF-8#q=open+401k

no employer needed.

3/20/2014 3:42:50 PM

401k /= IRA

3/20/2014 3:49:54 PM

You cannot enroll in a 401(k) without first having an employer, unless you yourself are the employer. - See more at: http://wiki.fool.com/Can_I_Invest_in_a_401(k)_Without_an_Employer%3F

[Edited on March 20, 2014 at 3:54 PM. Reason : ]

3/20/2014 3:52:46 PM

Wait, you can get a 401(k) without an employer plan?

3/20/2014 4:13:20 PM

Where can I put my money where my wife cant spend it. Like auto draft on payday.

12/10/2015 4:20:46 PM

a lot of employers are set up to direct deposit your paycheck into multiple accounts. may want to check with your payroll dept to see if that's a possibility.

12/10/2015 7:27:32 PM

^

12/10/2015 11:13:23 PM

or maybe talk to your wife about not spending money and make a budget.

12/11/2015 5:27:55 AM

this is TWW. talking to girls is usually the last option.

even if you are married to them.

12/12/2015 2:31:11 PM