Posted on 03/07/2024 9:26:22 AM PST by where's_the_Outrage?
we paid our condo off ten years early im so happy we did
Basically what he’s saying is if you can’t afford a home, you shouldn’t buy it. The snowflakes can’t accept that. This is one of the reason home prices are though the roof. Today’s generation can’t do without.
Interest rates are liwer than than the 80s when I paid off my 30 year loan in 12 years. Every tax return went into my house. I put two kids thru 13 years of college, retired at 55 and only made 50k plus for 9 years. I saved for retirement and have more income the year I retired than any year working.
I never bought a single bottle of soda, or ahopped at a 7-11 type store. I paid myself 20% of every paycheck.
Its how you save.
us too
It may be “sound” advice, but it isn’t “practical” advice.
Using Ramsay’s formula, only 25% of Americans could afford an “average” home in today’s market. That is after, according to his formula, they save the $80K downpayment.
If they were able to sock away 10% towards a home...this doesn’t include the 10% you are ALSO supposed to be socking away as a rainy day fund AND the 10% you are supposed to be socking away for your retirement AND the 5% you are supposed to be socking away for your kids college fund. This, and taxes, turns your $135K into about $60K. You could do okay with that in New Mexico. It would suck to try to live on that in Florida.
While I love Dave Ramsay, I remember my financial planner and my accountant both being dismissive of him. There are some people, in some parts of the country, in some circumstances, who can follow most of his advice, I was told.
There’s nothing wrong with the use of “median” there unless I’m completely missing something. It is used because of mean or average because a relatively small number of high outliers distort mean upwards. Median is a better measure of central tendency except when a gaussian distribution is being measured.
And the thing measured is valuation, not sales.
A person has be clear-headed about what he’s doing — is he buying a house for lodging, or as an investment. If he wants his own place to live as soon as possible and the most desirable as possible, then buy the best he can afford with as long a mortgage as it takes, and enjoy. If interest rates drop later, he can always refinance. If he wants an investment then buy the fixer-upper, fix it up and flip it. Trade quality of life for financial gain. But right now it’s very hard to have it both ways unless he has a large cash position.
Bottom line ... One size shoe doesn’t fit all feet.
Lot of people need to hear that kind of stuff over and over.
Thank you for saying that. You took the time to make the comment I would have made had I thought the poster you responded to was interested in a different opinion.
I listen to Dave daily...and I also agree its sound advice.
The problem I would be facing if I was in the market for a home though....is the possibility of homes getting more and more expensive in line with my saving more and more money....making me basically on a savings treadmill for an ever increasing home price.
Even according to Dave Ramsey...he sees no dip in home prices, and that they will continue to gain in value with no end in sight.
With that in mind...jsut to buy a home that would comfortably fit my family...I might violate his advice with all this in mind.
I refinanced into a 15 year conventional when rates were low. Then took all the money I saved and added it back on to my mortgage payment, so I would pay it off in well under 15 years.
I keep thinking I should pay off my mortgage entirely before retirement. But then I think I can get a higher interest rate just putting it into a CD.
The problem is that millions fail with the discipline necessary to follow the advice
“Another option that I used is to get a 30 year mortgage and pay it off early by doubling payments. You have some control over the amount of interest paid.”
My recommendation is 20% down with a 30 yr mortgage, paid every two weeks.
Do not pay what a realtor claims you can afford. Figure out what you can afford and still sleep at night, and then downsize from there.
Do not take out home equity loans for any reason. If you kiddie wants to go to college, then tell them to get a job and start saving.
Lastly, refinance as interest rates drop. (Need to do the math to determine the break even point for the cost of refinancing.)
FYI: We purchased our current house in 1993 for $240,000, 20% down, with a 30 year mortgage at 8.125%. We refinanced in 2012 @ 2.875% for 15 years (and did not refinance more than the balance due). Our monthly payment dropped by ~$900. Although we can easily pay off the balance (~$38K), I don’t see the point because the interest on our Vanguard Money Market Account is nearly twice the interest on the mortgage.
I watch the videos from CharlieBo313, where he drives through hoods thoughout the country. Amidst the squalor and trash, one thing I notice is that the cars are nice.
That’s true, and I’m certainly not saying that our society is in good shape.
But if you can’t buy a home without incurring excessive debt, you’re far better off not buying a home. (Society is what it is. Owning a home is generally better than not owning a home, but not if you can’t afford it!)
Of course not. If your average “boomer” doesn’t go straight from healthy living to the grave, then they usually have years of mixed care from assisted retirement facilities to skilled nursing, or chronic care and/or extended hospice. Nursing homes charge some serious $$$$$.
“I read an article recently that Gen Xers and millennials are in line to inherit 50 TRILLION DOLLARS from us Baby Boomers.”
My daughter’s in laws just gave her and my son in law $36K.
My daughter is 39. My son in law is 40. Double income no kids
My son in laws parents are both 80. They have more money than they know what to do with. So, they gave the maximum amount they could legally to both kids.
So, I would say that statement is true. Baby Boomers have accumulated large amounts of wealth that many will never spend in their lives.
Each person is in competition with other members of his age cohort. Higher paying jobs go to more accomplished people.
Yet the GOVERNMENT RUN education system instructs their students to be equally mediocre.
Since no one stands out, employers pay as little as possible for talent because mediocre skill levels are all that are available.
If students would realize they are in competition for their way of life, they would reject the exhortation to mediocrity.
But the lure of more "snow days" is irresistible.
Agreed.
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