Gold collapsing. Bitcoin UP.

[wachtwoord]

if i rent for 25years i end with nothing.
if i buy and pay mortgage for 25years i end with a house.

who in there right mind would rent?

Me.

Renting means not having to put a huge portion of your net worth (or in most peoples cases, more than their net worth, so with leverage) in the stupid asset class real estate while at the same time being not diversified at all. Further all houses here are seriously overvalued (100-200%) because of government intervention (mortgage interest is deductible from income taxes) which I predict is going to be reduced until it can be abolished bringing the housing prices back to what should be normal. Finally, when you own a house you have zero flexibility. I really don't want to own a house thank you very much.

[1714216104]

1714216104

[1714216104]

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[justusranvier]

Finally, when you own a house you have zero flexibility. I really don't want to own a house thank you very much.

I agree with this theory, and I've been pushing it increasingly further over time to see how far I can go.

[Cortex7]

Finally, when you own a house you have zero flexibility. I really don't want to own a house thank you very much.

I agree with this theory, and I've been pushing it increasingly further over time to see how far I can go.

I'm sure landlords think your theory is absolutely great!

[justusranvier]

I'm sure landlords think your theory is absolutely great!

Don't have one.

[Cortex7]

I'm sure landlords think your theory is absolutely great!

Don't have one.

I didn't imply that you did. But if you have a roof over your head and are rent free then you're onto a good thing, good luck to you!

[zeetubes]

Finally, when you own a house you have zero flexibility. I really don't want to own a house thank you very much.

I agree with this theory, and I've been pushing it increasingly further over time to see how far I can go.

I've been traveling for over four years. I was pretty sure I'd get bored with it after six weeks but I guess that didn't quite pan out. I'm terrified of the day when I have to stop. It will be quite an adjustment.

[Erdogan]

Investment in housing is very complex. You have to consider

Inflation
The housing price development
What living standard you want to have
Your life situation, including risk of change
Your job location, including risk of change
maintenance, sudden reparations
ownership taxes
water, energy, waste removal prices
Reserve cash
Lease out a part, taxes connected to lease.
capital gains tax, tax relief, often depending on length of ownership, dependent on buying a new house
How much do you want to save
Flexibility
Refinancing, taking out the gains in the form of a new loan

I am sure there are more.

Normal situation is to save in housing, mostly as a defense against inflation.

With bitcoin, you have defense against inflation, plus low cost of ownership, plus liquidity, and more.

[Torque]

if i rent for 25years i end with nothing.
if i buy and pay mortgage for 25years i end with a house.

who in there right mind would rent?

If renting is a fraction of the cost of buying, you could use the extra money to enjoy a higher standard of living for those 25 years.

Maintaining a home can also be quite expensive (ignoring the purchase cost).

but living in a really expenvice house =  higher standard of living

Adam, I'm starting to wonder exactly how old you are.  Because if you have lived life long enough (to at least age 40-ish), and have spent some amount of time in an "expensive" house, you would understand the realized absurdity of that statement.  When you experience it for yourself, you'll finally "get it".

i have a tiny condo

wana trade?

i want to "get it"

BS a nice house doesn't improve standard of living, BS

There is nothing wrong with owning a house.  Just buy an inexpensive one with low upkeep, and as work hard and as fast as possible to own it outright.  Just like 6-7 year financial loans for cars are pure evil, so are 30-year mortgages.  It doesn't matter what great interest rate you get from the bank, they and the rest of life OWNS you if you are locked into high debt.  The first 10-15 yrs of a mortgage is pretty much all interest paid back to the bank first, and nowadays most people don't stay in their first or even second home nearly that long.  Not to mention all the "upgrades" and sunk/hidden costs that they never recoupe.

I would take a condo that I owned outright, over a financed house that was owning ME any day.

[Carlton Banks]

One never truly owns the land or the dwelling. I  paid off my home years ago yet I still fork over huge amounts.

I think there is a clause where under the military act they can always just "take your land" for the "good of the country" at no cost. So yea you never really own it, they just make you feel like you do

There's possibly even more truth to this than is acknowledged.

The law governing land/property ownership is an interesting topic. The government typically owns the registry, and people think of that as the list of plots, but only as a practical reality. You can own the title to any plot and all structures built on it, but this only gives you the right to live there above that of the rest of the serfs.

People say "well, in practice you own it, title and registry are just legal technicalities". This is true given the present title legislation and world-economic circumstances, but what happens when sovereign bond armageddon strikes? According to sovereign bond armageddon cheerleaders, the central banks and governments become bankrupt, as the debtor can't pay and the creditor now has no assets. Rainbows and unicorns ensue, everyone is free of debt and government and central banks go away muttering curses. I wonder if the central banks would ask for the land registry instead? If the debts also cover assets up to, say, the legislature, the police/army/secret service infrastructure, trunk communications backbone, roads/transport infrastructure, energy production facilities...

Even the most pessimistic dytopia merchants don't even paint a picture as bleak as this, but I can't see the establishment all giving it up to live as benign retirees. It's tempting to suggest that this past century has gradually evolved into a massive leveraged buyout of entire land masses. Lets hope all those birth certificates in the records offices can't be reinterpreted as government assets (or contracts of ownership). Think happy thoughts everybody!  

[adamstgBit]

if i rent for 25years i end with nothing.
if i buy and pay mortgage for 25years i end with a house.

who in there right mind would rent?

If renting is a fraction of the cost of buying, you could use the extra money to enjoy a higher standard of living for those 25 years.

Maintaining a home can also be quite expensive (ignoring the purchase cost).

but living in a really expenvice house =  higher standard of living

Adam, I'm starting to wonder exactly how old you are.  Because if you have lived life long enough (to at least age 40-ish), and have spent some amount of time in an "expensive" house, you would understand the realized absurdity of that statement.  When you experience it for yourself, you'll finally "get it".

i have a tiny condo

wana trade?

i want to "get it"

BS a nice house doesn't improve standard of living, BS

There is nothing wrong with owning a house.  Just buy an inexpensive one with low upkeep, and as work hard and as fast as possible to own it outright.  Just like 6-7 year financial loans for cars are pure evil, so are 30-year mortgages.  It doesn't matter what great interest rate you get from the bank, they and the rest of life OWNS you if you are locked into high debt.  The first 10-15 yrs of a mortgage is pretty much all interest paid back to the bank first, and nowadays most people don't stay in their first or even second home nearly that long.  Not to mention all the "upgrades" and sunk/hidden costs that they never recoupe.

I would take a condo that I owned outright, over a financed house that was owning ME any day.

agreed,
i could try to argue that as long as the house appreciates faster than the interest rate it make sense to borrow like mad and buy a massive house, but i don't actually believe that...

[cypherdoc]

housing is just like any other asset you may choose to invest in.  you gotta be smart about it.

if you are, you'll reap the benefits.

[cypherdoc]

crap!

[rocks]

House prices have become monetised over the last 1-2 decades as the options for good savings vehicles (store of value) immune from inflation, tax grabs, regulations (and sundry other rent-seeking) have diminished. As has collectable art, vintage vehicles, antiques, etc. The fiat mis-management has manifest itself in innumerable ways that will only become fully visible when looked back from a stable economy at some point in the future.

Exactly this. What always strikes me about the buy vs. rent discussion is those who say "always buy" are not taking into consideration the reasons housing has done so well.

For the lower and middle classes housing has served 2 roles, it has acted as the ONLY inflation protected asset to counter the FED's printing press and has acted as the ONLY method to leverage and benefit from the FED's financialization wave to expand credit everywhere (which enabled housing to grow faster than inflation). Additionally, for the government housing has acted as a forced savings plan.

Whether or not housing (in general) will continue to be a smart investment, largely depends on your views regarding the government's ability to continue these trends. Personally I think the expansion of credit cycle is largely tapped out, and the FED will try to only use the printing press to counter the loss of credit growth. In this scenario renting and saving the extra monthly savings intelligently can do very well compared to leveraging 5x your net worth in a single asset class.

My father in law is a multi millionaire having bought primarily commercial real estate starting back then in LA.  Now his kids get a handsome annuity check monthly. It's amazing how long these trends keep going.

Great for him, I hope he did it by understanding the new environment he was in and leveraging that to the hilt.

My worry is so many in the following generations assume these trends will go on forever and blindly leverage to the hilt in housing. Most of my peers have done so, they are so "house poor" with CA prices that they have zero ability to create savings outside of housing. This is bad IMHO.

Lastly, if you believe Bitcoin will succeed as an escape from centralized money, bringing to a dead stop central bank expansion of the money supply (no more printing and no more bailouts of leveraged banks), then housing in terms of price:income will NOT do well compared to today's valuations.

[cypherdoc]

oh crap!

RGLD, the premier gold royalty company:

[cypherdoc]

House prices have become monetised over the last 1-2 decades as the options for good savings vehicles (store of value) immune from inflation, tax grabs, regulations (and sundry other rent-seeking) have diminished. As has collectable art, vintage vehicles, antiques, etc. The fiat mis-management has manifest itself in innumerable ways that will only become fully visible when looked back from a stable economy at some point in the future.

Exactly this. What always strikes me about the buy vs. rent discussion is those who say "always buy" are not taking into consideration the reasons housing has done so well.

For the lower and middle classes housing has served 2 roles, it has acted as the ONLY inflation protected asset to counter the FED's printing press and has acted as the ONLY method to leverage and benefit from the FED's financialization wave to expand credit everywhere (which enabled housing to grow faster than inflation). Additionally, for the government housing has acted as a forced savings plan.

Whether or not housing (in general) will continue to be a smart investment, largely depends on your views regarding the government's ability to continue these trends. Personally I think the expansion of credit cycle is largely tapped out, and the FED will try to only use the printing press to counter the loss of credit growth. In this scenario renting and saving the extra monthly savings intelligently can do very well compared to leveraging 5x your net worth in a single asset class.

My father in law is a multi millionaire having bought primarily commercial real estate starting back then in LA.  Now his kids get a handsome annuity check monthly. It's amazing how long these trends keep going.

Great for him, I hope he did it by understanding the new environment he was in and leveraging that to the hilt.

My worry is so many in the following generations assume these trends will go on forever and blindly leverage to the hilt in housing. Most of my peers have done so, they are so "house poor" with CA prices that they have zero ability to create savings outside of housing. This is bad IMHO.

Lastly, if you believe Bitcoin will succeed as an escape from centralized money, bringing to a dead stop central bank expansion of the money supply (no more printing and no more bailouts of leveraged banks), then housing in terms of price:income will NOT do well compared to today's valuations.

i agree.  he bought these properties back in the 60's & 70's using only his cultural perspective that "property (RE) will always do well".  auspiciously for him, that was the exact RIGHT time in US history to have this attitude.

interestingly, if Bitcoin only holds steady from here, i will have done better than him.

edit: for alot less work and headache. such is the power of the network effect of money.

[cypherdoc]

mining etf's set to break support yet again following SLW, RGLD and silver.  this would be disastrous.

with just a 5% move of the $8.2 trillion gold market moving to Bitcoin, we could ignite the next logarithmic ramp.

[cypherdoc]

thing is, u can see it happening, slow motion.  esp w/ this thing going on:

[zeetubes]

"interestingly, if Bitcoin only holds steady from here, i will have done better than him.

edit: for alot less work and headache. such is the power of the network effect of money."

Cypherdoc, because he is/was an astute investor, and given his son in law can advise him better than most about btc, what percentage of his portfolio is now invested in bitcoins?

[cypherdoc]

ok, just had to post this pic.  that's badass:



http://www.extremetech.com/extreme/188479-astronauts-find-living-organisms-clinging-to-the-international-space-station-and-arent-sure-how-they-got-there

[klee]

ok, just had to post this pic.  that's badass:



http://www.extremetech.com/extreme/188479-astronauts-find-living-organisms-clinging-to-the-international-space-station-and-arent-sure-how-they-got-there

To da moon