Monday, July 21, 2014

walking away from equity


WALKING AWAY FROM EQUITY

Walking away from an investment is never easy, but the issue is when it is so difficult you decide not to walk away.  You think you are staying in the frying pan out of the fire, but this does you no good if someone flips over the pan.  Walking away is a strategy in and of itself, one I’ve never had a problem with.  I wonder if it has to do with growing up in the country?  I know it’s a cliché, but when death is normal you definitely get an understanding you can’t hold on to everything.  Of course, I’ve also never had a huge attraction to money past a use as a tool, so there is the ease in which I don’t earn much and then don’t much care what happened to the last paycheck.  I don’t want to see it go to waste like to some prick landlord that jacks rent up 10% a year and gives a crap less how his customers can afford it than if that is the correct amount the market will bear.  But once I put it to good use it is over and done to me.  I don’t look back and say, gee, I wish I had that $500 I gave my daughter when she needed a start on tuition, or the same amount I spent on Russian ammo.  I say, I’m happy to be buying her forgiveness ( you can’t buy love, so I’m trying for redemption ) and I’m happy I don’t have to worry about reloading supplies now.  And I also don’t look back and regret bad investments, as long as I’ve moved on to a better place.

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In Florida I moved from renting an apartment to buying my own mobile home- a tax return bought an older model.  So old the pipes were not copper or plastic.  It was a great little place, under a giant tree so we didn’t need air conditioning, and since it was paid for it cost me just lot rent at $175 a month.  Then I got the silly notion stepdaughter needed more space ( her room was a half the screen porch walled in ) and we traded in and started making payments on a bigger unit in the same park.  So what happens, of course?  The one bitch moves away from home and other stops working so I have to make home payments myself while my child support payments and taxes take 60% of my pay.  The wife starts working again, we both get tax returns and put three grand down on a $12k mobile in a better park and walk away from the current home losing all equity.  And then the wife loses the next job and once again we are screwed.  After holding on as long as possible, having roommates even, it just isn’t working and we move from Florida.  A good ten grand lost in mobile home payments.  I overpay for a travel trailer in Carson, then we move in to a bigger one I buy for cash from a 401k check that was manna from the post office from my old job I didn’t even know we had.  When we tried to move to Elko I gave that trailer away- but lesson learned.  Between the two I only lost $4k equity.  I could make a long list of other poor investments.  We all make them, mostly because we can.  Because we are in living amongst a surplus even if it isn’t what it used to be.  But life should be a journey, not a pile of toys.

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12 comments:

  1. I debating if I should cash in the 401k right now for some junk land. It's hilly, covered with trees and the 401k isn't much. It would be nice to have a place of my own, even if it is a drive.

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    Replies
    1. Well, just look at the purchasing power of your dollar over the last ten years. What do you think that 401 is actually going to buy five years hence?

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    2. Exactly why I tell everyone to turn their cash into hard goods (best is preps but even fancy toys could be used later, electronically recorded dollars sitting on some banks hard drive? - worth only half what they are today at best) and / or memories that you will be able to treasure. The problem is saving up the cash for the bigger purchases- Land, Shelter, Equipment, Tools, Etc.

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    3. That's why you need to minimize the savings needed. My land and shelter cost half a new, cheapest, car. Course, I wouldn't recommend here to most.

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  2. I can relate to your experience with the travel trailers James, as I made a similar mistake more recently.

    I wanted out of the main house and away from my family pretty badly, so I went out and purchased one the first forms of alternative housing that I came across, an RV. Though I live in a rural area, I wasn't really coming across trailers of the size that I wanted (Around 30') very often, so when the RV came up, I snapped it up.

    Big mistake. First off, in addition to having to deal with smog, which can be an absolute nightmare in a state like CA, you also have a vehicle that is difficult to do any repairs on yourself, due to the cramped engine compartment. Also, deduct 5' to 6' of usable space that's swallowed up by the cab. A 25' trailer would have as much space as my 30' RV. My old 28' trailer that I had a long time ago would be roomier. The thing is, I never need to move it, and the one time that I ever will, would require smog, registration, insurance, etc. Compared to a one time truck rental for a travel trailer.

    So for me, an RV was a mistake that I will not repeat. In areas of loose zoning (Probably many rural areas outside of CA) a mobile home is probably the cheapest, and best alternative, unless you need the ability to move easily should the occasion arise?

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    Replies
    1. buying a crap trailer is just like getting neighbors from hell in an apartment. It's going to happen- just walk away from the wasted money

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    2. Better than a trailer or an RV would be an old school bus. Built on a truck frame they are tougher and cheaper; customize to your needs. They are even a great way to move cross country; fill with your crap and sell when you get there or use as a storage unit.

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    3. AND, much easier to bury, needing less support

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  3. I recently sold the home we'd lived in for 25 yrs and moved into a mobile home park.Might not make sense to begin with,so listen.I bought the home for 50k,just sold it for 150k.Bought the mobile for 2500,yes,it's a fixer upper,but 500 sq feet more.I cleared 100k profit on the home in equity,it went into an annuity fund.I receive 1000 a month from that,and my wife is on disability,so I really never need to work again!Sure,there is still lot rent,same as a mortgage,but if I just up and left,I still have the huge hunk of change.Granted,I lost my huge garage and workshop,and a 55 plus park is pretty boring,but now I'm sitting on a guaranteed income I can invest in more interesting stuff.

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    Replies
    1. As long as you realize it is a crapshoot as to whether it disapears or not

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    2. sure,but if my dollars go to crap,so will everyone else's!

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    3. Not dissing on the plan- smarter by far than 99% of the population.

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