money....its all relative

twobone · twobone's Garage

I had to laugh to myself yesterday.....

I'm moving houses and I added up the cost of real estate commission, gov't taxes, legal fees, moving, new house renos, etc. etc..... and the grand total will be around $40,000+ US.

Its funny how normal that sounds to the average family home owner...

How different it would be if I instead pulled up in a Turbo Cab. Those same people would think that I've gone off the deep end.

Just an interesting observation.

pwd72s · 10-27-2004, 09:25 AM

Too true...Cindy & I thought of moving from here...until we factored in the moving costs...you could buy a pretty nice 911 for the same money.

Paulporsche · 10-27-2004, 09:32 AM

I hope your budget includes a killer garage!

Rick Lee · Rick Lee's Garage

You can live in your car, but you cannot drive a house. Get the turbo cab!

ajackson · 10-27-2004, 11:18 AM

I'm not disputing your point, but spending money on real estate is almost always a good investment whereas spending money on a car is almost always a bad investment.

The way things are going here in CA, spending $30k on a house is like putting $40k in the bank. Putting $30k in a car is just spending money for fun.

Of course look at me, first set of money I saved bought the porsche. Second set of money was a house downpayment.

Rick Lee · Rick Lee's Garage

Hey, I just closed on my second house last week and I think the price has already climbed enough to buy me another Carrera. My first house's equity is what paid for my 993 and plenty more. I agree, real estate is an excellent investment. But somehow my houses have never made me smile as much as my Porsches have.

Type911 · 10-27-2004, 11:49 AM

Quote:

Originally posted by ajackson
I'm not disputing your point, but spending money on real estate is almost always a good investment whereas spending money on a car is almost always a bad investment.

I can relate. I just bought some acreage, when it was all said & done I thought...damn I could've bought a new Turbo 911 for what I just spent.

Hopefully the equity at re-sale will pay for the Turbo

arcsine · 10-27-2004, 01:41 PM

I am OK with the money I have in the house but I would of be very happy if I could have even half of the commissions back from selling it. $30K split for the two agents when I struggle to see what they did to earn it is hard on me. $15K could turn into a neat car pretty easily.

ajackson · 10-27-2004, 01:52 PM

If real estate angents didn't earn their comissions, you wouldn't have used them. You could have lowered your asking price $15k and sold the house yourself to get half their commission.. They aren't like escrow where you basically have no choice to pay them when selling.

That said, it's hard to swallow when you made x amount of dollars on the sale of your house and you get a check for x/3 dollars...

Jack Olsen · 10-27-2004, 01:55 PM

People always used to tell me I was throwing money away by not owning a home. I spend more each year on just property taxes, now, than I ever did on rent.

You buy the house because you have to (for tax reasons, mostly). You buy the Porsche because you want to.

The financial windfall from my house will probably never end up in my pocket -- at least not while I'm young enough to enjoy it. More likely is that if I have children, they'll get a big check when I die and the house gets sold.

The Porsche I get to enjoy every day.

ajackson · 10-27-2004, 02:06 PM

The problem I have with housing prices is that they are getting out of most peoples reach. I bought a house jest before the prices went out of my reach. If I was renting right now, I simple could not buy a new house now in this area. Prices are going up way faster than inflation and probably faster than you can save money for a down payment...

For me, it was kindof a now or never decision. Buy a house or rent until you want to move out of the area.

It's also incredible nice to finally have a garage to work on my car in...

ajackson · 10-27-2004, 02:08 PM

Jack: the way I look at it, it is also retirement plan. Even if you don't save anything while you are young (which isn't smart), you could probably sell your house when you retire and have enough to get something in a cheap community and live off the rest.

Bill Douglas · 10-27-2004, 02:41 PM

I see it as sensible money and silly money. Silly money for booze, drugs, women and the 911.

Actually... Gulp, you would think I'd been on drugs with having bought the house next door for over half a million. But it does give me three houses right on the beach front to form a 1,000 square meter block of land.

I'm going to sell off a place I don't like (another beach property elswhere) and put the equity into this better place, which will drop the mortgage to such a level that the rent looks after it. So it won't cost me a cent personally - yay.

RoninLB · 10-27-2004, 03:59 PM

Jim Morrison wrote, "I want my kicks now before this whole $hit house burns down."

azasadny · azasadny's Garage

I'm spending about $80,000 to add 1000 sq ft to our Colonial. I never thought I'd ever spend that much on a project, but that's what things cost today. My 1250sq ft home will be about 2300 sq ft when we're done, but it will have a 1st floor bathroom, extra bedroom (for my ailing grandfather), family room, extra closets, etc... My house was built in 1936 and doesn't have any insulation, but it sure will when this is done!!

pwd72s · 10-27-2004, 05:15 PM

Quote:

Originally posted by RoninLB
Jim Morrison wrote, "I want my kicks now before this whole $hit house burns down."

I agree with this quote...now that I will turn 61 next week! How old was Morrison when his kicks ended? Mine's a boring little life, but I'm pretty much still enjoying it. Real estate as an investment? Been there, done that. Today, I prefer investments that don't deliver the landlord hassles. The only real estate I now own is what I live on. Jack? Pencil it out...the home ownership tax deduction is a scam...dunno your tax bracket, maybe 28%? This means the mortgage interest deduction saves only 28% of the interest you pay on your mortgage. Something the nice realtor fails to mention, as he or she works for the nice commission. These offered lessons were learned the hard way...Then I married a bean counter. She manages our investment money. Why not? She's better at it, and "works" for free. Good luck to all, Paul

Chuck Moreland · 10-27-2004, 07:46 PM

I live by a simple ratio that has served me well. It's the 10:1 ratio.

That means your house should be worth at least 10x your car. You have a $200k house, you can have a $20k car. $1M house, $100k car. No more. Own both, mortgage the house, pay cash for the car.

It's based on the idea that the house is an appreciating asset, the car a depreciating one. Keep the ratio in line and time will make you a wealthy person.

cab83_750 · 10-27-2004, 08:07 PM

Quote:

Originally posted by Chuck Moreland
It's the 10:1 ratio.

That means your house should be worth at least 10x your car. You have a $200k house, you can have a $20k car. $1M house, $100k car. .

I needed to hear/read this. This confirms that I am entitled to a supercar, like the new Ford GT. I have no car payment, very little credit card, no student loan,

I tell myself, "I am entitled to one irresponsible action in my life."............ until I get my hugs and kisses from my 2 kids. Then I do a Kamikaze drive to Earth realizing that they might need the financial support soon.

I guess my 'reality' ratio is bad: 100:1!

p.s.,

Even with 2 kids, very happy, content and complete man I am! heehah!

Chuck Moreland · 10-27-2004, 08:23 PM

Don't forget. That number is the aggregate of all your cars.

R. Aster · 10-28-2004, 06:49 AM

Quote:

Originally posted by Chuck Moreland
I live by a simple ratio that has served me well. It's the 10:1 ratio.

That means your house should be worth at least 10x your car.

I've been using the 2:1 income:car ratio most of my life -- your car should cost half of your yearly gross. That worked pretty well for all the cars in my sig after the TR3. Now that I do the math, looks like I actually hit about 60% -- WTF, you only live once.

At the moment my formula would get me into Carrera S, but it ain't gonna happen. Can you say "Three kids who want to go to college?" Sure you can.

For you youths out there (I'm mid-fifties), I would say, within reason, screw the money and get the car. Love my Targa, but I got more joy out of my TR3 and Z/28 when I was 18 / 19 years old than either of my Porsches brought me in my late 30s. And don't get me wrong, I couldn't sleep the night before either Porsche, but I couldn't sleep for days before my first couple of cars.