GA "needs"

KFD said:
Yeah, that's a great idea. Live in a ghetto house and then when you die leave all that cash you saved for someone else to spend.
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Huh? I thought we were in a thread about GA needs. As someone who funds aircraft ownership squarely on the pointed undershooting of my housing costs, I'd consider your premise is a false dichotomy. Why would you presume I'd not be able to spend the money saved by undershooting housing? Do you make a living off real estate transaction costs? Didn't mean to hit a nerve with the remora comment....
 
KFD said:
Yeah, that's a great idea. Live in a ghetto house and then when you die leave all that cash you saved for someone else to spend.
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My house is within a few % of what I make/year and I live nowhere near a ghetto. Unless you consider 1500sf plus a 24x48 workshop on an acre in a low/no crime area the ghetto. In that case, well if we want to make up our own definitions of things...
 
EdFred said:
My house is within a few % of what I make/year and I live nowhere near a ghetto. Unless you consider 1500sf plus a 24x48 workshop on an acre in a low/no crime area the ghetto. In that case, well if we want to make up our own definitions of things...
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How many people? 1, 2, 6, 10? I don't know your circumstances.
 
Just me - but why would it matter if I had kids here or not. The property is what it is, and I make what I make regardless of the number of people living in it.

I do have another 1000sf unfinished upstairs that I never bothered to finish after the house fire because it is just me
 
hindsight2020 said:
Didn't mean to hit a nerve with the remora comment....
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No nerve was hit :D My first house had a mortgage somewhere between 3 and 4 x my pretax annual income back in 1996. As of today I'm in my third house since then and have no mortgage. In fact I only started flight lessons after I had paid off my mortgage fully, and fully funded my kids college funds as well as my retirement. Then I permitted myself to waste money on this crazy hobby. :D Point is that I over extended myself back 20 years ago, and I have NO regrets because I can never get those years back. As it is I have great memories of living in a respectable house in a decent neighborhood and starting a family there.

I know people who do the opposite and to be honest I don't get it. They will die with a bigger bank balance than me and what is the point? They will die knowing they could have lived better but are leaving a bunch of money to others who didn't work for it.
 
azure said:
I don't recall exactly when - might have been 6 months ago, might have been longer. It was a major slump, made the national news in a big way. She planned to fire her financial planner and ask the firm for someone else, but I'm not sure what came of that. Yes, I told her the best thing she could do is ride it out... not that I'm any kind of expert since I don't play the stock market (not with past savings, anyway... my 401k invests in funds that are linked to it though). We haven't talked about it for a while so I'm not sure what she did. But my understanding is that even if she hung on, whether and how much she recovered depends on exactly what stocks she holds. Is my understanding incorrect?
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Sure it depends on which stocks she holds, or even what industry the companies are in. That's why they tell you to diversify...

But in general, stocks have always recovered, so far.
 
EdFred said:
Just me - but why would it matter if I had kids here or not. The property is what it is, and I make what I make regardless of the number of people living in it.

I do have another 1000sf unfinished upstairs that I never bothered to finish after the house fire because it is just me
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Well then that is f'ing palatial in your case. I could live in 300sf if it were just me. Add a woman and kids though and you have to add a zero and a multiplication factor too...
 
KFD said:
Well then that is f'ing palatial in your case. I could live in 300sf if it were just me. Add a woman and kids though and you have to add a zero and a multiplication factor too...
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Which is why I haven't finished the upstairs yet. But it's really not that roomy due to the layout. No room is wider than 12'.
 
Everskyward said:
Sure it depends on which stocks she holds, or even what industry the companies are in. That's why they tell you to diversify...

But in general, stocks have always recovered, so far.
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Well, the *average* recovers. But by definition roughly equal numbers do worse than the average, as do better, depending on how the average is computed. Your chances of having mostly worse than average holdings won't be small unless you have a large number of randomly selected holdings. As I understand it, that's what it means to be diverse, and the more diverse your portfolio is the greater your resilience when market turns down. The more you have to invest, the easier it is to have a sufficiently diverse portfolio. I think (as I said) hers was *fairly* diverse, but just how diverse I don't know. I do know that her net worth and mine were fairly close, she had a reputable financial planner, and was seriously upset (almost panicked) by the amount she lost and did not expect to fully recover.

I wouldn't even consider playing the stocks without advice from a trusted financial planner. But stories like this dissuade me from taking the plunge. Another friend who owned an airplane was ultimately forced to sell the plane because of the market crash of the early 2000s. This friend also had a reputable financial planner, and did not recover after nearly five years.
 
EdFred said:
A deduction is not a credit - you never get it all back, so you aren't saving anything. The fact that you think you are saving certainly makes it seem like you don't know how it works.
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I never said it was, you save by paying less taxes, of course if you only going to put it back into bank it's not worth it.
Use the money for something else like...
Invest it, make more than the mortgage rate.
Buy something that would have a high interest rate to finance, like a plane!

Your calculator only proves that your scenario it's better to pay off the mortgage.
 
denverpilot said:
Heck here in CO, something like 90%+ pay their lender to escrow their taxes for them, and it's not required. Open a savings account and pay them yourself, save $100 or $200 a year
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What mortgage lender charges for escrow services?!?

My lender offers it at $0 as it helps ensure their asset (for now) remains protected during the life of the loan.

That's crazy talk, paying for escrow services.
 
KFD said:
I don't get the The Big Short reference? He didn't play it safe he took a risk, a big risk, that paid off big. If it hadn't he would have lost everything and almost did. You could say he was heavily in debt until his bet paid off.
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For me the movie wasn't about the few guys who knew what was comming and made a fortune, it was about the HUGE amounts of people who over extended themselves, did the rent to own lifestyle and lost big time.
 
teejayevans said:
I never said it was, you save by paying less taxes, of course if you only going to put it back into bank it's not worth it.
Use the money for something else like...
Invest it, make more than the mortgage rate.
Buy something that would have a high interest rate to finance, like a plane!

Your calculator only proves that your scenario it's better to pay off the mortgage.
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You never save when spending money, ever. Because...you're....spending....money.
 
EdFred said:
You never save when spending money, ever. Because...you're....spending....money.
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Well, since you can't take it with you, then you might as well try to spend it wisely, keep as much of it as you can for yourself (less for the politicians), and enjoy what little you have.

That's why when someone says they want to upgrade their avionics to the glass,GPS, etc, there is always naysayers, "you don't need it...", where I'm like "Go for it..". It isn't about what you need, in aviation, it's about what you want. And if you really want to save money: golf, boating, aviation, and horses are bad hobbies to have.
 
azure said:
Well, the *average* recovers. But by definition roughly equal numbers do worse than the average, as do better, depending on how the average is computed. Your chances of having mostly worse than average holdings won't be small unless you have a large number of randomly selected holdings. As I understand it, that's what it means to be diverse, and the more diverse your portfolio is the greater your resilience when market turns down. The more you have to invest, the easier it is to have a sufficiently diverse portfolio. I think (as I said) hers was *fairly* diverse, but just how diverse I don't know. I do know that her net worth and mine were fairly close, she had a reputable financial planner, and was seriously upset (almost panicked) by the amount she lost and did not expect to fully recover.

I wouldn't even consider playing the stocks without advice from a trusted financial planner. But stories like this dissuade me from taking the plunge. Another friend who owned an airplane was ultimately forced to sell the plane because of the market crash of the early 2000s. This friend also had a reputable financial planner, and did not recover after nearly five years.
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You don't need that much money to be diverse as there are mutual funds which cover all kinds of categories and are diverse in themselves. But people's appetite for risk is different. I have been invested, in part, in stocks and mutual funds since I was in my 20s and I'm glad that I was. Now I'm trying to back out slowly into less risk since I'm very close to retiring (quitting).
 
Everskyward said:
You don't need that much money to be diverse as there are mutual funds which cover all kinds of categories and are diverse in themselves. But people's appetite for risk is different. I have been invested, in part, in stocks and mutual funds since I was in my 20s and I'm glad that I was. Now I'm trying to back out slowly into less risk since I'm very close to retiring (quitting).
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Yea, its the panic that usually screws people. They cash out and miss the rebound.
 
teejayevans said:
Well, since you can't take it with you, then you might as well try to spend it wisely, keep as much of it as you can for yourself (less for the politicians), and enjoy what little you have.

That's why when someone says they want to upgrade their avionics to the glass,GPS, etc, there is always naysayers, "you don't need it...", where I'm like "Go for it..". It isn't about what you need, in aviation, it's about what you want. And if you really want to save money: golf, boating, aviation, and horses are bad hobbies to have.
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I never said don't spend, but interest is just money gone, that doesn't need to be just gone. Trying to justify getting a tax refund on it, is like trying to justify spending $100 a week on lotto tickets and winning $20 back. Everyone would say, "well, that's idiotic." And it is, just like keeping a mortgage around for 30 years - but somehow getting it back as a tax deduction is justifiable as opposed to the lottery. What do you get out of paying interest? Nothing, so you might as well pay it off as soon as you can, so you can spend it on tangible things - that you will enjoy. But hey if it brings you joy to pay interest - go for it.
 
exncsurfer said:
Yea, its the panic that usually screws people. They cash out and miss the rebound.
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You can blame me for the dotcom bust in 2000. I cashed everything out about 2 weeks before it started. I'm pretty sure that was the trigger.
 
exncsurfer said:
Before it started down? Lucky! I got burned in 2k, burned in 08. Check out the wheel: https://www.trustablegold.com/investor-sentiment-wheel/
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Yup, right before it went down. 08 I was pretty much out of it already. Jumped on Ford stock when it was $1.50 a share, and almost went all in with it, but only invested about 4-5% of what I could have. Had I went all in, I'd have been retired at 35. But, I didn't gamble on it, and so I'm just trudging. Now I'm waiting on the next crash - we're about due, and then I'll get in at the bottom.
 
EdFred said:
My house is within a few % of what I make/year and I live nowhere near a ghetto. Unless you consider 1500sf plus a 24x48 workshop on an acre in a low/no crime area the ghetto. In that case, well if we want to make up our own definitions of things...
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I'm with ya EdFred, and there are lots of good comments on here, but we need to steer the convo back to the intended subject.
 
OkieFlyer said:
I'm with ya EdFred, and there are lots of good comments on here, but we need to steer the convo back to the intended subject.
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If people didn't overspend on what they think are necessities, they could afford to fly. But no amount of money is going to get people flying if they aren't interesting in flying. 99%+ of people don't care to fly and wouldn't even if they had an extra $15,000/year to spend on it.

This question could be asked on any hobby board.

How do we get more people involved in ________?

And no matter what ___________ is, a majority of people are never going to be interested.
 
EdFred said:
If people didn't overspend on what they think are necessities, they could afford to fly. But no amount of money is going to get people flying if they aren't interesting in flying. 99%+ of people don't care to fly and wouldn't even if they had an extra $15,000/year to spend on it.

This question could be asked on any hobby board.

How do we get more people involved in ________?

And no matter what ___________ is, a majority of people are never going to be interested.
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I don't disagree one bit, and I didn't mean for it to sound like I was singling you out. I just tacked the appeal to change the thread direction onto my agreement with your statement. :)

Seemed like we were getting a little to specific with investment strategies and such is all. Carry on.
 
EdFred said:
And here's what my math says on guaranteed money if you have $3000/mo to throw at a house/guaranteed investment. And I'm going to round off the numbers.
Mortgage Amount: $200,000
Mortgage Rate: 3.5%
Term: 360 months
House Payment $900/mo
Best CD Rate I could find: 5Y @ 2.0%

Scenario 1 - only pay the $900 and dump $2100 into a new 2% CD every month
After 360 months
Interest Paid on mortgage: $123,000
Ending value of 2.0% CD(s): $1,034,000
Net: $911,000

Scenario 2 - take all $3000 and slam it at the house for 74 months to pay it off, then take $3000/month and put it in the same 2% CD each month for the next 286 months.
After 360 months
Interest Paid on mortgage: $23,000
Ending value of 2% investment: $1,098,000
Net: $1,075,000

Pay off the house.
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assuming CDs
EdFred said:
Yup, right before it went down. 08 I was pretty much out of it already. Jumped on Ford stock when it was $1.50 a share, and almost went all in with it, but only invested about 4-5% of what I could have. Had I went all in, I'd have been retired at 35. But, I didn't gamble on it, and so I'm just trudging. Now I'm waiting on the next crash - we're about due, and then I'll get in at the bottom.
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If you are so good with investing, why haven't you gone to work as a money manager?
 
midcap said:
assuming CDs
If you are so good with investing, why haven't you gone to work as a money manager?
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What's paying a higher guaranteed return than CDs?

Perhaps you missed where I DIDN'T get in on Ford stock like I should have, and I'm currently NOT retired. 2000 was dumb luck. I got out because I needed the money for something else. 2008/2009 I was focusing on non-stock finances.
 
EdFred said:
Yup, right before it went down. 08 I was pretty much out of it already. Jumped on Ford stock when it was $1.50 a share, and almost went all in with it, but only invested about 4-5% of what I could have. Had I went all in, I'd have been retired at 35. But, I didn't gamble on it, and so I'm just trudging. Now I'm waiting on the next crash - we're about due, and then I'll get in at the bottom.
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And that will be when? And how do you know when the bottom has occurred? Buy low, sell high....great strategy, so easy...then you can write a book about your secret system to becoming rich.
I've only heard that a million times...
 
EdFred said:
What's paying a higher guaranteed return than CDs?

Perhaps you missed where I DIDN'T get in on Ford stock like I should have, and I'm currently NOT retired. 2000 was dumb luck. I got out because I needed the money for something else. 2008/2009 I was focusing on non-stock finances.
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I don't know how I quoted CD's on accident.

anyhow. you are only looking at it from a singular stand point. Also, would you agree being able to deduct your mortgage interest lower your apr, no?
 
teejayevans said:
And that will be when? And how do you know when the bottom has occurred? Buy low, sell high....great strategy, so easy...then you can write a book about your secret system to becoming rich.
I've only heard that a million times...
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Late 1974, mid 1982, late 1987, mid 2000, late 2008/early 2009
We're getting in that range. It ain't rocket science. I'm almost 100% out right now, and not planning on investing until it drops. It's not rocket science if you aren't greedy. The problem is everyone wants to buy at the absolute bottom, and sell at the absolute top. That's pretty much impossible. I don't need to be at the absolute bottom, nor the absolute top. I've got my numbers, and when they are there I either get in or get out. I won't maximize, but I certainly won't lose. So right now I'm just waiting.
 
midcap said:
I don't know how I quoted CD's on accident.

anyhow. you are only looking at it from a singular stand point. Also, would you agree being able to deduct your mortgage interest lower your apr, no?
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Of course you can deduct it, but you only reduce your taxes/APR based whatever your tax rate is. I don't give a crap what my "real" APR is. Why would I pay 123,000 in interest to get 20-some odd thousand back - still losing around 100,000, when I can get it over and done with and only lose 20,000 total?
 
EdFred said:
Of course you can deduct it, but you only reduce your taxes/APR based whatever your tax rate is. I don't give a crap what my "real" APR is. Why would I pay 123,000 in interest to get 20-some odd thousand back - still losing around 100,000, when I can get it over and done with and only lose 20,000 total?
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What you imply means you have cash on hand to pay off the loan. So now the apr is important.
 
midcap said:
What you imply means you have cash on hand to pay off the loan. So now the apr is important.
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Of course I do, because I'm not retarded enough to over buy. I qualified for a house 4 times more expensive than the one I bought. So then I just made triple and quadruple house payments on the house I did purchase. After it was paid off, then I had fun money. New truck, car, two airplanes, etc...
 
hockeyrcks9901 said:
What mortgage lender charges for escrow services?!?

My lender offers it at $0 as it helps ensure their asset (for now) remains protected during the life of the loan.

That's crazy talk, paying for escrow services.
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Sorry WOT, but ... I've talked to folks who've had it as an annual management fee after I saw it. (Had a lender try to add it to something of ours once during signing, and I laughed directly at the person who handed me the paperwork. Then I started telling friends to watch out for it. It would usually be taken from the escrow account itself, easiest way to see it was to compare tax paid to escrow collected...)
 
denverpilot said:
Sorry WOT, but ... I've talked to folks who've had it as an annual management fee after I saw it. (Had a lender try to add it to something of ours once during signing, and I laughed directly at the person who handed me the paperwork. Then I started telling friends to watch out for it. It would usually be taken from the escrow account itself, easiest way to see it was to compare tax paid to escrow collected...)
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Yea, I'd probably flip out if they presented something like that. I'm not paying extra to protect the lender. Same kind of deal as PMI. I'm not going to pay for insurance to cover your loss. Of course, if you don't have 20% you don't have much choice there...
 
I was writing a graduate school paper today. The topic is the economics of space commercialization and it focuses primarily on the second and third order effects that the space economy (and the governments monopoly that is ever so slowly losing ground) have on it. After this thread, I couldnt help but make a comparison to general aviation. Where a Garmin 430 can >$8k and its certified, but I can buy an iPad, a receiver and a ForeFlight subscription and get more and often accurate data than available for a small fraction of the cost.

Meanwhile, the cheapest way to space is still usually a russian designed rocket from 1957 despite all government "help"
 
iPads are nice, I use one but...
I've had it shutdown because it overheated.
I've had a GPS app cause problems for Garmin Pilot.
I've had it's on board GPS with no WAAS put me 1/4 mile away from where I was.
Don't have these problems with a 430 and I wouldn't want it tied to my autopilot.
There are maybe 50000 430s that have been sold, in the last 20 years?! Apple sold more iPads in the first day they were introduced. I bet if you tell Garmin you'll buy 10 million 430s, the price would be close to a $1k.
 
A more accurate comparison would be why does Jepp charge what they do for Garmin updates when they get the same data for free from the Feds that all the non-certs do? Someone needs to hack out how to format the data for Garmin units so Jepp has some competition.
 
EdFred said:
A more accurate comparison would be why does Jepp charge what they do for Garmin updates when they get the same data for free from the Feds that all the non-certs do? Someone needs to hack out how to format the data for Garmin units so Jepp has some competition.
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Yes, and similarly to the space industry, if the private sector has been allowed a bit more freedom from the start, we'd be decades ahead of where we are. One of the questions I posed was "where would the cost of launch or technology of tourism be if the private sector were allowed to access to space from the beginning".

Now we have homebrew stratus like devices popping up, etc. There's not a big enough audience to want to hack a 430 and figure out proprietary formatting, but maybe one day.
 
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