Posted on 03/04/2009 6:50:02 AM PST by marshmallow
although I routinely violate this rule- IBD says cut all losses on stocks at 8%.
Cut every loss when it’s 8% below your cost. Make no exceptions so you can always avoid huge, damaging losses. Never average down in price.
http://www.investors.com/editorial/editorialcontent.asp?secid=1000
We are for one. And it’s not b/c of bad decisions or buying more than we could afford. We never refinanced to borrow (we did to get a better rate), never took out a second.
“IBD says cut all losses on stocks at 8%.”
If everyone did that in this market, there would be nary a shareholder left;-)
Supposedly they just took 11 million OFF the uninsured roles with the new child coverage, but still I keep hearing there are 43 to 48 million uninsured.
The numbers you hear will never be decreased by the numbers they said they’ve helped.
I have given up on pointing out these numerical/logical problems to libs. They are immune to logic and math.
We’re fine where we live too. And we’re prepared to ride it out.
But it does get stressful thinking about it. Hubby’s company has already cut out bonuses (which equates to about a 10% salary cut) and are making other changes. More pay cuts are probably on the horizon. He’s been waiting more than 6 years for his green card so a layoff would doubly screw us b/c he can’t go work for another company.
It’s only a matter of time before Obama’s defense cuts start affecting my job.
We can continue our Dave Ramsay path and do our best to protect ourselves. But if one of us lost our jobs there’s nothing we could do but sell for a horrible loss.
So yeah, it’s hard not to let the what ifs into the head no matter how much we try to not dwell on it.
Being upside down is only bad if you have to sell. If you can still afford to pay the mortgage and can wait to ride out the market, then you're fine. After all, you still have to pay for housing.
Wrong. If the mortgage exceeds the property value, the borrower can demand an immediate cash payment to cover the difference and foreclose if the borrower can't cover it.
Did you mean that the “lender” can demand an immediate cash payment...?
I’m no expert, just paying attention to what you all are writing.
SZ
One in Five U.S. Mortgage Borrowers Are UnderwaterOne in five ... is underwater.
“So what? If you are happy living in the house, then what’s the problem? Keep paying and one day it will be yours.”
That’s the problem. Even if you own the property outright, you own a continuing depreciating asset... Hopefully your neighbors will take your advise and make their timely payments foregoing potential neighborhood blight.
Outcome-based journalism?
“We were just unfortunate to buy at the high end of the market.”
No, you made the ERROR of buying at the high end.
I moved around a lot in the military. I only bought twice (and lost money on one). The rest of the time I rented. Why? Because I could rent for 80% of a house payment AFTER putting down 100K.
When a 100K down payment leaves you paying more than rent, housing prices are too high. Buy, and you take a real chance of losing big.
Housing prices ultimately must be connected to prevailing wages. At least in Tucson, the market needs to drop further before that will be true. I bought my last home knowing its value might decline below my payment because I was buying for the remainder of my life. And even after the collapse of the market here, I could still sell it for about a 5% loss...or MAYBE break even.
But you were NOT unlucky. You didn’t HAVE to buy. You chose to buy rather than rent.
Remember - one man’s foreclosed home is another man’s affordable housing!
True story: Sportute Girl (and Pickup Truck Guy) buy a house they like at a price they can afford. Their home is now worth less than they paid for it, but since they put the equity from their old home into their new home, they are not 'upside down'. Why should SUG and PTG be taxed to bail out the upside down homeowner?
” At some point the housing prices drop and his house is worth less than he owes on it.”
It depends on the degree of the fall.
If it’s 5% underwater, no problem. Heck, if it’s 20% underwater and he has no problem with it, no problem.
BUT, if it falls 50% or more, then what? It may never get back to his price, and psychologically, this can affect his outlook on other things too. Add in job losses and most people do not have the good fortune to be able to wait it out.
You are correct, I meant lender. Not enough coffee yet today...
Bring back sentence diagramming!
That actually happened to someone I knew in the 1980’s. He lost his job, but was able to find employment in another state. He had to sell his home that was worth much less than he owed on it. He finally turned the key over to the bank and destroyed his credit rating. Now if government wants to address people who are underwater AND need to sell due to employment, that is a different issue than helping everybody who is ‘underwater’.
I’m pretty borderline myself. We put 20% down and seen a drop in comparative prices by roughly that same 20% since then. Of course, I didn’t buy this house as an investment property, so as long as I can make the payments, today’s valuation matters little to me (except for determining property tax assessments, of course).
Guess Daddy's money doesn't go as far as it use to?
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