Inheritance $30 000 shares should i sell and buy $30 000 of PM

[silverman47]

IMO this debate of rent vs mortgage is moot unless you look at things from the current context, which is a RE market that is at generational high, in a global Super-Crisis.

In that context, you want to be liquid with a minimum of liabilities and leverage.

As an asset, a mortgage is serious liability, very illiquid and highly leveraged.

BTW a mortgage is a paper asset that is a derivative of a physical asset. ouch.

The Gman and the banksters do everything they can to put you in a position of maximum pain = As a property "owner".

familiarize yourself with the Exter pyramid. That won't make you richer but IT WILL save you from ruin.

http://forums.silverstackers.com/uploads/9556_exterpyramid.jpg

Thats a very general view, not specific in any given area. You can do well in a downturn, in just about any of those areas including stocks & real estate. You need to have somewhere to live. Zimbabwe, people bought real estate, gold as well, but real estate was treated the same as gold. & when i said real estate, i never mentioned the word mortgage, thats only one form of aquiring real estate, and if you cant get past the idea of not borrowing for real estate, chances are your looking at the wrong real estate.

 

[silverman47]

IMO this debate of rent vs mortgage is moot unless you look at things from the current context, which is a RE market that is at generational high, in a global Super-Crisis.

In that context, you want to be liquid with a minimum of liabilities and leverage.

As an asset, a mortgage is serious liability, very illiquid and highly leveraged.

BTW a mortgage is a paper asset that is a derivative of a physical asset. ouch.

The Gman and the banksters do everything they can to put you in a position of maximum pain = As a property "owner".

familiarize yourself with the Exter pyramid. That won't make you richer but IT WILL save you from ruin.

http://forums.silverstackers.com/uploads/9556_exterpyramid.jpg

i might also mention that they company that wrote the gold silver book - the rich dad people and group of people have FAR more money in cash flowing real estate, than they do in gold and silver.

So im not against gold and silver i certainly have plenty of it. Theres plenty of other things out there, the world will continue on, cans of coke will still continue to be sold, the 7 / 11 down the road will continue to trade, people will always require somewhere to live, and they'll have to pay rent to a landlord to live there. Another thing the guy from zimbabwe told me that the people that did have gold and silver, most ended up having to sell to buy basic food and living items (accomodation).

 

[Pirocco]

Another thing the guy from zimbabwe told me that the people that did have gold and silver, most ended up having to sell to buy basic food and living items (accomodation).

Why 'ended up' alike it's a negative thing?
Those with Zimbabwe dollars had nothing to 'sell' for basic...

 

[valuecreator]

IMO this debate of rent vs mortgage is moot unless you look at things from the current context, which is a RE market that is at generational high, in a global Super-Crisis.

In that context, you want to be liquid with a minimum of liabilities and leverage.

As an asset, a mortgage is serious liability, very illiquid and highly leveraged.

BTW a mortgage is a paper asset that is a derivative of a physical asset. ouch.

The Gman and the banksters do everything they can to put you in a position of maximum pain = As a property "owner".

familiarize yourself with the Exter pyramid. That won't make you richer but IT WILL save you from ruin.

http://forums.silverstackers.com/uploads/9556_exterpyramid.jpg

Thats a very general view, not specific in any given area. You can do well in a downturn, in just about any of those areas including stocks & real estate. You need to have somewhere to live. Zimbabwe, people bought real estate, gold as well, but real estate was treated the same as gold. & when i said real estate, i never mentioned the word mortgage, thats only one form of aquiring real estate, and if you cant get past the idea of not borrowing for real estate, chances are your looking at the wrong real estate.

I'm writing specifically on how to get richer in this decade.

You won't "do well" if the price of your leveraged asset goes down 50% and the bank calls back the loan.

Maybe you didn't get the memo: Paper Is Dying. From a long, vicious cancer.

I suggest you forget Zimbabwe, the West is a different animal.

When was the last time you bought Royal Estate with cash?

What % of the people you know buy it with cash?

If you act like a sheep, you're bound to get slaughtered.

Sure, you need to live somewhere. Just let somebody else carry the liability or the leverage.

people will never get the equity, Super or entitlements they think they have. It will be vaporized through crashing the markets and inflation.

Wealth Transfer 101

 

[AngloSaxon]

i might also mention that they company that wrote the gold silver book - the rich dad people and group of people have FAR more money in cash flowing real estate, than they do in gold and silver.

Yes somewhere in the last third of the book, I remember from when I read it, Maloney states that explicitly: precious metals are a means to an end. The end being real estate. I watched a 1 and a half hour video of Maloney speaking this week he said in the middle that he doesn't care about gold itself, he cares that it is a thing of value, it is in its' cycle of accumulating value. The book and this video both spoke about the times where stocks were in accumulation phase, and the idea is to buy at the bottom of each phase for one, and sell at the top, which, conveniently, generally will be at the bottom for the other.

Went back and found the video for anyone interested:

[youtube]http://www.youtube.com/watch?v=tj2s6vzErqY[/youtube]

Edit - the $20,000 oz subtitle of the video is misleading, thats a hypothetical situation, not a prediction.

 

[valuecreator]

the guy understands Kwave

 

[trew]

Just following up on the renting approach: The big problem with house ownership is that the money is 'dead' unless there is capital appreciation.

Here is a scenario - 50 year period from 20 years of age to 70 years of age.
Assume there is no inflation, NO CAPITAL GAINS and no changes in interest rates - everything stays the same for 50 years.

1. Rent a house for $300 a week
Total expenditure for 50 years = $300 x 52 x 50 = $780,000
Value of asset owned at the end of 50 years = $0.

2. Buy a house for $350K
To keep it simple - $350K mortgage for 20 years = $600 a week mortgage payments
Total expenditure for 20 years = $600 x 52 x 20 = $624,000
Then expenditure for next 30 years = 0.
Value of asset owned at the end of 50 years = $350K

In reality though there IS inflation so the case is actually much worse for renting.
Inflation is working against the renter and working for the home owner.
Rent will keep going up by inflation and the home value will go up by inflation as well (in the long run).

If you cannot see the difference then I give up.

 

[valuecreator]

I have a friend that sold his house in 2004 ($400k) and bought over 40 000 oz of silver with it.

Guess how many houses he will buy by the end of this bull market, when he unloads his silver?

Paying a mortgage is for slaves.

Gold is the money of the king
Silver is the money of the prince
Barter is the money of the peasant
Debt is the money of the slave

and nothing ever change.

you don't get richer by borrowing to buy at the top and selling at the bottom, once the value reverted to the mean.

 

[markcoinoz]

Just following up on the renting approach: The big problem with house ownership is that the money is 'dead' unless there is capital appreciation.

Here is a scenario - 50 year period from 20 years of age to 70 years of age.
Assume there is no inflation, NO CAPITAL GAINS and no changes in interest rates - everything stays the same for 50 years.

1. Rent a house for $300 a week
Total expenditure for 50 years = $300 x 52 x 50 = $780,000
Value of asset owned at the end of 50 years = $0.

2. Buy a house for $350K
To keep it simple - $350K mortgage for 20 years = $600 a week mortgage payments
Total expenditure for 20 years = $600 x 52 x 20 = $624,000
Then expenditure for next 30 years = 0.
Value of asset owned at the end of 50 years = $350K

In reality though there IS inflation so the case is actually much worse for renting.
Inflation is working against the renter and working for the home owner.
Rent will keep going up by inflation and the home value will go up by inflation as well (in the long run).

If you cannot see the difference then I give up.

How much was paid for the upkeep of the house and maintenance over 50 years? (Inflation would play a fairly big part)
How much were the rates over 50 years? (Same with rates.) As value goes up so do rates.
Although rent may continue to go up over that period of time so do wages.

You see, there are two sides to the argument.

Cheers markcoinoz

 

[JulieW]

How likely is it though that blue chip property will join a property fire sale? From my reading it's the less desirable stock that plummets.

What are your thoughts on buying now on a holding interest only loan, from a fair choice of stock, holding your stack, and clearing your mortgage debt as PMs rise.

Granted in a Zimbabwe you don't get to buy a block of flats for one of you ounces, but will the PTB really allow Oz to get that out of control? And on another note, there is the Oz love affair with their abodes.

 

[metalzzz]

Just following up on the renting approach: The big problem with house ownership is that the money is 'dead' unless there is capital appreciation.

Here is a scenario - 50 year period from 20 years of age to 70 years of age.
Assume there is no inflation, NO CAPITAL GAINS and no changes in interest rates - everything stays the same for 50 years.

1. Rent a house for $300 a week
Total expenditure for 50 years = $300 x 52 x 50 = $780,000
Value of asset owned at the end of 50 years = $0.

2. Buy a house for $350K
To keep it simple - $350K mortgage for 20 years = $600 a week mortgage payments
Total expenditure for 20 years = $600 x 52 x 20 = $864,200
Rates annually for 50 years = $1,200 x 50 = $62,400
Maintenance annually for 50 years = $1000 x 50 = $50,000
Renovations and updates for 50 years $80,000? = $80,000
Home insurance for 50 years = $1000? x 50 = $50,000
Total extras $242,400
Then expenditure for next 30 years = 0.
Value of asset owned at the end of 50 years = $350K

In reality though there IS inflation so the case is actually much worse for renting.
Inflation is working against the renter and working for the home owner.
Rent will keep going up by inflation and the home value will go up by inflation as well (in the long run).

And your not going to upgrade or renovate anything in the property for 50 years?

If you cannot see the difference then I give up.

How much was paid for the upkeep of the house and maintenance over 50 years? (Inflation would play a fairly big part)
How much were the rates over 50 years? (Same with rates.) As value goes up so do rates.
Although rent may continue to go up over that period of time so do wages.

You see, there are two sides to the argument.

Cheers markcoinoz

Added a bit of reality in the maths up there for you

 

[fiatphoney]

What are your thoughts on buying now on a holding interest only loan, from a fair choice of stock, holding your stack, and clearing your mortgage debt as PMs rise.
.

A 'safe' step into the system?
Suppose : Instead of CB's raising rates, they impose in Cyprus (govt tax) levy on outstanding loans, so as all 'commoner' customers contribute their fair share, but leave base rates alone.
Ie principal increases.
Savings is merely stored past labour, so why discriminate against future labour.

Do you realise how much the cost of 'insurance' has risen in the last year!

 

[JulieW]

What are your thoughts on buying now on a holding interest only loan, from a fair choice of stock, holding your stack, and clearing your mortgage debt as PMs rise.
.

A 'safe' step into the system?
Suppose : Instead of CB's raising rates, they impose in Cyprus (govt tax) levy on outstanding loans, so as all 'commoner' customers contribute their fair share, but leave base rates alone.
Ie principal increases.
Savings is merely stored past labour, so why discriminate against future labour.

Do you realise how much the cost of 'insurance' has risen in the last year!

Thanks. Could we see an example? Has this been done elsewhere?

 

[menotcrimex]

I have a friend that sold his house in 2004 ($400k) and bought over 40 000 oz of silver with it.

Guess how many houses he will buy by the end of this bull market, when he unloads his silver?

Paying a mortgage is for slaves.

Gold is the money of the king
Silver is the money of the prince
Barter is the money of the peasant
Debt is the money of the slave

and nothing ever change.

you don't get richer by borrowing to buy at the top and selling at the bottom, once the value reverted to the mean.

That's a lot of money backing silver, please tell me your friend purchased some gold as well

 

[silverman47]

I have a friend that sold his house in 2004 ($400k) and bought over 40 000 oz of silver with it.

Guess how many houses he will buy by the end of this bull market, when he unloads his silver?

Paying a mortgage is for slaves.

Gold is the money of the king
Silver is the money of the prince
Barter is the money of the peasant
Debt is the money of the slave

and nothing ever change.

you don't get richer by borrowing to buy at the top and selling at the bottom, once the value reverted to the mean.

Paying a mortgage is for slaves ??? id seriously suggest investing some time in your financial education.

Good debt vs bad debt. If a mortgage is paying you thats a wonderful thing, debt can be used as leverage to increase your wealth exponentially. I think alot of people on this forum dont really understand how to buy houses properly, or have never owned any real estate, or both. It doesnt even have to be real estate, could be a small business of some kind as long as its cash flowing, real estate is probably the easiest however.


Your goal in my opinion should be to exchange your precious metals at some point for a heap of cash flowing real estate. You can do that already with a bit of research. Real estate is and always will be the ultimate investment over the long term, and its how Mcdonalds made their fortune. I'll say again, Capital Appreciation should be SECONDARY to any investment. Primary reason should be CASH FLOW.

 

[silverman47]

i might also mention that they company that wrote the gold silver book - the rich dad people and group of people have FAR more money in cash flowing real estate, than they do in gold and silver.

Yes somewhere in the last third of the book, I remember from when I read it, Maloney states that explicitly: precious metals are a means to an end. The end being real estate. I watched a 1 and a half hour video of Maloney speaking this week he said in the middle that he doesn't care about gold itself, he cares that it is a thing of value, it is in its' cycle of accumulating value. The book and this video both spoke about the times where stocks were in accumulation phase, and the idea is to buy at the bottom of each phase for one, and sell at the top, which, conveniently, generally will be at the bottom for the other.

Went back and found the video for anyone interested:

[youtube]http://www.youtube.com/watch?v=tj2s6vzErqY[/youtube]

Edit - the $20,000 oz subtitle of the video is misleading, thats a hypothetical situation, not a prediction.

exactly, real estate is and always will be the ultimate. Values going up and down shouldnt be an issue unless your way over leveraged on your real estate or your negative gearing everything, either way your buying real estate the wrong way. People area also very lazy when it comes to buying real estate they look in the suburb next to them or the same city. They have to get out of their shells and scour the entire country, and other countries.

Everybody on this forum should at a MINIMUM read a book called Conspiracy of the Rich. Theres plenty of others you can read but that one covers precious metals, stocks, bonds real estate everything.

 

[silverman47]

Just following up on the renting approach: The big problem with house ownership is that the money is 'dead' unless there is capital appreciation.

Here is a scenario - 50 year period from 20 years of age to 70 years of age.
Assume there is no inflation, NO CAPITAL GAINS and no changes in interest rates - everything stays the same for 50 years.

1. Rent a house for $300 a week
Total expenditure for 50 years = $300 x 52 x 50 = $780,000
Value of asset owned at the end of 50 years = $0.

2. Buy a house for $350K
To keep it simple - $350K mortgage for 20 years = $600 a week mortgage payments
Total expenditure for 20 years = $600 x 52 x 20 = $624,000
Then expenditure for next 30 years = 0.
Value of asset owned at the end of 50 years = $350K

In reality though there IS inflation so the case is actually much worse for renting.
Inflation is working against the renter and working for the home owner.
Rent will keep going up by inflation and the home value will go up by inflation as well (in the long run).

If you cannot see the difference then I give up.

How much was paid for the upkeep of the house and maintenance over 50 years? (Inflation would play a fairly big part)
How much were the rates over 50 years? (Same with rates.) As value goes up so do rates.
Although rent may continue to go up over that period of time so do wages.

You see, there are two sides to the argument.

Cheers markcoinoz

As rates go up so do deductions, at the same time this can increase cashflow from the tax office to you. You can receive more money in your pay packet every week.
You depreciate real estate using a depreciation schedule, and get your tax back' every week rather than at the end of the financial year.

as you get more real estate you will start to look at things like companies and trusts, paying yourself a salary from your own company etc. which is also deductable as a company expense ???? !!! ??? get it? your company can claim your own salary as a tax deduction.


Building and pest report should make sure your buying a sound property, and landlord insurance protects you from most other things. I'm fortunate enough to be a tradesman so maintenance is easy for me. Either way maintenance is a very small cost, if its anything big its covered by your insurance so you only have your excess to worry about which is also tax deductable.



The other thing i will say is the corporate rate of tax rate is lower than personal rate. So by shifting your dealings to a corporate structure you will be paying far less out in tax over the long run which is cash you can be using in the mean time to buy more income generating assets further increasing your wealth.

 

[Jrandom]

I have read Robert K's books. But I also see that a big component of his "cash flow" is from selling books, seminars, and training courses. Apparently, Mike Maloney paid Robert to be on his roadshow. Mike Maloney now has a subscription based research firm.

Please name one person that Robert K has molded into the next Donald Trump. I would love to hear about someone who is cash flowing a million plus off of his info.

I do follow the guy, but just in my spare time, and just to dig through the volumes of noise looking for pearls.

 

[silverman47]

I have read Robert K's books. But I also see that a big component of his "cash flow" is from selling books, seminars, and training courses. Apparently, Mike Maloney paid Robert to be on his roadshow. Mike Maloney now has a subscription based research firm.

Please name one person that Robert K has molded into the next Donald Trump. I would love to hear about someone who is cash flowing a million plus off of his info.

I do follow the guy, but just in my spare time, and just to dig through the volumes of noise looking for pearls.

It doesnt matter where his cash flow comes from. His first big success was the invention of the velcro wallet. long before his books.


Donald trump fully endorses the kiyosaki methods, not only that he's co-written books with him about the same thing.

This is the problem with skeptics, everything is skeptical.

 

[silverman47]

Al

I have read Robert K's books. But I also see that a big component of his "cash flow" is from selling books, seminars, and training courses. Apparently, Mike Maloney paid Robert to be on his roadshow. Mike Maloney now has a subscription based research firm.

Please name one person that Robert K has molded into the next Donald Trump. I would love to hear about someone who is cash flowing a million plus off of his info.

I do follow the guy, but just in my spare time, and just to dig through the volumes of noise looking for pearls.

Any successful real estate mogul, small business owner or investor uses these same methods. At the end of the day it comes down the the drive of the person.