The nest egg is gone.......
03-22-2008, 08:47 PM
#46
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03-22-2008, 09:45 PM
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03-23-2008, 04:23 PM
#48
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Corn is 56# to a Bushel,
Wheat is 60# to a Bushel,
Beans are 60# to a Bushel,
Oats are only 32# to a Bushel,
Speaking of measurements. Many people don't realize that a Barrel of oil is 42 Gallon US. Many think it means a 55 gallon drum.
03-23-2008, 04:32 PM
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A home is not an investment. It's an asset that happens to hold its value rather than depreciate, though market forces can change that value. If the market holds constant, the value of a house will simply appreciate as inflation lowers the value of a dollar.
Buy a house because you want to live there. If you are trying to make money off it, you better know the local market cold, and know what you are doing.
I think a lot of people contributed to the housing bubble because they watched all these HGTV and TLC shows and thought that house flipping was an easy way to make big $$. Just follow the recipe and get rich, right?
The banks got greedy, but they had to. When one bank does NOT offer someone a loan they can't afford at a rate that's too low, some other bank will, all but forcing them to do so as well or they won't be competitive.
You'll note that almost all of the companies in hot water are public companies. Without shareholders to answer to, a privately held company doesn't have to give into that pressure to make a buck and can steer clear of the risky loans.
jh
Buy a house because you want to live there. If you are trying to make money off it, you better know the local market cold, and know what you are doing.
I think a lot of people contributed to the housing bubble because they watched all these HGTV and TLC shows and thought that house flipping was an easy way to make big $$. Just follow the recipe and get rich, right?
The banks got greedy, but they had to. When one bank does NOT offer someone a loan they can't afford at a rate that's too low, some other bank will, all but forcing them to do so as well or they won't be competitive.
You'll note that almost all of the companies in hot water are public companies. Without shareholders to answer to, a privately held company doesn't have to give into that pressure to make a buck and can steer clear of the risky loans.
jh
Just my .03. Adjusted for a fuel surcharge.
03-23-2008, 09:39 PM
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nope- when a bank looks at person's request for a business loan for their first business, they have no business assets to show. they only have their personal assets vs. their personal debt for the bank to use in their decision process, and they will disagree with the 'house with a mortgage being an asset' concept. when you fill out an app for credit they will ask you if you rent or own, then they will ask you how much your payment is- they do not have a space to put down 'how much is your house worth', because the value of your home is not considered an asset (it is an asset to the bank that holds your note, though). you may consider your house an asset, as you may be looking down the road at selling it, and walking away with quite a bit more than you paid for it, but since it is costing you money every month (mortgage, property taxes, etc.), it is simply not considered an asset. btw, did i mention that it's really not worth arguing about?
Some of this is true, some...not necessarily true. To determine one's net worth you list everything you own and determine it's current market value (assets). Do the same with every debt (liability), subtract the liability form the asset values to determine net worth. The lending institution will consider other factors including payment history on loans, income potential of proposed business from business plan, etc. And perhaps ask for character references to determine how others respond to your decision making abilities.
There is a place to indicate if you rent or own. There are folks who own their residence and other properties without debt. These are assets!
By the same token, to make the illustration more obvious, if you are making payments on a property, let's say you've made payments of principal and interest for 29 years on a 30 year note ----- that's an asset and most any lending institutions would NEVER say that is NOT an asset.
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