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Roth Ira

The Saltman

By The Saltman,
in Huddle Lounge

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liljah8303 Newbie

liljah8303

Posted
Posted

I follow you.

good debt vs bad debt - borrowing to finance things that will appreciate in value as opposed to borrowing to buy things that reduce in value. A mortgage to buy a home is good debt while borrowing to finance a vacation or a new car could be considered bad debt for example.

Your house is not a good debt. If you have a mortgage it takes money out of your pocket every month. Therefore it would be a bad debt, or liability.

The word appreciate means capital gains. Hoping for something to appreciate is gambling.

Asset-Puts money in your pocket weekly, monthly, quarterly and annually.

Liability-Takes money out of your pocket weekly, monthly, quarterly, and annually.

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liljah8303 Newbie

liljah8303

Posted
Posted

Saltman, one thing to note, over 75% of NFL players are bankrupt within 2 years of retiring from the NFL.

They are looking for that "cash flow" NOW and not thinking about the future. The Doggy Daycare seems like a great idea now, but what about 20 years? Why buy a car dealership when it's a grind everyday and you have limited capital? That cash flow looks great in year 1 but what about year 5-10?

Looking for cash flow is good, but assuming you have enough cash to live on now you need to prepare for the future when you won't have that normal cash flow that you have now. You need to set yourself up to have a cash flow in 40 years, not 2.

My .02.

The people who live the life that you want to live focus on cash flow. You always want to increase your cash flow of course, why would someone stop after 2 years? A doggy daycare? A car lot?

You can have your 2 cent back

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liljah8303 Newbie

liljah8303

Posted
Posted

Does anyone else find is appalling that the public school system in America does not teach even the most basic financial classes?

There is a reason they dont. You should read "If you want to be rich and happy dont go to school" or "The conspiracy of the rich"

I could talk all day about this subject....

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Camdemonium Newbie

Camdemonium

Posted
Posted

The people who live the life that you want to live focus on cash flow. You always want to increase your cash flow of course, why would someone stop after 2 years? A doggy daycare? A car lot?

You can have your 2 cent back

LOL I live my life exactly how I want it to be. If you really think having more disposable income is going to make you feel better about yourself and make your life better, you are mistaken.

Considering Saltman has a new daughter, is going back to school himself, got a late start on saving for retirement, has a wife to take care of, and I assume more kids in the future, he might not be as ready to take on added risk that you are.

He wants to have his kids set up and be able to live a nice life during retirement. If he's trying to make Jay-Z money, you might be on to something.

Maybe it's worked out for you. Maybe you are some house flipper to the stars. You're a mogul. I'm glad it's worked out for you but his situation seems a little bit different. To each his own I guess.

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The Graduate Newbie

The Graduate

Posted
Posted

Your house is not a good debt. If you have a mortgage it takes money out of your pocket every month. Therefore it would be a bad debt, or liability.

The word appreciate means capital gains. Hoping for something to appreciate is gambling.

Asset-Puts money in your pocket weekly, monthly, quarterly and annually.

Liability-Takes money out of your pocket weekly, monthly, quarterly, and annually.

I would suggest that owning beats renting over the long term. A mortgage is a debt and creates negative cash flow for the length of the mortgage. The debt is also building equity as the mortgage is paid off over the years. Once the mortgage is paid off, a person now has equity in the home and should be worth more than the house was purchased for. A person has to live somewhere. Renting creates negative cash flow and will as long as a person rents. That is why I said a mortgage as good debt.

I don't think people include their home as a portion of their investment portfolio but it is the biggest piece of the pie for most people.

Bad debt or liabilities such as credit cards, vehicle payments, vacations and other fancy toys create negative cash flow on a depreciating asset or something that was enjoyed for a short period of time.

I know people that have bought condos and I think...Holy Crap....In addition to having the equity tied up in the purchase of the condo, their condo fees are the same as a monthly mortgage for some people or darn close to it. It varies and each persons situation is different but it is certainly something to consider when buying a condo.

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Happy Panther Grand Master

Happy Panther

Posted
Posted

I'm not saying materialism defines true happiness.

But I'm saying the old adage of money can't buy you happiness is generally wrong.

What is the main reason people fight and stress? Money.

What is the main reason we don't have the freedom to do the things we want? Money.

Money buys you freedom. Freedom is happiness.

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pstall Newbie

pstall

Posted
Posted

Let me clarify something in case what i said about a crash is being taken to the mountain top. I'm not predicting a crash.

I simply saying it WILL be worse than what we saw in 08.

Facts are facts. Horrific job market. Multiple large economies are running out of bullets to use to fix things that use to work before.

I have not told anybody, here or elsewhere to be entirely out of the market, what I am telling them though is to keep your exposure low.

Good ole fashion dollar cost averaging is the most basic way to get good deals and keep your exposure limited while at the same time keeping you from trying to time the market.

Its TIME IN, not TIMING in the market that plays out.

From my research the overall market and economy are severly miss priced and there are many more bottoms to get too.

Banks are simply a bad play because of the housing market. Enter at your own risk there. However, I LOVE credit union stocks. Even more so because of the big banks charging fees for your debit card.

My advice is always do your homework and know what it is you are investing in. If you don't know then learn. If you think you know good for you.

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