A Wedding, a wife, a house oh my!!!

There is risk in everything. Even yours and S10 plan. Should I never have a child because it could have down syndrome or something else horrible? Life is risk, some people choice to hide from it others choice to accept it but regardless it is still there.

And you are right I am very lucky person and I remind myself ever day of it. I have a healthy wife, my own health and two very healthy children. As far as losing my butt I have safety measures in place but that is not to say the perfect storm would not wipe me out or yourself. Again, I feel very comfortable with my financial situation; there are other factors that I am not going to bring in like my savings and cash flow that help strengthen my safety measures.

You seem to be bitter by my choices and for that I am sorry. Is that you are afraid of risk? Without great risk there are no great rewards.

As far as Waldskins he too can make his own choices; either risky ones or less risky ones.

I'm not bitter at all. In fact, you skipped over my last post that said I was happy for you that things seem to be working, but it's not a situation that I would advice others to pursue. Yours is based purely on luck. You were obviously wealthy enough to take the chance. That's fine for you. But, the advice I posted, and the advice that Firstdown and Schneed posted is not based on luck.

It was based on fiscal responsibility and something that does work for everybody if they are willing to do what it takes to follow each step. Saving up an emergency fund for six months to live off of is not based on luck. It's based on insurance that if I lose my job, I'm able to keep food on the table, a roof over my head, gas in the car, and clothes on my back for six months. I don't have to rely on any outside source of funding to keep things afloat. That means, I have hired myself to be an active job seeker for a six month contract. I don't have to rely on the hope that I'm going to keep enough tenants in my rental properties to make ends meet, because that money does not exist until it is in my pocket. So, I have to PLAN for the worst. That is really my whole point MRedskins.

I said that buying rental property, unless it is paid in full, is a bad, bad idea, and I stand by that statement regardless of the outcome. Because, until that property is paid in full, you're constantly chasing profit and having to borrow from Peter to pay Paul to keep everything above water. Being financially free does not mean you have to take large risks - that is an excuse and a myth that people use all the time to justify whatever mess they got themselves into. Does it work for some? Sure it does. But for ever one person that makes it work, there is at least three people who went bankrupt trying to do the same thing. It's not the best advice.

Again, there is no bitterness on my part, just a curiosity why someone would advice a person not to purchase a home in this buyer's market, a home in which that person is going to own and live in, and then turn around and justify owning several properties that are not paid for, and saying you're making good money off of it? It's just a bit hypocritical in my opinion.

That's true, your plan pretty much eliminates all risk. But it also means nobody would buy a home until they were like 40 years old.

Unless you come from old money, it takes time to build up enough cash to cover a 6-month emergency fund plus enough to put down a 20% down payment. While you're taking years to save all that money, you're missing out on the appreciation of home prices. Granted home price appreciation has been nonexistent for five years, but going forward it will come back around.

The practical analysis goes like so: if you build an emergency fund and buy a home with 5% down, you can probably accomplish that by age 28 or so. If you build an emergency fund and buy a home with 20% down, most can't accomplish that until 35. That's a seven year difference.

A $200,000 home will appreciate in value by $46,000 over 7 years, assuming 3% appreciation in home prices (about the historical rate).

If you buy that home with only 5% down instead of 20% down, you're paying:

PMI - $16,800 ($200 per month times 12 months times 7 years)
Interest on the 15% you didn't put down - $10,500 ($30K times 5% interest rate times 7 years)
Maintenance Expense for those 7 additional years: I dunno, call it $2000 per year to be generous - $14,000
Total - $41,300

That's less than the appreciation you missed out on. And then you get money back on your taxes on the PMI and interest you paid.

You're better off paying 5% down and not waiting to build up the 20%. At least most people are.

I agree there's some risk there, but the risk/reward pays off as long as you have an emergency fund and keep your monthly mortgage payment to less than ~33% of your net income.


Well, I think it depends upon the property. Is this a $150,000 home or is it $300,000k or more? I think it's entirely possible to save 20% down for a home that's around $150k. I'm assuming a couple brings in collectively $80k a year. It certainly takes being frugal and the willingness to pick up an extra income somewhere to help supplement. However, practicality? Most people don't want to do that. They would much rather continue going on vacation every year, spending money eating out every week, buying new cars, so forth and so on. It's human nature. I'm the same way. But, regardless of the amount that's put down, I'd not have that mortgage payment greater than around 30% of my monthly expenses. Think you mentioned that earlier as well.

The great thing about buying a home now is that you can get the sellers to pay some if not all closing cost. Actually you should ask them to pay cost associated with closing because it covers more things. Some things like insurance ar not considered closing cost but are cost associated with closing.

Save your self and just don't get married. ;)

Pay no mind to SBXVII. He hijacked my wedding thread a while back.

Enjoy your marriage and best of luck with the housing situation.

I'm not bitter at all. In fact, you skipped over my last post that said I was happy for you that things seem to be working, but it's not a situation that I would advice others to pursue. Yours is based purely on luck. You were obviously wealthy enough to take the chance. That's fine for you. But, the advice I posted, and the advice that Firstdown and Schneed posted is not based on luck.

It was based on fiscal responsibility and something that does work for everybody if they are willing to do what it takes to follow each step. Saving up an emergency fund for six months to live off of is not based on luck. It's based on insurance that if I lose my job, I'm able to keep food on the table, a roof over my head, gas in the car, and clothes on my back for six months. I don't have to rely on any outside source of funding to keep things afloat. That means, I have hired myself to be an active job seeker for a six month contract. I don't have to rely on the hope that I'm going to keep enough tenants in my rental properties to make ends meet, because that money does not exist until it is in my pocket. So, I have to PLAN for the worst. That is really my whole point MRedskins.

I said that buying rental property, unless it is paid in full, is a bad, bad idea, and I stand by that statement regardless of the outcome. Because, until that property is paid in full, you're constantly chasing profit and having to borrow from Peter to pay Paul to keep everything above water. Being financially free does not mean you have to take large risks - that is an excuse and a myth that people use all the time to justify whatever mess they got themselves into. Does it work for some? Sure it does. But for ever one person that makes it work, there is at least three people who went bankrupt trying to do the same thing. It's not the best advice.

Again, there is no bitterness on my part, just a curiosity why someone would advice a person not to purchase a home in this buyer's market, a home in which that person is going to own and live in, and then turn around and justify owning several properties that are not paid for, and saying you're making good money off of it? It's just a bit hypocritical in my opinion.


For the record I purchased all my homes prior to 2005. I am telling Waldskins if it was me now starting out again I would rent build up my finances then buy what I really need when the time is right vs. buying something now just to get into something then 5 years down the road need something else and realize his first investment has not appreciated.
Lets just agree to disagree. I will continue on my merry financial way and you continue on yours.

For the record I have never had to go to a Dave Ramsey or any class of that sort to figure out how to invest my money or spend it. To add I have never gone a day hungry, never had a late payment on any thing and I have a high beacon score. I got be doing something right???

If I am in the poor house I will give you a call. =)

Pay no mind to SBXVII. He hijacked my wedding thread a while back.

Enjoy your marriage and best of luck with the housing situation.

OMG that is right LOL! I forgot about that.

Really the best answer and advice that Dave Ramsey would give to everyone looking to purchase a home. I'm in the same boat right now. I have debt (a bit of credit card debit, student loans, car payment, house payment even though I have found a possible buyer for it,) and have not been able to save for a down payment for trying to pay for a honeymoon and all the trimmings.

We both don't like the idea of renting, especially when renting means spending $800 - $1200 a month. However, we both think it's important to pay off as much debt prior to the purchase of a house as possible. My goal is to at least have the credit card bill and the student loan paid off. I've just purchased my car, so it's going to be awhile before that gets paid off.

We're getting married in October, and I fear I'm going to be completely broke by then...lol!

Dude you are giving me all this crap and your up to your eyes in debit.

I have no revolving debit. My cars are paid off. No student loans, etc.. Other then that I have my mortgages and every day expenses. Let me add day care to that also.

I honestly don't care what your financial situation is but for you to come in here and poop all over me about how to spend and invest money is hilarious.

For the record I am 38 we are pretty close in age.

This thread has gone down hill

For the record get a house with a detached garage beause its harder for your wife to yell at you when your out in the man cave drink and watching football.

let me congratulate waldskins and back out of this one. best wishes to you and your family.