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It is currently Fri Jul 25, 2014 11:21 am




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 Post subject: Re: How can anybody make a huge purchase in this economy???
PostPosted: Tue Feb 12, 2013 3:49 pm 

Joined: Mon Sep 29, 2008 7:32 am
Posts: 288
brad wrote:

And if you have kids, it's even harder because if you're planning to leave them an inheritance you'll leave them more if you keep working. The same applies for high earners who are committed to philanthropy: the longer you work, the more you can donate to the causes you support. Once you retire, your level of giving typically declines.


That's exactly the point. If you're pulling in $750-$1 million/year, it seems like a tragic waste for you to give up something that allows you to do so much good even if you're a do-gooder and not a big spender. Think of it, you could retire and give 20 hours a week or so to your favorite charity or you could keep working and give them $250,000/year and transform their whole mission.

Frankly, I don't make quite that much yet, but I sometimes find it crushing to think about the value of my time. It is really hard to relax when you know every hour of your time is worth $600+.


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 Post subject: Re: How can anybody make a huge purchase in this economy???
PostPosted: Tue Feb 12, 2013 3:55 pm 

Joined: Thu Apr 05, 2007 3:05 pm
Posts: 1321
tazdollars wrote:
Frankly, I don't make quite that much yet, but I sometimes find it crushing to think about the value of my time. It is really hard to relax when you know every hour of your time is worth $600+.


I know this is a problem that a lot of people would be more than happy to have to grapple with (I hate the "this is a first-world problem" put-down that so many people like to use nowadays), but in fact it can be really stressful.

I only place a dollar value on my time when I'm working; when I'm not, I place no dollar value on my time because I don't believe in maximizing my earning potential. But I work in consulting and my time is billed by the hour, and that is stressful because I have to bill enough to cover my salary while at the same time not destroying my clients' budgets. So like most consultants I end up working lots and lots of overtime but not billing for it. The golden handcuffs are hard to shake, but if I had to do it over again, I'd find a field that paid less but gave me back more of my own time. The last full two-week vacation I took was in 1987.


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 Post subject: Re: How can anybody make a huge purchase in this economy???
PostPosted: Thu Feb 14, 2013 10:13 am 

Joined: Fri Sep 12, 2008 12:29 pm
Posts: 1592
Location: Seattle, WA
What about saving up and paying cash for the new house? With your income, that's not out of the realm of possibility.


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 Post subject: Re: How can anybody make a huge purchase in this economy???
PostPosted: Fri Feb 15, 2013 6:54 am 

Joined: Fri May 04, 2007 8:14 pm
Posts: 1749
Taz,

I've been thinking this one over. As I posted earlier, there is a least one smart person who thinks we're in another housing bubble. But the fact that he's smart doesn't mean that he's right.

In my own case, I'm pretty close to Brad's age and a bit less then 3 years ago, my wife and I bought a bigger house, big enough to house 2 home offices and have a pool in the backyard. Before that, we lived in a 704 square foot cottage. It was nice and cozy, but we did decide that we deserved a bit more space after amassing enough to be able to afford it. I've referenced the house before in another thread; we do intend to eventually sell the house and downsize to something less labor intensive when we no longer can use separate home offices and don't want such a large pool (it's 20x40 feet) any more.

We did finance the house, but we have enough in investable assets not only to pay off the house, but have enough left over to retire if the markets went south like they did in the last fiscal crisis. So there's a sizable amount of risk there, but we can afford it. I've mentioned that we have more risk in our asset allocation than most recommend for our age, but our incomes make that risk manageable.

Anyway, I think your choice is as much a personal one as a financial one. If you think you can handle the risk in a realistic worst case scenario, it's not unrealistic to go for it. If the risk keeps you up at night even if you can afford it, then it's not worth it. Life is for living. Do what makes your life good for you.


Last edited by VinTek on Mon Feb 18, 2013 9:43 am, edited 1 time in total.

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 Post subject: Re: How can anybody make a huge purchase in this economy???
PostPosted: Fri Feb 15, 2013 3:43 pm 

Joined: Fri May 04, 2012 2:23 pm
Posts: 810
brad wrote:
I only place a dollar value on my time when I'm working; when I'm not, I place no dollar value on my time because I don't believe in maximizing my earning potential.


I agree mostly with this. As I always say, we all have a price. So, in theory, the price of my "non-working" time is the size of the carrot waved in front of me to get my butt off the couch. This for me is always significantly higher than my "wage" at my joe job. In fact, my spouse's business (which was also mine) brought us in $30k-$40k/yr. But, we have decided that it isn't worth the hassle, as my spouse isn't good at the business side of things and on top of all the paperwork, taxes and books, I have to listen to every little detail about the business to help them make a decision. So, something that would absorb maybe 200 hours a year of time isn't worth it for that. And it would take a shift in magnitude to make me interested in doing it on my off time.

Of course, many people, who may not be as fortunate as my family, work for less in their off time than they do at their regular job.

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 Post subject: Re: How can anybody make a huge purchase in this economy???
PostPosted: Mon Feb 18, 2013 7:39 am 

Joined: Mon Sep 29, 2008 7:32 am
Posts: 288
Okay, so after agonizing over this for several weeks (months?), my wife and I decided that our lives are in too much of a state of flux to consider a huge investment right now and we're just going to wait until January 2015 and pile up as much cash as we can. At that time, we'll decide whether to pay off our current house and be happy or use it and the proceeds from selling our house to make a 50%+ downpayment on our dream house.

We made the decision Sunday and I woke up this morning with a great sense of peace I hadn't had for a while. I didn't consciously realize how much the possibility of such a huge financial move had been stressing me out.

Thanks for everybody's support and advice.


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 Post subject: Re: How can anybody make a huge purchase in this economy???
PostPosted: Mon Feb 18, 2013 10:15 pm 

Joined: Sat Feb 16, 2013 4:27 am
Posts: 4
There is no way to predict the future but you can plan it.The future is to much risky you have to take risk otherwise its impossible to purchase a new house.You can easily pay your debt if you have a complete grip on your daily expenses.
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 Post subject: Re: How can anybody make a huge purchase in this economy???
PostPosted: Thu Feb 28, 2013 9:56 am 

Joined: Fri Jan 18, 2013 7:21 am
Posts: 95
Location: New York
Agreed, maybe the better question is, "How can anybody go deeply into debt..." or "how can someone take on obligations..." in this economy

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