What is the best investment you ever made?

[billt460]

A lot of people consider their house to be their "best investment", because of the $$$ numbers increase. But it really isn't. At best it's a hedge against inflation..... Or a gain against the guy who lives in an apartment, or with mom and pop, and doesn't own one.

A true monetary investment goes up in value without costing you anything in the interim. And it can be cashed in and used for other things. For example, after you retire you can buy that bass boat, or sand rail you've always wanted. Or add to your gun collection, or whatever.

If you sell your home for whatever numbers "gain" you may have realized on it, it's going to cost you the same or more to replace it. Because whatever your house increased, so does everyone else's. Especially during a period of high inflation. And it's not like you can sell it and move into the vacant lot next door and pitch a tent.

Yes, under certain conditions you can sell the large home you raised your family in when you retire, and buy a smaller, cheaper one in a "retirement community". But even that's not always possible. The most expensive home I've ever lived in, is the one I'm living in now. And it's considered to be in a, "resort community".

I've never looked at my home as an "investment". But rather it's much like a car..... A necessary evil that costs money, and is a non stop expense every day you own it.

 

[Cujet]

Cujet,

Are the non strutted, high wing Cessna's, (210), as strong as the strutted high wing models, (150)?

I really don't know the answer. The Cardinal 177 has the same spar as the 210 and 1000 pounds lower weight. So, the 177 is likely to be extremely strong. I know of one 210 that broke up in flight, due to a corroded spar and operated by pilots pulling 6G as many as 175 times per flight (the published limit is 3.8G). No 177's have broken up in flight, very few strut braced Cessna's have had in flight breakups. But the number is apparently non zero.

 

[billt460]

I really don't know the answer. The Cardinal 177 has the same spar as the 210 and 1000 pounds lower weight. So, the 177 is likely to be extremely strong. I know of one 210 that broke up in flight, due to a corroded spar and operated by pilots pulling 6G as many as 175 times per flight (the published limit is 3.8G). No 177's have broken up in flight, very few strut braced Cessna's have had in flight breakups. But the number is apparently non zero.

If I recall, Scott Crossfield, (the famous X-15 test pilot), was killed in a Cessna 210 when he inadvertently flew it into extreme turbulence because of a weather front that closed up around him.

The aircraft broke up in mid flight. This was confirmed by the accident investigators, when they found the wings over a half mile away from the fuselage containing his body.

 

[Zee09]

A great mattress.

 

[JeffKeryk]

A lot of people consider their house to be their "best investment", because of the $$$ numbers increase. But it really isn't. At best it's a hedge against inflation..... Or a gain against the guy who lives in an apartment, or with mom and pop, and doesn't own one.

A true monetary investment goes up in value without costing you anything in the interim. And it can be cashed in and used for other things. For example, after you retire you can buy that bass boat, or sand rail you've always wanted. Or add to your gun collection, or whatever.

If you sell your home for whatever numbers "gain" you may have realized on it, it's going to cost you the same or more to replace it. Because whatever your house increased, so does everyone else's. Especially during a period of high inflation. And it's not like you can sell it and move into the vacant lot next door and pitch a tent.

Yes, under certain conditions you can sell the large home you raised your family in when you retire, and buy a smaller, cheaper one in a "retirement community". But even that's not always possible. The most expensive home I've ever lived in, is the one I'm living in now. And it's considered to be in a, "resort community".

I've never looked at my home as an "investment". But rather it's much like a car..... A necessary evil that costs money, and is a non stop expense every day you own it.

I am struggling with your logic...
If you do not buy a property to live in, where ya gonna live?
IMO, you are paying your mortgage or someone' elses.
Ay least with a purchase, you have a chance og getting some of your hard earned $$ back; rent money is gone forever.

 

[Rand]

Best investment? RO water filter system.. my ROI and the convenience factor are huge!

 

[svtrit]

My house in Hanford, CA. Just before I decided to move back to the Midwest, Lemoore NAS announced 3 new F-18 squadrons moving to the area.

I made a lot of money on that house, and it’s why I have the house I’m in today. Nothing has ever done that well for me.

I did double the money on the 55 F100 I brought with me from CA, but it wasn’t a ton of money.

 

[Dave Hess]

A lot of people consider their house to be their "best investment", because of the $$$ numbers increase. But it really isn't. At best it's a hedge against inflation..... Or a gain against the guy who lives in an apartment, or with mom and pop, and doesn't own one.

A true monetary investment goes up in value without costing you anything in the interim. And it can be cashed in and used for other things. For example, after you retire you can buy that bass boat, or sand rail you've always wanted. Or add to your gun collection, or whatever.

If you sell your home for whatever numbers "gain" you may have realized on it, it's going to cost you the same or more to replace it. Because whatever your house increased, so does everyone else's. Especially during a period of high inflation. And it's not like you can sell it and move into the vacant lot next door and pitch a tent.

Yes, under certain conditions you can sell the large home you raised your family in when you retire, and buy a smaller, cheaper one in a "retirement community". But even that's not always possible. The most expensive home I've ever lived in, is the one I'm living in now. And it's considered to be in a, "resort community".

I've never looked at my home as an "investment". But rather it's much like a car..... A necessary evil that costs money, and is a non stop expense every day you own it.

I agree with you to not include my house as an investment or part of my net worth.

 

[billt460]

I am struggling with your logic...
If you do not buy a property to live in, where ya gonna live?
IMO, you are paying your mortgage or someone' elses.
Ay least with a purchase, you have a chance og getting some of your hard earned $$ back; rent money is gone forever.

I agree. You have to live somewhere. And a house is your best bet, because it's an inflation hedge. But I don't look it as an "investment" per say. Just because it increased in value. Because it will cost you the same or more to replace it.

A true investment exceeds inflation dramatically. And it doesn't cost you anything to own it. If all you do is stay with inflation, you're not gaining ground financially. All you're gaining on with a home, is against someone who is paying rent.

 

[doublebase]

I agree. You have to live somewhere. And a house is your best bet, because it's an inflation hedge. But I don't look it as an "investment" per say. Just because it increased in value. Because it will cost you the same or more to replace it.

A true investment exceeds inflation dramatically. And it doesn't cost you anything to own it. If all you do is stay with inflation, you're not gaining ground financially. All you're gaining on with a home, is against someone who is paying rent.

It really depends on the situation. Think of it this way, the house will eventually be paid off, or there will be enough equity in it for buying power in other assets. It’s also obviously a tax write off in many aspects, like interest, taxes, insurance.

I get your point of view, but it it’s a HUGE financial advantage to pay down a home. Even if it’s not 100% payed off, you can still refinance into much smaller payments as you build equity, and use the savings in other investments. It’s a vehicle that a renter won’t have...monthly payments going down. Instead theirs will go up.

 

[billt460]

It really depends on the situation. Think of it this way, the house will eventually be paid off, or there will be enough equity in it for buying power in other assets. It’s also obviously a tax write off in many aspects, like interest, taxes, insurance.

I get your point of view, but it it’s a HUGE financial advantage to pay down a home. Even if it’s not 100% payed off, you can still refinance into much smaller payments as you build equity, and use the savings in other investments. It’s a vehicle that a renter won’t have...monthly payments going down. Instead theirs will go up.

I agree. All I'm saying is I don't compare it to an investment. Paid off or not, It costs money to own. (Property taxes, water, electric, sewer, heat, upkeep). An investment pays you to own it. (Stock dividends, interest payments). It's the best way to live. Not the best way to invest.

 

[JeffKeryk]

I agree. You have to live somewhere. And a house is your best bet, because it's an inflation hedge. But I don't look it as an "investment" per say. Just because it increased in value. Because it will cost you the same or more to replace it.

A true investment exceeds inflation dramatically. And it doesn't cost you anything to own it. If all you do is stay with inflation, you're not gaining ground financially. All you're gaining on with a home, is against someone who is paying rent.

An investment is an asset with an expected return. Real estate has been one of the best investments in history.
Why do you have to pay the same or more to replace it?
If I were otherwise broke, I could sell my house and go live in another state for the rest of my life. If you rented a house on my block you would be paying $5,000 per month minumum; a 1200 sq ft fixer upper is $2M. Or more...
All I pay is property taxes and upkeep, which is virtually nothing. Pretty darn good investment!
I could rent out our condo for $3,500 EASY.

"A true investment exceeds inflation dramatically." I would say a good investment does that; not all investments are good or even pay off.
Even if you only make a little on a house sale (that you lived in) you saved a ton on rent, right?

If a house were not a good investment, or at least have a respected return, why would anyone buy one? The opportunity cost of a house is huge.
You might as well rent because you are not tied to it.

I'm sure you have a point, but I fail to see it... All good.

 

[billt460]

An investment is an asset with an expected return. Real estate has been one of the best investments in history.
Why do you have to pay the same or more to replace it?
If I were otherwise broke, I could sell my house and go live in another state for the rest of my life. If you rented a house on my block you would be paying $5,000 per month minumum; a 1200 sq ft fixer upper is $2M. Or more...
All I pay is property taxes and upkeep, which is virtually nothing........

I was all but certain you were going to come back with this. You live in California. That is the exception to the rule. It's not that way in most other places in the country, real estate wise. In decades past, a person could live in Chicago, Minneapolis, Cleveland, Indianapolis, or even New York, own and pay off a home through their working career.

Then retire, sell it, move to Florida, the Texas Gulf Coast, or Arizona, and purchase a nice home for far less, and pocket what's left. And usually what was left added to your retirement nest egg quite well.

That is no longer the case. Real estate prices today in the sun belt are exceeding the cost per sq. ft. of the Rust Belt and Midwest. Many by a large margin. Add to that fact, prices in many areas of the Midwest and East have been falling, while prices in the south and the west are skyrocketing.

Many people are quickly finding out they can no longer afford retirement in these climates any longer. The housing costs have risen to a point where it's no longer affordable for them. They're stuck where they are due to these large price fluctuations.

So instead they're looking to places like Missouri, Kentucky, Arkansas, and Tennessee. That is pushing those prices up as well. Rising real estate prices were once thought of as an automatic gimme..... Across the board. I mean homes NEVER go down in value, right?. The 2008 crash showed that was not the case. Houses don't always rise in value. And good, high paying employment in these heavily industrial based states, is no longer guaranteed.

In fact I know many back in Illinois, and here in Arizona, who got caught up in that entire cluster F, and lost everything. They ran with the sheep, and all got slaughtered. Don't be foolish enough to think that can't, or won't happen again. Bad financial history always has a nasty way of repeating itself.

Anyone who has lived their whole life in California, and rode that wave is in a unique position. Just like the people who bought Microsoft and Apple in the 80's. Or IBM in the early 60's. But your in rarefied air. Don't use it as an example of how wonderful real estate is as an investment. And sooner or later that bubble is going to burst...... Just like they all do.

There is also property taxes. As you yourself said, your property taxes are virtually nothing. Buy a $2 million dollar home in Illinois, Minnesota, or New York. Your taxes will be far more than, "virtually nothing". You'll go broke trying to pay them. And you certainly won't be able to afford them in retirement. Paid off home or not.

California is a lot of things. But it's not a good barometer to judge real estate by for the rest of the country. Especially from an investment standpoint. It's a big part of the reason why it's called speculation.

 

[Dave Hess]

VDE doing nicely with rising gasoline prices.

In the past I bought individual companies in this sector, now I just buy an ETF.

 

[JeffKeryk]

I was all but certain you were going to come back with this. You live in California. That is the exception to the rule. It's not that way in most other places in the country, real estate wise. In decades past, a person could live in Chicago, Minneapolis, Cleveland, Indianapolis, or even New York, own and pay off a home through their working career.

Then retire, sell it, move to Florida, the Texas Gulf Coast, or Arizona, and purchase a nice home for far less, and pocket what's left. And usually what was left added to your retirement nest egg quite well.

That is no longer the case. Real estate prices today in the sun belt are exceeding the cost per sq. ft. of the Rust Belt and Midwest. Many by a large margin. Add to that fact, prices in many areas of the Midwest and East have been falling, while prices in the south and the west are skyrocketing.

Many people are quickly finding out they can no longer afford retirement in these climates any longer. The housing costs have risen to a point where it's no longer affordable for them. They're stuck where they are due to these large price fluctuations.

So instead they're looking to places like Missouri, Kentucky, Arkansas, and Tennessee. That is pushing those prices up as well. Rising real estate prices were once thought of as an automatic gimme..... Across the board. I mean homes NEVER go down in value, right?. The 2008 crash showed that was not the case. Houses don't always rise in value. And good, high paying employment in these heavily industrial based states, is no longer guaranteed.

In fact I know many back in Illinois, and here in Arizona, who got caught up in that entire cluster F, and lost everything. They ran with the sheep, and all got slaughtered. Don't be foolish enough to think that can't, or won't happen again. Bad financial history always has a nasty way of repeating itself.

Anyone who has lived their whole life in California, and rode that wave is in a unique position. Just like the people who bought Microsoft and Apple in the 80's. Or IBM in the early 60's. But your in rarefied air. Don't use it as an example of how wonderful real estate is as an investment. And sooner or later that bubble is going to burst...... Just like they all do.

There is also property taxes. As you yourself said, your property taxes are virtually nothing. Buy a $2 million dollar home in Illinois, Minnesota, or New York. Your taxes will be far more than, "virtually nothing". You'll go broke trying to pay them. And you certainly won't be able to afford them in retirement. Paid off home or not.

California is a lot of things. But it's not a good barometer to judge real estate by for the rest of the country. Especially from an investment standpoint. It's a big part of the reason why it's called speculation.

I am not disagreeing with most of what you are saying. Speculation? Every investment is speculation.
If you rent, you are guaranteed to never see a penny back. If you buy, you have a chance to get a return. And if you are lucky enough to pay your property off, you have likely lowered your living costs for a long time. If you need money, you can always rent out a room.
You mention the 2008 crash. How much are those houses worth today?
Is CA unique? Heck yes. The incredible opportunity here drives housing costs.
I see housing as one aspect of a portfolio. When I bought our Los Gatos home, I had hoped for appreciation over time, but it was more because that's where I wanted to live. Jackpot? Yes. But most of my investment gains have been in stock.

 

[JeffKeryk]

I agree with you to not include my house as an investment or part of my net worth.

Why? It's an asset.

 

[billt460]

Why? It's an asset.

Yes, it's an "asset", in that it's worth something if you sell it. But like a car, you can't sell it without buying another one. Unless you want to be walking and and sleeping under a bridge. It's more of a necessary evil.

If you're lucky it will appreciate enough to cover inflation when you sell it. (Homes, not cars). Some do, but today many don't. With a stock, bond, annuity, IRA, or life insurance policy, you can cash them in and call it quits whenever you want, (assuming it has reached maturity, and / or you're old enough). They're liquid assets in that regard.

With a house you can't. Simply because you have to live somewhere. And for many, especially retired people, it really doesn't matter what their home is worth, because they're going to live in it until they drop dead. So for the most part whatever it's worth is pretty much dead money.

They're not going to sell it, or borrow against it. It's basically a pile of bricks and lumber to keep the rain off your head, and warm in the cold. Same as a car is nothing but a rolling money pit, that's only use is to take you where you need to go. Again, a necessary evil.

They're not tangible assets in that regard. They're only considered assets because they're worth something should you sell them.... Which you won't do without replacing them with something similar.

 

[Storm Horton]

I still think that the best investment is and always will be the investment in yourself, in your knowledge.

 

[turnbull]

The only investment I made was my own property. Now I want to invest in a real estate for profit. However, I still think I don't know all the pitfalls. So I learn about it at the moment, found a useful bibliography sources at https://www.topessaywriting.org/samples/economics, and have much planned to read. So as soon as I learn more about smart investments, I'll do it, but not yet.

 

[ecotourist]

Bought an antique chest of drawers in 1971 for $100. Last time I had it assessed it was worth more than $1500.

But my best investment was my education (2 degrees in engineering, an MD and medical specialty training). That paid off financially but more importantly with an interesting career.