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Companies are essentially subsidizing $1M (or more now?) mortgages if you are willing to go into their SV offices. You don't have to retire there! Just sell the house and move on.
I hadn’t heard of this, what are some example companies I can look at?
Earlier quoted context omitted.
Not if you bought a couple decades ago or inherited from your parents.
Not sure how it works in every state, but my property taxes are liable to increase year to year, for a home I own. Are you saying this is not the case in California? They just true up property taxes for a property upon next sale?
Companies are essentially subsidizing $1M (or more now?) mortgages if you are willing to go into their SV offices. You don't have to retire there! Just sell the house and move on.
It’s hard to leave and call anything else retirement if you’re just considering climate, weather, and nature. My family did end up leaving the area but it was hard. I am still working. Wouldn’t surprise me if I return some day.
Doesn't this depend heavily on inflation? With the ballooning US debt, how do people imagine the government will continue to pay interest without massive inflation in a few decades?
The 4% rule accounts for inflation. The stock market on an average gives you 7% a year in returns adjusted for inflation. The 4% gives you enough cushion in case of economic turmoil.
The interest we pay on the debt has just passed defense spending this year as a percentage of the federal budget.
I cant imagine how 4% inflation will continue to be the norm as the government has to print more and more money to pay for this stuff.
The funny thing is that I just plucked 5MM out of a hat for my number 5 or so years ago when asked and I guess this analysis supports my intuition. The one big problem with renting is instability. If the owner decides to sell the property, it may be difficult to find something equivalent on your terms or you may be forced to hop around a few times before settling.
Doesn't this depend heavily on inflation? With the ballooning US debt, how do people imagine the government will continue to pay interest without massive inflation in a few decades?
You can build a quite safe stock/bond portfolio yielding 8% on distributions alone. Why would you aim to sell 4% of principal a year when you can avoid touching the principal at all at close to twice the yield?
Large caps are also at quite high valuations historically... earnings grow over time, but valuation multiples are cyclical. There are so many safe small caps at depressed, recessionary valuations right now.
Look at any number of the ~1B market cap or under REITs that often yield 7%+ right now and have strong balance sheets and good growth prospects
Owning 10,000 apartment buildings isn't really any more differentiated or safer than owning 1000. Especially not when you're paying 1.5x the multiple for it.
The growth in popularity of passive investing has really inflated the spread in valuation between large/small cap.
EDIT: The negative engagement on this comment is strongly explanatory as to why there's so much opportunity in the market right now.
Earlier quoted context omitted.
Not if you bought a couple decades ago or inherited from your parents.
Not sure how it works in every state, but my property taxes are liable to increase year to year, for a home I own. Are you saying this is not the case in California? They just true up property taxes for a property upon next sale?
Doesn't this depend heavily on inflation? With the ballooning US debt, how do people imagine the government will continue to pay interest without massive inflation in a few decades?
The 4% rule accounts for inflation. The stock market on an average gives you 7% a year in returns adjusted for inflation. The 4% gives you enough cushion in case of economic turmoil.
Earlier quoted context omitted.
Not if you bought a couple decades ago or inherited from your parents.
Not sure how it works in every state, but my property taxes are liable to increase year to year, for a home I own. Are you saying this is not the case in California? They just true up property taxes for a property upon next sale?