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Ask YC: How bad is the economy?

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Re: Ask YC: How bad is the economy?

#51

Post by jon_dahl »

josephl wrote: post #42

I have a related question. Do you guys think it is a good time to invest in real estate. I live in Southern CA, so property is pretty expensive as it is. Right now, I'm looking at places for approx. $300k that were approx. $500k two years ago. Given that fact that interest rates are not bad either (5.5-7%), it does not seem like a bad time (given that I will have no problems making the payments). This would be my fir…

Are you looking to own your own home, or make money investing in real estate? If you're talking the former, and you can afford it (20% down-payment, non-ARM, comfortable monthly payment), then I'd probably do it personally.

If you're doing it as an investment, I'd hold off unless you have a lot of money invested already and are looking to diversify. "They" are saying that home prices may slide for another year or two at least. Of course, "they" are often wrong...

Re: Ask YC: How bad is the economy?

#52

Post by biohacker42 »

A lot of people say that things could get as bad as the great depression.

That is true in the absolute sense, but wrong in the relative.

What I mean is that we are today much richer then people were just before the great depression.

If the economy dives deeper and stays down longer we would still be much better of then people were during the great depression.

That's not my opinion, that's fact, because it is what happened in Japan.

Japan had a cheap money, stock and real estate fueled boom and then a true depression which was deeper and longer then the great depression.

But because they were much, much, much better of to start with, their bottom was still far above the great depression's bottom.

The same principle would apply to America.

As other people have mentioned cash is king in a recession/depression.

Keep in mind cash can lose its value if the fed is trying to stimulate spending by inflating the currency.

Gold is a good hedge but gold is taxed at very high rates (22%, not sure) but government bonds are tax free.

It's probably a good idea to hold both.

And if the fed is attempting to save us by printing money, debt IS a good thing to have.

Inflation is the debtor's friend.

Re: Ask YC: How bad is the economy?

#53

Post by josephl »

jon_dahl wrote: post #51
josephl wrote: post #42

I have a related question. Do you guys think it is a good time to invest in real estate. I live in Southern CA, so property is pretty expensive as it is. Right now, I'm looking at places for approx. $300k that were approx. $500k two years ago. Given that fact that interest rates are not bad either (5.5-7%), it does not seem like a bad time (given that I will have no problems making the payments). This would be my fir…

Are you looking to own your own home, or make money investing in real estate? If you're talking the former, and you can afford it (20% down-payment, non-ARM, comfortable monthly payment), then I'd probably do it personally. If you're doing it as an investment, I'd hold off unless you have a lot of money invested already and are looking to diversify. "They" are saying that home prices may slide for another year or two…

I'm looking to own my own home. I've got 10% down, non-ARM and semi-conformable monthly payment (relies on two incomes).

Re: Ask YC: How bad is the economy?

#55

Post by menloparkbum »

coglethorpe wrote: post #54

I'm currently looking for a new job. I've noticed that the demand for my skills is as high as in 1999, but the market rate for those skills has dropped nearly 20%.

That's because you are old (I've experienced the same thing.) Salaries for recent grads are higher than ever.

Re: Ask YC: How bad is the economy?

#56

Post by hhm »

13ren wrote: post #50
mrtron wrote: post #25

Earlier quoted context omitted.

Any time you hear that it is time to invest! As painful as the current situation is for some, it certainly is a better buying opportunity than a few months ago.

And watch Warren Buffett. Is he buying? Is he tap dancing?

What is he doing now?

Re: Ask YC: How bad is the economy?

#57

Post by xiaoma »

known wrote: post #14

Very bad. Stay away from Stock Markets.

On the contrary, there are more attractive bargains on the stock market than I've seen since 2001. If you insist on a cheery consensus, you'll pay dearly for it. Just look at what happened to everyone who bought in the late '90s.

Now is an excellent time to be an investor.

Re: Ask YC: How bad is the economy?

#58

Post by gtani »

The advice here is good and well-intentioned, for the most part, but you need to get recommendations form colleagues and friends for an accountant and fee-based financial planner in your area that you trust, explain your tax, real estate, financial holdings, and family situation, and work through different scenarios.

Re: Ask YC: How bad is the economy?

#60

Post by thomasmallen »

Let me put it this way: I woke up at 6 this morning to the words "biggest bank failure in US history," and immediately thought to myself, "Well, I woke up to the depression." After listening for a little while, I realized it was the same WaMu news from last night, so not a big deal. But things are going downhill and it's due a a fundamentally flawed economy woefully dependent on credit.

I expect tough times ahead, but I'm not too concerned. I have real, technical skills that should keep me working through whatever may come. One thing that I'm doing is brushing up on my DBA abilities, because I figure that no matter how bad things get, maintaining databases will not be an option: They're part of the infrastructure now.

Call me RMS, but now is the time to make sure that your skills with open source software are top-notch. If things go down the toilet, you can bet that businesses will be hesitant to use expensive Microsoft products when free alternatives are around. Now, Microsoft would hopefully adjust to the decrease in demand, but I'll take the almost guaranteed increase in demand any day over that gamble.

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