Half of old Americans have no money saved

Yes we all know mortgages are better, we helped our kids get on the property ladder and climb it.
What is the point you are making?

 

That is the type of mentality that got the US into an economic bubble though. Many people were engaging in a practice that was not sustainable in the long-term, simply pulling more money out of their houses. This fueled a bubble, and when they began running out of money the economy crashed.
I think you have to be very careful with that type of idea.

 

You have to be careful with any investment you make. Many people in the UK paid religiously into their pensions only to see the return wiped out by poor investment and crazy fees.
But if you are sensible you can get a very good return by investing in property (even the home you live in)
Incidentally you can't pull money out of your house if its not there, so all you are doing is reducing your children's inheritance.

 

By the way... just in case anyone thinks my thrifty family had a deprived life. I had the best childhood ever! As a family we went on weekend road trips exploring the countryside camping/hiking/fishing/rock & arrowhead-hunting or visiting little towns and their quaint antique shops. Every summer my father took off work [without pay] to take our family on a week long vacation road trip. When I was a child my father drove us to visit Disneyland [California] twice. But our family vacations weren't ordinary vacations. My father always made our vacations great fun and educational adventures exploring America's awesome natural and historic wonders. We visited, hiked and camped out in just about every National Park west of the Mississippi [and many more east.] We also visited many historical sites... like Civil War battlegrounds/memorials in the east... and Mesa Verde and Zuni ruins in the west.

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When I bought my house in Dallas 20 years ago... I thought it odd at the time that houses were cheap compared to what many people were paying for luxury cars/trucks that go down in value as soon as you drive them off the car lot.

A few years ago, I was debating whether or not to downsize - sell my too large paid off house in a nice convenient area to buy a smaller house nearby. The problem was... all the smaller houses [even rundown houses in not nice areas] were selling for more than what I originally paid for my house. Yes, my house had also greatly increased in value... but there was not enough difference to want to trade down. So, I still live in my too large house... which fortunately, is still increasing in value and I have no financial need to sell it.

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i spoke with facts... you may not like them, but they are true none the less

the min wage in the past kept up with inflation, it's not today

yes, there are other issues too, do not deny that, such as excessive foreign outsourcing and excessive foreign imports

not to mention the quality of our products today do not last as long as in the past due to planned obsolescence

"by your government"

is it not your government too, which government is yours?

 

Unless there happens to be a bubble and that bubble pops.
We do have to be careful about making generalisations.

 

My Govt reduced interest rates to 'help' citizens with debt downpayment during the pandemic. What has actually happened, is the cost of housing has gone up by as much as 30% in that period, with no signs of slowing down. That low interest rate wasn't just attractive to lower income people trying to pay for their home .. it was also attractive to those with plenty of money - and it's they who're pushing up prices with their boundless appetite for property. The upshot - those this was intended to help, are now even less able to pay for a home.

 

No, not really. Property has been on a steady upwards trajectory for many decades. Popping bubbles are transient, and don't impact the overall trajectory.

Remember .... land is finite. Anything finite cannot decrease in value - it can only increase.

 

I think I made the point pretty clearly. That being .. failure to make good decisions throughout life, is why people end up poor in old age.

 

I don't think it's any coincidence a lot of Progressives who are not financially suffering have government jobs.

A lot of people reading this will be too stupid and senseless to know what that means.

Let's just say that's a career where ability to financially manage your own money is not as important.

 

Again, you don't seem to understand what downsizing means. It doesn't mean 'pulling money out of your house', it means SELLING your house.

 

I don't think you understood what I meant.

The idea of downsizing usually makes more sense in theory than it does in actual practice. That has been what I have seen.

(exceptions if you're planning to move to another region anyway, or if you bought a home you couldn't afford, but that's not what I'm talking about)

People are stupid if they view their own home like a bank account they can take money out of, or think it's like money in the bank because they could just sell it and buy a cheaper house. It's rarely so simple.

 

The other option is to buy a place for cash somewhere with low property values, and live in that while renting out your big family home in the high value area.

 

Of course it makes sense. You sell that big family home you no longer need, buy a much cheaper property, and live off the profits made when selling the big home. People do it all the time. In fact almost everyone ends up doing that, these days. Very few people remain in a large empty family home until they die. Those days are long gone.

 

The fact that people would be forced or pressured to do that due to financial considerations demonstrates a financial poverty.

Well that's the way I see it. Isn't it the way you see it?

 

That's so odd, to me. Why on earth would you see it as some kind of loss or hardship?

People do it because they very much WANT to do it.

 

Further .. what kind of a 'win' is it to rattle around in your old age in a very big house requiring huge amounts of maintenance, and which leaves you cash poor?

 

You might have a point if the house is old and falling apart, and they are moving into a less nice newer house that has fewer problems.

Still, I don't think that's the case most of the time.

 

Most people (especially elderly) do not want to move out of the house they've lived in all their lives due to money.

crank, I'm surprised at you. You normally talk common sense. Maybe you're a little off today.

 

No, that has nothing to do with it. They could be selling a newer house and moving into a much older place. It's about freeing up your money so you can live, and freeing up your time and energy from all that maintenance required in the large family home

 

1) That's the very OPPOSITE of commone sense! Staying in a place that is no longer fit for purpose, is an emotional and impractical position to take, and is working against your own interests.

2) Selling off your big family home when it's no longer serving its purpose, is the most common sense option possible.

 

I don't think the size of the home has much to do with the amount of maintainence or cost it takes to keep up that home.
Yes, there are a few older people who sell their home due to the yard being too big, but that is not many of them, in my experience.
Usually old people will have to become so incapacitated they require a care home before they ever consider selling their house.

 

Again, that seems like a purely emotional choice - and a slightly selfish one at that! What if the sale of the big family home could benefit your adult children (assuming you don't need the money yourself)? I know many people who gave the entirety of the profits from the family home to their kids, so they could use their inheritance immediately. If you CAN downsize to free up that money for your kids, why wouldn't you?

 

The transactional costs are usually not worth it. Then there is the problem of moving, which can sometimes carry big costs. One of my family members for example spent 70,000 in moving expenses, including several months of storage. Then there is the risk that something could go wrong. The new house may have a problem that you did not realise before you moved in, and it could be very expensive to fix.