Current thoughts in 2011...
- Thread starter akim997
- Start date
NEW -> Contingent Buyer Assistance Program
Since the millionaire next door was mentioned couple time on this thread, I thought that i would share this with you guys. Actually I am a big fan of the author Thomas Stanley as his books have been a guide to me in making my own big financial decisions.
I will type out some of the highlights i made in his most recent book (2009)
page 42:
The Money Pit:
When we make home buying choices, we look at several factors, mostly the carry costs of the home such as mortgage and taxes. I believe the greatest detriment to building wealth is our home/neighborhood environment. The type of home we live in and where we choose to live often takes the greatest toll on our financial wealth, and from it, all other perils flow.
page 43:
Contrary to popluar belief, however, most of the self made millionaires I have studied have one thing in common : They are able to build wealth precisely because they never lived in a home or neighborhood environment where their domestic overhead made it difficult for them to build wealth. In essence, they ran their households like a productive business. It is not only about how much your make (or generate sales) More important, it is how much you keep. And the ?keep? component begins and ends at your home address.
Buying an expensive home is a great way to fool people into thinking that you are wealthy. And it is likely that you will not feel out of place. Many people who live in pricey homes situated in tony neighborhoods are not millionaires. If you want to actually become rich one day, then enhance your chances by living in a modest home ? say, one valued at under $300,000. Most millionaires do not live in homes that have a market value of $1 million or more. About 90% live in homes valued under $1 million.
Page 46:
Once the market value begins to move up beyond the $500,000 level, wealth building productivity moves into unproductive range (i.e. less than 1.00). Buying a more expensive home is likely to decrease the odds of becoming financially independent. With the ?big house? strategy, not only would you face hefty mortgage payments. But ? also?. Property taxes, maintenance costs, HOA, insurance, and utlilties. Buying a bigger house isn?t an investment. Rather it is a lifestyle choice ? and it comes with a brutally large price tag.
To enhance your chances of becoming financially independent, you should live in a home and neighborhood environment that has high wealth-building productivity characteristics. You need to be surrounded by neighbors who have lower incomes than your household generates.
WHAT? And here I was thinking you were my Seoul brother (<-- see what I did there?).
I think you're related to PeterUK (og IHB forums mod)... he has one of those. I do not like the old body style... looks like a clown car. The new XB is much nicer.
Do you like the Nissan Cube too? That's also on my NOT list.
I think you are confusing "Boxster" with "Boxier".
IHO, firstly i want to say that there is no monetary amount that can substitute friendships, family, and deep roots in Irvine. Even if the median home price is $1,000,000 in Irvine, you and Akim will still stay and buy in Irvine as your family and roots are there.
Personally, I think deciding where to live is probably the second most important decision after "who should I marry?"
I know that Johns Creek is not Irvine, but I will say this... Back in 2005, if I told all my friends that Gold will sell for $1500 so go out there buy as much gold they can buy at $500 an ounce... they probably laugh at me.
If i told all the native Georgian to buy in Johns Creek as the median home price there will reach above $500,000, they will probably laugh at me today.
Heck.. even all the Irvine fans on TalkIrvine would laugh at me.
In all seriousness, you are or will be that "Millionaire Next Door". 2-income family saving $5K a month is probably normal, especially when those savings are towards a future-down-payment-of-a-dream-home.
1-income family saving $5K a month, after paying mortgage, now thats a millionaire-next-door stuff.
Having said that I am probably same as akim, when it comes to leading a save-for-future/live-within-means/not-so-boasting life.
1-income family saving $5K a month, after paying mortgage, now thats a millionaire-next-door stuff.
Having said that I am probably same as akim, when it comes to leading a save-for-future/live-within-means/not-so-boasting life.
panda
Well-known member
Since the millionaire next door was mentioned couple time on this thread, I thought that i would share this with you guys. Actually I am a big fan of the author Thomas Stanley as his books have been a guide to me in making my own big financial decisions.
I will type out some of the highlights i made in his most recent book (2009)
page 42:
The Money Pit:
When we make home buying choices, we look at several factors, mostly the carry costs of the home such as mortgage and taxes. I believe the greatest detriment to building wealth is our home/neighborhood environment. The type of home we live in and where we choose to live often takes the greatest toll on our financial wealth, and from it, all other perils flow.
page 43:
Contrary to popluar belief, however, most of the self made millionaires I have studied have one thing in common : They are able to build wealth precisely because they never lived in a home or neighborhood environment where their domestic overhead made it difficult for them to build wealth. In essence, they ran their households like a productive business. It is not only about how much your make (or generate sales) More important, it is how much you keep. And the ?keep? component begins and ends at your home address.
Buying an expensive home is a great way to fool people into thinking that you are wealthy. And it is likely that you will not feel out of place. Many people who live in pricey homes situated in tony neighborhoods are not millionaires. If you want to actually become rich one day, then enhance your chances by living in a modest home ? say, one valued at under $300,000. Most millionaires do not live in homes that have a market value of $1 million or more. About 90% live in homes valued under $1 million.
Page 46:
Once the market value begins to move up beyond the $500,000 level, wealth building productivity moves into unproductive range (i.e. less than 1.00). Buying a more expensive home is likely to decrease the odds of becoming financially independent. With the ?big house? strategy, not only would you face hefty mortgage payments. But ? also?. Property taxes, maintenance costs, HOA, insurance, and utlilties. Buying a bigger house isn?t an investment. Rather it is a lifestyle choice ? and it comes with a brutally large price tag.
To enhance your chances of becoming financially independent, you should live in a home and neighborhood environment that has high wealth-building productivity characteristics. You need to be surrounded by neighbors who have lower incomes than your household generates.
i dont disagree with what was said, but it all has to be taken into context. Principles are great when used for guidance, but may not be applicable in practice. I'm sure it was written with nationwide averages in mind. Would picking up my family and moving to Austin, TX where I can purchase a nice house for under $300K in a nice neighboorhood create an approrpriate environment to facillitate wealth building? Absoulutely. Will it ever happen? Never. I think the "take-away" from the passage is that you shouldn't over-extend yourself to obtain things that will hinder other financial goals such as wealth building, but there's more than one way to skin a cat.
irvinehomeowner
Well-known member
Side topic...akim997 said:
WHAT? And here I was thinking you were my Seoul brother (<-- see what I did there?).
I think you're related to PeterUK (og IHB forums mod)... he has one of those. I do not like the old body style... looks like a clown car. The new XB is much nicer.
Do you like the Nissan Cube too? That's also on my NOT list.
I think you are confusing "Boxster" with "Boxier".
haha.. i love the old body style. i have a couple of friends who have the same car... i like it. we've taken trips in it to Mammoth (about 20 times), Vegas (too many times), Half Dome (1x).... power is lacking but it serves its purpose. I hate the cube, but my same friend who has an BB also has a cube (along with a suburban and 4 other cars)... his wife now drives the cube to work everyday (got rid of her acura RL). hmm.. these same friends however, are caught in their younger days... anyways... cant argue with 35 mpg!
irvinehomeowner
Well-known member
Sorry... can't get over the small wheels.
I think golf carts have bigger rims... what are those 10 inchers?
I think golf carts have bigger rims... what are those 10 inchers?
this chart just doesn't work for irvine or any other nice area such as manhattan beach or westwood or beverly hills or newport beach.
a nice home in woodbury or laguna altura is 1M and the avg net worth there isn't 6.8M. i don't know anyone in irvine that fits into the chart - people live here because they want their kids in nice schools and safe communities. they also don't want to spend a good portion of their lives on the road and they want good clean shopping centers and entertainment nearby.
a nice home in woodbury or laguna altura is 1M and the avg net worth there isn't 6.8M. i don't know anyone in irvine that fits into the chart - people live here because they want their kids in nice schools and safe communities. they also don't want to spend a good portion of their lives on the road and they want good clean shopping centers and entertainment nearby.
Panda said:
Since the millionaire next door was mentioned couple time on this thread, I thought that i would share this with you guys. Actually I am a big fan of the author Thomas Stanley as his books have been a guide to me in making my own big financial decisions.
I will type out some of the highlights i made in his most recent book (2009)
page 42:
The Money Pit:
When we make home buying choices, we look at several factors, mostly the carry costs of the home such as mortgage and taxes. I believe the greatest detriment to building wealth is our home/neighborhood environment. The type of home we live in and where we choose to live often takes the greatest toll on our financial wealth, and from it, all other perils flow.
page 43:
Contrary to popluar belief, however, most of the self made millionaires I have studied have one thing in common : They are able to build wealth precisely because they never lived in a home or neighborhood environment where their domestic overhead made it difficult for them to build wealth. In essence, they ran their households like a productive business. It is not only about how much your make (or generate sales) More important, it is how much you keep. And the ?keep? component begins and ends at your home address.
Buying an expensive home is a great way to fool people into thinking that you are wealthy. And it is likely that you will not feel out of place. Many people who live in pricey homes situated in tony neighborhoods are not millionaires. If you want to actually become rich one day, then enhance your chances by living in a modest home ? say, one valued at under $300,000. Most millionaires do not live in homes that have a market value of $1 million or more. About 90% live in homes valued under $1 million.
Page 46:
Once the market value begins to move up beyond the $500,000 level, wealth building productivity moves into unproductive range (i.e. less than 1.00). Buying a more expensive home is likely to decrease the odds of becoming financially independent. With the ?big house? strategy, not only would you face hefty mortgage payments. But ? also?. Property taxes, maintenance costs, HOA, insurance, and utlilties. Buying a bigger house isn?t an investment. Rather it is a lifestyle choice ? and it comes with a brutally large price tag.
To enhance your chances of becoming financially independent, you should live in a home and neighborhood environment that has high wealth-building productivity characteristics. You need to be surrounded by neighbors who have lower incomes than your household generates.
then i guess panda's point would be what a lot of people say about the OC fakers... people who buy more house than they really should... look at panda, he's got a mansion in GA in the irvine version of the ATL for a fraction of the cost. that being said, would/could i move out there? i dont think so.
i think popular areas are a bit different... NYC, LA, etc... it's just more expensive to live in certain places. If everyone was focused on cheap housing, and low cost of living, detroit would be thriving!!! some people argue that true pricing needs to be circa 1998-2000 pricing to be realistic, if that were the case, i'd buy as many houses as i could...
i think popular areas are a bit different... NYC, LA, etc... it's just more expensive to live in certain places. If everyone was focused on cheap housing, and low cost of living, detroit would be thriving!!! some people argue that true pricing needs to be circa 1998-2000 pricing to be realistic, if that were the case, i'd buy as many houses as i could...
on a separate note, i did get some good news regarding my pending purchase. the prop tax report states the AD bond matures in 2023/2024. 12+ years of mellos @ $2K per year isn't too shabby for a house built in 2008!!! (present value @ 4% = $18,770). For me personally, the $18K+ is worth living in a nicer newer neighboorhood with pocket parks and good schools. now if somebody can just do something about the prices....hmmm
supply and demand will set irvine pricing and supply will be controlled by icdc and lennar for the foreseeable future - like they pulled back the last few years when demand waned they will probably adjust going forward to keep profits intact and land values high. that is just how it is and will be. most of us aren't trying to change the world let alone the irvine housing market - just trying to make a nice home for our families and therefore don't really care - it all just makes for fun water cooler talk before we head home to live under bren's umbrella.
panda
Well-known member
Akim,
"If everyone was focused on cheap housing, and low cost of living, detroit would be thriving!!!" I am not sure if i fully agree with the statement. I think cities like Detroit and Chicago are in its decline where Atlanta is an emerging and up and coming city.
Scfan mentioned that people want to buy in Irvine due to people live here because they want their kids in nice schools and safe communities and they also don't want to spend a good portion of their lives on the road and they want good clean shopping centers and entertainment nearby and I would agree with him.
Irvine was recently ranked 15th as the wealthiest city in the nation (with population above 70,000) whereas Newport Beach was ranked #1. Irvine has a per capital income of 41,090 and 11.7% of Irvine makes over $200,000. In Newport Beach the per capital income is $86,586 and 28.6% of Newport Beach makes over $200,000. I purchased a new home in a gated golf course community in the city of Johns Creek (population of 72,400) where the average income is $133,419 and 16.2% make over $200,000. Akim, my home is 4000 sq/ft and it is the smallest house in my subdivision where homes can range up to $5 million. My final purchase price including all the upgrades came out to $480,000 and my property taxes are 0.8%. My community includes two gates : one in the south and one in the east of the subdivision with a 24 hour guard and tight security in both locations. I could purchase a $1,000,000 home and pay $8,000 a year in property taxes in my subdivision.
Irvine home prices YOY is down 3.9% at a median price of $590,3000
Johns Creek home prices YOY is up 12.3% at a median price of $284,200
The area has large and clean shopping centers and Atlanta has the fastest growing population for Koreans and 3rd fastest growing Asian population in percentage terms. Within the 30 mile radius of where I live, there are 5 new Korean shopping center locations the size of each of 5 location are the size Diamond Bar Plaza in Irvine.
In terms of weather, if Irvine was ranked in the top 1%, I would say that Atlanta is ranked in the top 10%. Atlanta is on a high elevation where the weather does not get as hot as Dallas, Phoenix, or Vegas in the summers. In February 2011, Atlanta?s weather has been in the 60s for 20 days out of 28.
In terms of schools, according to schooldigger.com rankings, 4 elementary schools are ranked within top 10 among 1097 elementary schools. I am in a school district where the middle school is ranked #3 and high school is # 10 in the state. Which is probably comparable to the Irvine school districts.
Gwinnett Chamber of Commerce is now looking to add an new satellite airport to Atlanta Hartsfield Airport in Briscoe Airport in Lawerenceville. One of the models they are studying is John Wayne Airport. When the new commercial airport opens, the distance between Briscoe and Atlanta would be almost identical to that of John Wayne and LAX.
"If everyone was focused on cheap housing, and low cost of living, detroit would be thriving!!!" I am not sure if i fully agree with the statement. I think cities like Detroit and Chicago are in its decline where Atlanta is an emerging and up and coming city.
Scfan mentioned that people want to buy in Irvine due to people live here because they want their kids in nice schools and safe communities and they also don't want to spend a good portion of their lives on the road and they want good clean shopping centers and entertainment nearby and I would agree with him.
Irvine was recently ranked 15th as the wealthiest city in the nation (with population above 70,000) whereas Newport Beach was ranked #1. Irvine has a per capital income of 41,090 and 11.7% of Irvine makes over $200,000. In Newport Beach the per capital income is $86,586 and 28.6% of Newport Beach makes over $200,000. I purchased a new home in a gated golf course community in the city of Johns Creek (population of 72,400) where the average income is $133,419 and 16.2% make over $200,000. Akim, my home is 4000 sq/ft and it is the smallest house in my subdivision where homes can range up to $5 million. My final purchase price including all the upgrades came out to $480,000 and my property taxes are 0.8%. My community includes two gates : one in the south and one in the east of the subdivision with a 24 hour guard and tight security in both locations. I could purchase a $1,000,000 home and pay $8,000 a year in property taxes in my subdivision.
Irvine home prices YOY is down 3.9% at a median price of $590,3000
Johns Creek home prices YOY is up 12.3% at a median price of $284,200
The area has large and clean shopping centers and Atlanta has the fastest growing population for Koreans and 3rd fastest growing Asian population in percentage terms. Within the 30 mile radius of where I live, there are 5 new Korean shopping center locations the size of each of 5 location are the size Diamond Bar Plaza in Irvine.
In terms of weather, if Irvine was ranked in the top 1%, I would say that Atlanta is ranked in the top 10%. Atlanta is on a high elevation where the weather does not get as hot as Dallas, Phoenix, or Vegas in the summers. In February 2011, Atlanta?s weather has been in the 60s for 20 days out of 28.
In terms of schools, according to schooldigger.com rankings, 4 elementary schools are ranked within top 10 among 1097 elementary schools. I am in a school district where the middle school is ranked #3 and high school is # 10 in the state. Which is probably comparable to the Irvine school districts.
Gwinnett Chamber of Commerce is now looking to add an new satellite airport to Atlanta Hartsfield Airport in Briscoe Airport in Lawerenceville. One of the models they are studying is John Wayne Airport. When the new commercial airport opens, the distance between Briscoe and Atlanta would be almost identical to that of John Wayne and LAX.
usctrojancpa
Well-known member
Northpark Squarescfan said:
irvinehomeowner
Well-known member
@panda:
But it's not Irvine.
But it's not Irvine.
panda
Well-known member
irvinehomeowner said:
IHO, firstly i want to say that there is no monetary amount that can substitute friendships, family, and deep roots in Irvine. Even if the median home price is $1,000,000 in Irvine, you and Akim will still stay and buy in Irvine as your family and roots are there.
Personally, I think deciding where to live is probably the second most important decision after "who should I marry?"
I know that Johns Creek is not Irvine, but I will say this... Back in 2005, if I told all my friends that Gold will sell for $1500 so go out there buy as much gold they can buy at $500 an ounce... they probably laugh at me.
If i told all the native Georgian to buy in Johns Creek as the median home price there will reach above $500,000, they will probably laugh at me today.
Heck.. even all the Irvine fans on TalkIrvine would laugh at me.
irvinehomeowner
Well-known member
Exactly.... which is why when people say stuff like you should only spend this much, there is a world outside of Irvine, or fundamentals say this... there has to be some perspective... not everyone has the flexibility or opportunity to buy cheaper elsewhere... even if only 15 minutes away (without traffic obv).Panda said:
Agreed... although there are other important things like "What kind of career should I pursue?", "Should I take care of my health?", "Do I use the icicle gun or the bungy cord?", or probably THE most important -- "Do I get a 3-car garage or a 2-car garage home?".
Well... hindsight is 20/20. When Irvine houses were $175/sft in 2000... people thought Irvine was overpriced.
We'll see. The lesson here is with any commodity (gold, stocks, real estate)... it's best guesswork and trends. Just buy to live... don't worry so much about market appreciation... just worry about your own appreciation of the home.If i told all the native Georgian to buy in Johns Creek as the median home price there will reach above $500,000, they will probably laugh at me today.