How about that stock market!

[311boogieman]

But if you own a home worth a million $ how are you not a millionaire?

Because a home is not liquid cash and most often actually owned by a bank.

I think a better picture of your net worth is one that does not include your primary residence. You have to live somewhere. I would, however, include any mortgage and interest owed in the calculation of liabilities, and any 2nd, 3rd, etc., mortgages and any HELOCs where you owe money.

As usual, you said this much more eloquently than I ever could

 

[Floyd Eye]

Because a home is not liquid cash and most often actually owned by a bank.



As usual, you said this much more eloquently then I ever could

Unless you own your house(s).

 

[JackTripper]

I'm still holding some cash waiting for a major correction, or crash. The number of US Boomer retirees making their first RMD payment is continuing to rise. The peak birth years of Boomers were 1953 - 1957, with 1957 being the highest; then which slowly dropped from 1958 - 1964, still larger than subsequent generation birth rates. Those born in 1953 hit RMDs at 72 in 2025, each year between now and 2037 many more Boormers will have to sell to cover their RMDs. They may sell investments, homes, vacation homes, rental properties, small businesses, classic cars, bikes, boats, etc., which will drive the markets down, 1957 - the largest number of births in US history - start RMDs in 2030.

For those that don't know, RMDs increase each year until you have zero tax deferred holdings.

I really can't sit on the sidelines with my current cash until 2030 missing 4 years of compounding, but I will save a "meaningful" amount of cash for whenever a major correction, drop or crash occurs in 2028 or beyond. Would be great if the crash, with 30% to 60% loss of value happened in 2026 or 2027 for me personally. I choose the bear.

Are you assuming that Boomers born in the 1950s will trigger a market crash/correction because of RMDs? If so, you are missing the timing lag. Most folks hitting their 70s right now are probably in fixed/cash investments even if it's a traditional 60/40 split, so there is no immediate need to liquidate a stock to cover an RMD. And for the top 1-2 percenters, with major stock investments (that will outlive them), rental properties, businesses, boats, cars, etc--that's likely rolled into legacy planning for their heirs, which is yet another lag.

 

[rsm]

Are you assuming that Boomers born in the 1950s will trigger a market crash/correction because of RMDs? If so, you are missing the timing lag. Most folks hitting their 70s right now are probably in fixed/cash investments even if it's a traditional 60/40 split, so there is no immediate need to liquidate a stock to cover an RMD. And for the top 1-2 percenters, with major stock investments (that will outlive them), rental properties, businesses, boats, cars, etc--that's likely rolled into legacy planning for their heirs, which is yet another lag.

The largest contingent of Boomers hitting RMDs in the next few years is one thing; downsizing homes, selling small businesses are others.

I'm in the market for a sailboat, and boomers are abandoning boats in the largest numbers ever seen; marinas have abandoned boats that take time to get to auction. Most are in need of significant work, but some are ready to sail. Older boats are getting more difficult to insure, so they are being abandoned too...many of these boats are scrapped. While not significant to the markets, it's another sign of boomers leaving markets; selling homes, classic cars too, and music gear, golf, and many other leisure hobby industries are losing their biggest contingent of customers and fewer younger generations are filling in the vacancies...there's a slow, growing economic shift that is difficult to see in broader markets IMO

boomers quietly aging out and leaving markets of all kinds are a slow death for many areas of the economy, which may provide some unique opportunities (like sailboats for me),

there are several other factors that lead me to believe we're set for another major correction, of 30% or more. Hopefully before 2028. I'm not trying to predict it or time it; I'm just ready to act, and take advantage of whatever happens in the markets. Buying at a 30% or more discount would be great, even if it takes years to recover since it's not money I need for living expenses; it's generational wealth I'm growing to leave behind.

 

[psychodave]

it's generational wealth I'm growing to leave behind.

This is what I’m working for…. I’m trying to leave a legacy behind so my kids never have to worry about money. I’m making them learn that with the same ideals, they can help create a massive legacy.

 

[311boogieman]

@JackTripper - man have not seen you in a hot minute

@rsm - my father in law finally got his boat slip sold after like 3 years. 3 years of monthly payments with no boat and no use. And we had to spruce up his house boat ad or it never would have sold.

@psychodave - same

 

[rsm]

@JackTripper - man have not seen you in a hot minute

@rsm - my father in law finally got his boat slip sold after like 3 years. 3 years of monthly payments with no boat and no use. And we had to spruce up his house boat ad or it never would have sold.

@psychodave - same

finding a slip and paying for it is whole other boating challenge. I've been looking for mooring balls around here - marinas don't have any. The closest are a few hours away. Great to hear he was able to sell his slip.


the sailboat market is in upheaval in many places and it's probably going to get worse...though I still haven't found the sailboat I want and a discounted price, there are many sailboats that aren't selling, even from around 2020; the pandemic drove up demand and prices; and many manufacturers scaled up production too long and now there are too many new boats for too few buyers, which are pushing late-model used boats to need discounts but many sellers won't lower prices. Boat dealers / brokers are selling some new boats at discounts - including new boats still sitting from 2022-2023.

They don't make the catamaran I want new, but I can't find it used and if I did it wouldn't get hull insurance only liability, and at a high cost. The new boats with deep discounts I find are too big for my needs, and still more than I want to pay.

Too many factors have to align: right boat, right condition, right size, right price, and insurable + an affordable marina slip or mooring ball. I've been looking for the past several years. The boats I like when I find them are usually on the other side of the world and would cost a small fortune to get her, and I don't have the skills to sail across an ocean...

I may reset my expectations and get a newer, smaller coastal cruiser that's trailerable...but it would be too small and too dangerous to use to island hop the Caribbean alone, and not big enough for a crew. The larger used boats need too much work and can't get hull insurance. To get a new larger boat I want is costly and has a three year waiting list, and isn't a brand/model that's in oversupply.

 

[BABMusic]

Not a big concern to probably anyone here, but that bitcoin Strategy stock (MSTR), might be about to collapse. I've long been doubtful that Michael Saylor knows what he's doing, as the stock just sounds like a disaster.

 

[rsm]

Unless you own your house(s).

It's not a liquid asset; you need a place to live so most people don't consider selling their house to pay bills unless it's a last resort vs money in the markets.

I think including the value of your house / primary residence artificially inflates net worth. Investment properties, vacation homes, etc., should be included in net worth because you could sell those and still have a place to live.

When I calculate my net worth, I don't include the value or equity of my home, but I do include the remaining mortgage balance as a liability.

I could pay off my house today, but my mortgage rate vs my ROI rate of investments makes that a waste of money until my mortgage balance gets low enough that the amount owed on the mortgage vs the income/growth from investing that amount changes sides. Getting a little tax break on mortgage isn't huge but still worth it.

 

[rsm]

Not a big concern to probably anyone here, but that bitcoin Strategy stock (MSTR), might be about to collapse. I've long been doubtful that Michael Saylor knows what he's doing, as the stock just sounds like a disaster.

I invest in digital currency hedge / derivative ETFs that do well when the currency goes up or down; so far so good.

At this point, for me, investing directly in Bitcoin is too high a barrier to entry. I know people that got in when one BC was a few/several thousand dollars, and did very well. At $30K or less for one BC, maybe....but at $90K+, no thanks....I'd rather get Berkshire Hathaway at those share prices.

 

[BABMusic]

I invest in digital currency hedge / derivative ETFs that do well when the currency goes up or down; so far so good.

At this point, for me, investing directly in Bitcoin is too high a barrier to entry. I know people that got in when one BC was a few/several thousand dollars, and did very well. At $30K or less for one BC, maybe....but at $90K+, no thanks....I'd rather get Berkshire Hathaway at those share prices.

Shoot, I bought my first bitcoin when it was $3,000, and I thought that was way overpriced at the time. My biggest regret though was not buying more Ether when it was $80. A friend of mine in Denver told me to buy at that time, and he put in $20,000 when Ether was $80. Do the math. The problem from him was, a lot of his Ether was on an exchange, and that exchange got a bunch of Ether stolen. He lost a lot of his money, but I believe he came out okay. There was a lawsuit against that exchange, but not sure if it went in favor of those who lost their money.

 

[Floyd Eye]

It's not a liquid asset; you need a place to live so most people don't consider selling their house to pay bills unless it's a last resort vs money in the markets.

I think including the value of your house / primary residence artificially inflates net worth. Investment properties, vacation homes, etc., should be included in net worth because you could sell those and still have a place to live.

When I calculate my net worth, I don't include the value or equity of my home, but I do include the remaining mortgage balance as a liability.

I could pay off my house today, but my mortgage rate vs my ROI rate of investments makes that a waste of money until my mortgage balance gets low enough that the amount owed on the mortgage vs the income/growth from investing that amount changes sides. Getting a little tax break on mortgage isn't huge but still worth it.

So you think liquid asserts should be the only thing that counts ? You sound like a stockbroker.

Sorry dude, but I got way more worth in things I don’t plan on selling than things that are expendable.

By the way, notice I said houses ? I have more than one. Paid in full. None for sale.

 

[JackTripper]

The largest contingent of Boomers hitting RMDs in the next few years is one thing; downsizing homes, selling small businesses are others.

I'm in the market for a sailboat, and boomers are abandoning boats in the largest numbers ever seen; marinas have abandoned boats that take time to get to auction. Most are in need of significant work, but some are ready to sail. Older boats are getting more difficult to insure, so they are being abandoned too...many of these boats are scrapped. While not significant to the markets, it's another sign of boomers leaving markets; selling homes, classic cars too, and music gear, golf, and many other leisure hobby industries are losing their biggest contingent of customers and fewer younger generations are filling in the vacancies...there's a slow, growing economic shift that is difficult to see in broader markets IMO

boomers quietly aging out and leaving markets of all kinds are a slow death for many areas of the economy, which may provide some unique opportunities (like sailboats for me),

there are several other factors that lead me to believe we're set for another major correction, of 30% or more. Hopefully before 2028. I'm not trying to predict it or time it; I'm just ready to act, and take advantage of whatever happens in the markets. Buying at a 30% or more discount would be great, even if it takes years to recover since it's not money I need for living expenses; it's generational wealth I'm growing to leave behind.

I get your goal. I'm sure you are aware timing markets can sometimes be a trap with opportunity costs because you can spend more time on the sidelines rather than in the game. The longer you are consistently in the game, the better chances for reaching your goal.

Don't know if Boomer's are checking out entirely. A lot are staying put in their homes because the cost to downsize to a smaller house is competitive and not necessarily cheaper (first time home buyers are competing in the same market for smaller homes). I think a lot of Boomer's feel locked into their homes whether they like it or not. And for recreational/leisure purchases, it could be because Boomer's are leaving it behind or it could be that the younger generations are priced out of it. They feel price inflation but don't have the benefit of asset inflation (homes, investments, etc) to offset it. It's a weird economy right now for sure

 

[JackTripper]

@JackTripper - man have not seen you in a hot minute

Been buried in new capers at my job, no time for the usual banter here , although I still lurk in the main section to remind myself of how old I'm getting.

 

[rsm]

I get your goal. I'm sure you are aware timing markets can sometimes be a trap with opportunity costs because you can spend more time on the sidelines rather than in the game. The longer you are consistently in the game, the better chances for reaching your goal.

Don't know if Boomer's are checking out entirely. A lot are staying put in their homes because the cost to downsize to a smaller house is competitive and not necessarily cheaper (first time home buyers are competing in the same market for smaller homes). I think a lot of Boomer's feel locked into their homes whether they like it or not. And for recreational/leisure purchases, it could be because Boomer's are leaving it behind or it could be that the younger generations are priced out of it. They feel price inflation but don't have the benefit of asset inflation (homes, investments, etc) to offset it. It's a weird economy right now for sure

In the game too, 4/5 is invested; 1/5 holding in cash for a buying opportunity on a big drop; in the market, real estate or sailboat.

The cash is earning a modest amount of interest - compounded weekly, paid monthly; but certainly not at market levels.

Just an observation on the Boomers leaving; sailboats as I mentioned, also classic cars...I watch the auctions, and there are some great bargains in cars that just 5 years ago were getting much more money; these are cars that appeal to Boomers and some GenX likely sentimental such as the car their dad had or always wanted. Still waiting for an original numbers matching Corvette for the years I'd want to come up for a great price.

 

[BABMusic]

I also have a lot of cash on the sidelines, because I don't want to lose my ass when the AI stocks plunge. I might be wrong, and I might miss out on some gains, but it's just too risky in my view right now to put too much money in these AI stocks.

 

[Thumbpicker]

I invest in digital currency hedge / derivative ETFs that do well when the currency goes up or down; so far so good.

At this point, for me, investing directly in Bitcoin is too high a barrier to entry. I know people that got in when one BC was a few/several thousand dollars, and did very well. At $30K or less for one BC, maybe....but at $90K+, no thanks....I'd rather get Berkshire Hathaway at those share prices.

Yes same with Gold I just laughed when I saw people lining up recently. Also technology stocks atm - although that's disputable I guess, but for me they are too high - I'll wait for a collapse. When the idiots line up and the price is through the roof you know they are buying high!

 

[rsm]

Yes same with Gold I just laughed when I saw people lining up recently. Also technology stocks atm - although that's disputable I guess but for me they are too high - I'll wait for a collapse. When the idiots line up and the price is through the roof you know they are buying high!

Not just gold, silver too. I think my last silver purchase was just under $17 an ounce, though gold has done much better. While I have some precious metals, gold and silver, the volume is in brass, lead and copper they're not a big part of my strategy.


I'll keep riding this bubble up; maybe take some profits along the way if it's protracted, then wait for it to pop then pounce. Along the way, there will likely be a few false bottoms and recoveries, and I may take advantage of those drops, before we hit the real bottom. I'd be satisfied with 30% market value drop, it's tough to time any market, so some discount is better than no discount.

Now in 2008, the bottom was a 57% value drop in the S&P, but some individual stocks hit discounts of 90% (loss of market value). That's what I hope I'll see for a few assets on my list including stock markets, real estate and a sailboat.

 

[BABMusic]

Ford dropped 85% in stock price, and GM dropped 99% in 2008. Pretty wild times that was.

 

[rsm]

Ford dropped 85% in stock price, and GM dropped 99% in 2008. Pretty wild times that was.

That's what I'm talking about! I just hope it's a company on my list that takes a hit. Some companies didn't survive, some didn't recover. Just because it's a huge value drop doesn't make it a good investment. Though I'd expect Ford and GM to survive and recover, as they did.