I still have 50% in stocks, 10% in bonds, and 40% in real estate. Most of my bonds I hold until maturity so I do not care about price fluctuation. It is the same philosophy as you have with RE - price fluctuation is irrelevant.
I look at RE as a special kind of bond. I hold RE until maturity - maturity is when I die. In the meantime, I can enjoy the “coupon” being thrown off by the RE, which is rent. As well, most of that “coupon” is shielded from tax because of depreciation. Any “coupon” that is not shielded from tax gets a 20% passthrough tax deduction. As well, being classified as a RE professional yields an exemption from the 3.8% net investment income tax.
Once I die, my kids get the properties, the basis cost gets stepped up from a tax perspective (no depreciation recapture tax to be paid) and everyone sleeps happily.
True, there is no match to buy and holds either stock or RE. There is a difference, though.
Stocks we can sell it now and get it later.
Real estate, if someone fails to grab nice home, it is gone for years as it is rare to find likable home. When the home is good (in all respects), get it asap, with some premium.
I don’t buy bonds. I invest in first trust deeds. Like bonds paying about 8%. Less commitment than buying rentals and less risky than stocks. Plus good cash flow. 4 times the banks rates.
If he’s beyond 70, I assume he would have no income and would not be able to become a first time buyer
I have not heard of any 70 year old first time buyer. Maybe we will have it when the magical pill is invented.
Many old millennials forgot that they can expire in job market and their home buying years are limited.
High income millennials should buy a house 2 years after working. Because marriage is late and divorce rate is high, they should buy a house when they are single, that’ll become their advantage in employment and dating games.
If you have money, should help your kid to buy a house as soon as possible. Maybe you can take a minor ownership to prevent it from losing to their spouse
Totally agree with all of this. :-). The worst position to be in is to be an older millenial, used to a high income lifetsyle… then get married late and have kids right away (because the biological clock is ticking) … and then all of a sudden the huge dollar and time costs related to having kids hits one like a load of bricks all while they are getting closer and closer to expiration in the job market. I see this allllllllll the time.
The best position to be in is to get lucky and marry early, in your 20s, to someone that won’t divorce you and also has a good income and is a miser. That allows household consolidation, accelerated savings, joint learning and acclimation of a miserly lifestyle, house puchasing earlier, an easier time having kids, and ultimately stability later in life.
What? You want me to dig into all those old threads to figure out his networth? No thank you. I think I will go to a nice restaurant and enjoy a good lunch instead
Thought he is in the late 50s, so his last purchase at 44 surprised me.