When Only the Penthouse Will Do: 1200 N. Lake Shore Drive in the Gold Coast
This vintage 4-bedroom penthouse in Benjamin Marshall’s 1200 N. Lake Shore Drive in the Gold Coast has been on the market since March 2011.
In that time, it has been reduced $275,000.
Built in 1912 with 10 full floor apartments, the first two floors of the 12-story building were used for servants and the top floor for playrooms and extra maid rooms.
The original units had 5 servant rooms in each apartment- including a separate servants corridor.
Over the years, they were carved into smaller units.
The building is a condo and not a cooperative.
This penthouse unit was put together by combining 3 separate units into 4000 square feet.
The room with the east facing curved windows is the L’Orangerie in the original floorplan (all of which was in French.) To the right of the L’Orangerie was the Grand Salon which is now the living room.
There is central air and in-unit washer/dryer along with high ceilings.
There isn’t a picture of the kitchen or baths, so we don’t know what those look like.
The listing also says that parking is available just “5 steps away.”
There was also apparently a special assessment as the listing states: “Please note that seller paid $288,000 special assessment for complete exterior renovation.”
Janet Owen at Prudential Rubloff has the listing. You can see the pictures and a handy floorplan here.
Unit #1201 PH: 4 bedrooms, 5 baths, 4000 square feet
- I couldn’t find a prior sales price
- Originally listed in March 2011 for $3.175 million
- Reduced
- Currently listed at $2.9 million
- Assessments of $4225 a month (includes heat, doorman, cable)
- Taxes of $29,567
- Central Air
- Washer/Dryer in the unit
- Parking is “5 steps away” – but I don’t know if that means rental in the neighborhood or what
- Bedroom #1: 21×14
- Bedroom #2: 21×12
- Bedroom #3: 15×15
- Bedroom #4: 14×13
- Family room: 21×14
Comments such as, “it’s nice enough, but gosh, those assessments…for the price and monthly cost, why not get a SFH?” in 3…2…1
This is a really great unit. There aren’t many real penthouses available at any one time and I’d think that they’d be in real demand for people who can afford them. The price is in line with what you’d expect to pay for something like this, especially in this beautiful Benjamin Marshall building. The assessments are not out of whack when you consider the size of the place and age of the building. The taxes are fair, about 1% of the market value.
The place would be worth even more if it hadn’t been compromised over the years. Looks like someone back there decided to “clean wall” the place ruthlessly and make it bland and generic in appearance, and there are even a couple of dropped ceilings, which is sad. It will take a lot of money correct the bad “improvements” made here. Since the baths and kitchen aren’t shown, we can probably assume the worst.
This is gorgeous.
I’m sure it’s a beautiful place, it just isn’t being shown very well on the listing. But I doubt most people spending $3m are browsing on Redfin!
“it just isn’t being shown very well on the listing. But I doubt most people spending $3m are browsing on Redfin!”
How are those people reviewing properties? I’m sure they’ve got an agent who would be willing to look at things in advance for them and describe the property, but they still want to see photos I’d think. Is there a better set of photos or brochure somewhere not accessible to the hoi?
It is possible that some of the $3MM set would place a really high value on their time and would like to cut down on properties they see in person.
WHERE’S THE HD VIDEO?!?! How will this sell w/o video???
in deference to Sad at 440?I didn’t say the name. Will he show?
Forget HD viedeo’s. There are no bath and kitchen photos. I assume it is intentional given the place was staged for the photos and they are done tastefully.
An l’orangerie and a $288,000 special assessment? Sounds like a really practical place.
I didn’t look at the photos, but I hope whoever the buyer is remembers to immediately install a flat screen above the fireplace in the l’orangerie.
I wish these units hadn’t been carved up. I’ve been looking for an apartment with five servants’ rooms and a servants hallway for my domestic staff.
Laura,
I wouldn’t call this a “real” penthouse.
I feel like a penthouse has to have features that the rest of the building doesn’t have, whether it’s an extra floor or two, or a large outdoor space. This is a beautiful unit, but other than size (which you could easily duplicate lower down in the building if you bought 3 apartments and put them together), what sets this unit apart from the rest of the units in the building?
The staging is pathetic for the price of entry.
“Comments such as, “it’s nice enough, but gosh, those assessments…for the price and monthly cost, why not get a SFH?” in 3…2…1”
What??!!! No parking for 2.9 million dollars?!!
“The listing also says that parking is available just “5 steps away.””
Likely, they use the 1150 N LSD garage? which would require calling a valet who uses a car elevator to bring it up?
“The L’Orangerie”. Is that like “with au jus”?
I’m guessing most people seeing $3m places have their agent/assistant/wife stop by and take photos of what they actually want to see rather than relying on the listing ones. But it’s not like I’ll ever be one of them so what do I know!
I don’t think the unit is that pretty. Maybe I’m nitpicking, but I don’t like the floors. Some appear to be original, stained in a natural color, and some look like they’re new and cherry colored. Otherwise it just looks like a large, whitewashed apartment to me.
Anyone who buys this place is a complete sucker – this place is never going to sell. The reasons are:
1. Rich people realize that the “inmates are running the prison” in this country. We see the writing on the wall – taxes are going to skyrocket (real estate AND income taxes). We are more conscious than ever about monthly costs. (we are talking nearly 7000/month in real estate taxes and assessments – costs which are surely to go up).
2. Rich people realize that the mortgage interest deduction is going by the wayside. There is even less of a reason/incentive to buy such an expensive place.
3. There is way too much competition and much much much better places that can be bought for the money.
The person that can afford this and would buy this has to be some older person with a net worth of 10 million plus, who will pay cash and realize that they are going to die in the next 10-15 years (budgeting another 1.5 million for taxes/assessments). No normal thinking younger person would ever buy this place…….
here is it’s competition. 2 years ago, I was in negotiations to buy this place (below). Thank God we couldn’t make the deal work (I certainly dodged a financial bullet there) – but look at the difference.
http://www.redfin.com/IL/Chicago/999-N-Lake-Shore-Dr-60611/unit-9A/home/13058889
I would rather have a row house on one of the nearby side streets.
I can’t envision a world where I could come close to affording this condo. $288,000 special assessment? Is there enough old money in Chicago to support the sale of these types of condos? I just assume the type of person who would be moving into this condo would be from an “old money” type family, but I could be wrong.
I tend to agree with Clio and Jenny on this.
And I know I’ll be castigated for saying so, but parking “steps away” is not good enough if I’m paying over $4,000 a month in fees to live somewhere.
Clio,
The one at 999 you showed is the better place, IMO. The wood panelling, the outdoor space, the lower taxes and the building itself, which is my favorite on East LSD.
Agree with Clio that the place at 999 LSD is significantly preferable to the listing in the OP. Interesting that the 999 place raised its price by 200k earlier this year.
Also, if Clio keeps up the analysis shown in his first post, then truly we’ve fallen through the rabbithole. We’ll be in a world where HD believes we’ve hit bottom, and Clio believes that the high end of the market won’t hold up because of political changes.
Actually, I think the cc world is coming to a consensus- HD realizes that not everything is terrible, clio realizes that not everything is great…..
I truly believe (and I think HD does as well) that now is the time to buy if you are looking for something reasonably priced (0-500k) for the foreseeable future (at least 5 years). 500-1000k is a gray zone (depending on the type of place). Anything more expensive (over 1 million) is pretty risky unless you have a lot of money (there is no such thing as job security anymore).
What is a l’orangerie?
Friend recently reviewed the Cook County tax-delinquent property list, and noted magnitude of westside and southside properties that have tax liens and subject to sale. Magnitude of Chicago’s uncollected propety taxes, water bills, and other revenue-generating taxes, fees, and fines is not receiving much attention in media even though the budget shortfall finally is. Certainly property taxes will go up again to fund gap; it’s easiest solution for city administration.
I only wish our property tax was 1% of market value.
OT for Groove:
http://blog.redfin.com/blog/2011/07/paradise_found_redfin_for_android.html
anonny on July 29th, 2011 at 4:45 am
“Comments such as, “it’s nice enough, but gosh, those assessments…for the price and monthly cost, why not get a SFH?” in 3…2…1”
Because SFH’s don’t have services (doorman, etc…) and views. Many people prefer luxury condos over SFH, especially old money, those without kids and the elderly. I wouldn’t take this unit over a SFH since it seems pricey for what you get…the unit needs updated…kitchen is small and the layout is awkward (who really wants a bathroom right off the dining room?…think of the sounds) and no parking would kill it for me.
Fabulous place, Robin Leach would love it
Speaking of Robin Leach, anyone remember the 1980’s SNL parody of his show, which SNL called, “Lifestyles of the Relatives of the Rich and Famous”?
One featured Martin Short as the distant cousin of Katherine Hepburn, and he sold hot dogs at a hot dog cart in Central Park. Of course his voice and mannerisms were exactly Katherine Hepburn’s. He was a very good impersonator.
Link to the script of that episode here:
http://snltranscripts.jt.org/84/84alifestyles.phtml
I very highly value a private entrance. After sharing pleasantries all day at work, the last thing I want to do when I get home is to thank a doorman for opening a door for me or make small talk in an elevator.
“1. Rich people realize that the “inmates are running the prison” in this country. We see the writing on the wall – taxes are going to skyrocket (real estate AND income taxes). We are more conscious than ever about monthly costs. (we are talking nearly 7000/month in real estate taxes and assessments – costs which are surely to go up).
2. Rich people realize that the mortgage interest deduction is going by the wayside. There is even less of a reason/incentive to buy such an expensive place.
3. There is way too much competition and much much much better places that can be bought for the money. ”
1) Clio, people who are buying 3 million dollar homes don’t give a shit about 7k a month in ass/tax
2) Most people buying 3 million dollar properties don’t buy them with mortgages, and the benefit phases out after 1mm anyway
3) Probably, but what if someone wants a top floor well finished unit right on division & LSD?
also the floors in this place are beautiful if you look closely at them, check out the details around the edges
If your comment begins “I would rather have…”, just put it on your blog. No one cares that every single property ever featured on here is wrong for you.
“Clio, people who are buying 3 million dollar homes don’t give a shit about 7k a month in ass/tax”
uhhh – yes they do – rich people are more frugal than you think. They ABSOLUTELY 100% look at monthly costs. People’s views of the rich not giving a crap about money comes from a very select bunch of these “rich” people:
1. wives of rich men (who don’t understand anything about money and are worried about competing with other women) – their husbands don’t feel the same way.
2. people who inherit a lot of money
3. kids of rich people (see number 1)
Real people who made their money themselves are EXTREMELY cost conscious.
“wives of rich men” why not husband’s of rich women? ; )
husband’s >>> husbands
miumiu – women (especially rich women) have too much sense to let their husbands spend foolishly!!!! They keep their men on a tight leash (financial and social)!!!
“If your comment begins “I would rather have…”, just put it on your blog. No one cares that every single property ever featured on here is wrong for you.”
I thought that was the point of THIS blog? To give your opinion of the featured property…in between everyone’s self-stimulation of course. 😀
so basically if you’re buying to live in it with a nice DP go for it…
“I truly believe (and I think HD does as well) that now is the time to buy if you are looking for something reasonably priced (0-500k) for the foreseeable future (at least 5 years). 500-1000k is a gray zone (depending on the type of place). Anything more expensive (over 1 million) is pretty risky unless you have a lot of money (there is no such thing as job security anymore).”
clio, buying a 3mm place means you have F-U money (unless they are complete idiots overextending themselves)… they don’t give a crap about 7k in assessments… AT ALL! That is literally peanuts to them. Now I know you aren’t at the FU money stage yet, so your opinion might be a bit different, but seriously maybe if you knew some “really” rich people you’d understand
Sabrina, thanks for the interesting snapshot of how the wealthy lived 100 years ago. Times certainly have changed.
Problems:
1. Anyone in the prospect universe for this unit knows what staging is, and will see the clumsy job a mile away.
2. “Steps away” parking means no building parking–unacceptable for this kind of buyer.
3. Monthly is very high
4. Not really a penthouse, and the kind of buyer looking for a real penthouse won’t go for this one.
5. 10 other Lake Shore Drive and East Lake Shore Drive pre-war buildings that are nicer/more prestigious
“miumiu – women (especially rich women) have too much sense to let their husbands spend foolishly!!!! ”
A couple years ago I worked a turnaround situation where the 2nd generation CEO (son of the business owner/wealth creator) was fired from the board by his sisters, and professional managemnt brought in to protect the trust assets. Why is it always the male kids of the wealth creator who are the foolish ones?
“Now I know you aren’t at the FU money stage yet, so your opinion might be a bit different, but seriously maybe if you knew some “really” rich people you’d understand”
Sonies, F-U money is different for everyone. When I think of my rich friends, they have net worths of 10-40 million. Each and every single one of them is very careful with their money. All of them could afford to pay cash for this unit – but none of them would ever do so. Maybe F-U money is 50 million and up (I have to admit that I don’t personally know anyone with that type of money) – but I DO know that my previous neighbors (sam and dorothy dean – who were worth well over 50 million) would NEVER EVER pay that type of money for this place.
“but seriously maybe if you knew some “really” rich people you’d understand”
Sonies – sorry but on this one I have to agree with Clio. Not all stereotypes will ring true but I am very close to a small handful of really wealthy people who do exhibit strange behaviors when it comes to spending money.
One example is a mom who makes her kids bring home the brown paper lunch bag from school each day so that they can be used for at least one week. Another is over 75 years old and will not pay to hire anyone even for simple things like to clean out his gutters. He is old and weak with poor vision but will climb that ladder to 40 or 50 feet to clean the leaves.
Both have several million dollars that are completely fluid but are still very cautious of how they spend those dollars. It is true that they may show excess in a few areas (great homes/exclusive vacations/a nice summer home/some designer clothes) but deep down they are very cautious individuals with money. Saving money and being cautious was learned early on and they have never forgotten the lesson.
By the way WTF did I read that correctly.
Was there really a $288,000.00 special assesment? Wow at that percentage of the cost of the unit it was sure to have grabbed a few unit owners by the short hairs.
Can you imagine that conversation:
“Thurston I was at the meeting tonight and they mentioned that we will need to contribute $300K for some repairs to the outside of the building.”
“No problem Lovie Ask them if they will they take cash or if they would prefer that I just brought down a briefcase of cash?”
Owners of properties like this are not necessarily old money, but in fact are often self-made millionaires, who started a business in the 50’s, 60’s, 70’s and rode the 30 year bull market for investments during that time period. Keep in mind that during the 1960-2000 time period (and arguably into 2008) no matter what investment you made a hefty profit in the long term. Sure there were some specific investments that went bad here and there, but most if not all asset classes rode the bull wave. So if this owner made his money in the 70’s and put it into real estate, stocks, bonds, oil, even CD’s at some point during that time period, they just rode the wave up and now are worth tons of money. I have relatives, in-laws and parents of close friends who also rode the generational bull wave and are now of the ‘millionaire next door’ type wealth. I even know a 60 yo solo divorce lawyer who is worth an estimated $3,000,000 or more, and that includes plenty of bad investments throughout that time period. How does a solo divorce lawyer become a millionaire? Ride the wave. If you can start out with $3,000,000 though the sale of a business or whatnot, ride the bullwave and it’s $10,000,000 or more as of today.
However, this no longer applies. Zero % interest has nearly destroyed the incentive for younger generations to save, falling real estate prices, stagnant wages and inflation in items such as food, oil and commodities, and a stock market comprised of computers trading at light speed with algorithms erode away any last vestige of hope for decent returns.
Being an attorney I’m often courted and cold called by investment advisers and stock pushers trying to sell me investments – “start now and earn 8% a year and watch your money grow!” they tell me. 8% a year? Are they joking? Where can i earn 8% a year that isn’t a step above junk bonds? those days are over.
I often crunch numbers myself; 20% down on a $400,000 home is $80,000, and at X per month, it’s X number of years; then my mortgage is still X$, and being conservative, counting on minor raises, if at all; then I need to save for retirement, or a new car, and somewhere in there pay of six figures in student loans for both myself and my wife….and it’s daunting, really daunting and scary for most people. Especially when those of my generation can’t count on that proverbial 8% return every year.
Oopps – In my analogy Mr. Thurston Howell III was actually supposed to be asking his wife Lovie if the association would take a check or a prefer the briefcase of cash. Sorry for the confusion!
Clio, I only hope you’re right.
Every post you make is an argument for increasing taxes on the wealthy well above their near historic low rates today.
“I often crunch numbers myself; 20% down on a $400,000 home is $80,000, and at X per month, it’s X number of years; then my mortgage is still X$, and being conservative, counting on minor raises, if at all; then I need to save for retirement, or a new car, and somewhere in there pay of six figures in student loans for both myself and my wife….and it’s daunting, really daunting and scary for most people. Especially when those of my generation can’t count on that proverbial 8% return every year.”
Sounds like the old HD is making a comeback.
“One example is a mom who makes her kids bring home the brown paper lunch bag from school each day so that they can be used for at least one week.”
How profligate! One year in school, I think I made two bags last all year. Might have been three.
No, this is the 3rd HD, morphing into architect style post, sort of in the rhetorical/anecdotal/pragmatic style of writing, followed at last with a personal story about the daunting nature of what’s going on right now.
And if I were an architect, after the market of the last four years, I’d too have such a dour outlook.
“Chris M on July 29th, 2011 at 10:16 am
“I often crunch numbers myself; 20% down on a $400,000 home is $80,000, and at X per month, it’s X number of years; then my mortgage is still X$, and being conservative, counting on minor raises, if at all; then I need to save for retirement, or a new car, and somewhere in there pay of six figures in student loans for both myself and my wife….and it’s daunting, really daunting and scary for most people. Especially when those of my generation can’t count on that proverbial 8% return every year.”
Sounds like the old HD is making a comeback.”
Hd – we’re currently in year 15 of a typically 18 year bull/bear cycle for stocks, the zirp will juice equities for decades to come
and have you ever heard of equities that pay dividends and increase their dividends each year? its an amazing investment vehicle…
HD – hang in there – we have been in a downturn for only three years – although this seems like eternity, it is only a small time in your life (and a nanosecond in terms of the markets). Things are absolutely going to get better – sure it may take another 5-10 years, but another boom will occur – just be sure to remember these hard times so you can cash out during the next boom. Cash is king and staying power (slow and steady) is the key.
HD,
That is a great analysis and I agree completely.
Many people in the Baby Boom generation and in the parents of the Baby Boom generation “rode the wave” and the wave is now over, but they don’t understand that, which is why you continue to hear about possible 8% returns. That is not going to happen. The U.S. economy from 1960-2000 was a different animal than the current economy, but these people grew up and lived in that economy, and have no understanding that it could ever be different. I won’t even try to explain why it’s different now, but one factor that doesn’t get discussed much is the rise in energy costs, which are now at their highest levels ever, inflation factored in, and may never come back down.
My wife and I are well off, probably in the top 5% as far as liquid assets, but those assets just aren’t growing in this economy. Keeping them in cash pays nothing, and the stock market is so mercurial there’s no chance we’ll ever make consistent gains. And don’t even mention real estate – you’d have to be nuts to invest serious money there. Our assets have been pretty much flat since 2008.
And, like others in our generation, we face huge college costs for our kids (not complaining – having kids was our choice), expensive healthcare, and possibly the burden of spending massive amounts to care for our aging parents. We may be “rich,” but we don’t feel particularly rich, though we’re thankful to be where we are. And we’re not going to be buying any place with a $4K monthly assessment!
“I thought that was the point of THIS blog? To give your opinion of the featured property…in between everyone’s self-stimulation of course. :D”
Sure, fine, this is about people’s opinions, but her comments in particular strike me as pretty worthless – every single comment on every single property is that this isn’t right for her because of one minor thing, so she would prefer to instead live in some other property blah blah why doesn’t the world share my exact preferences on everything they are my preferences I have a right to them yadda yadda. Boring and useless.
Dan #2 : You’re right. In Japan it’s been a 20 year bear market and it keeps getting worse. Over 1/3 of all workers, primarily younger people, are temporary or contract workers with no benefits and much lower pay; they’re also experiencing rising costs in energy and food; offset by lower real estate and electronic prices. Read the bloomberg story of a few years back about housewives in Tokyo were speculating, and disrupting, the currency markets because they were seeking out any sort of yield above the paltry zero that’s been in japan for nearly a generation now. So many say “we are not japan” but it sure feels like it, amazing how all the arguments why we are not japan (demographics, natural resources, culture, immigration, workforce, employment levels, etc) all seem to be completely irrelevant and insignificant to the way things are playing out, all the things the naysayers thought would keep us from becoming japan are have no effect to stop the slide.
Don’t read my comments JJJ if you have such a problem with them.
This unit has probably 60 feet of frontage on LSD. The north perimeter has no windows, the south side faces the plebs at 1150 N. LSD, so you probably would have to keep all the blinds shut, or the peeping toms at 1150 can view your lifestyle. The west side probably at least lets some natural light in. This place is similar to 6 N. Michigan in that it doesn’t really offer much of a view outside 1-2 rooms.
“The U.S. economy from 1960-2000 was a different animal than the current economy”
I think people forget that it wasn’t all puppy dogs and fluffy tails during the period 1960-2000. There were serious inflation problems dating all the way back to Nixon. Interest rates spiked under Reagan to well above 10%. There was economic shock from an early 1970’s oil embargo, an economic trough in the early 1980’s and again in the 90’s (see: Texas real estate, CA real estate pre bubble), etc.
It impresses me that many on this blog have figured out that there is no quick and magic formula. I agree completely with maintaining the steady course, dollar cost averaging in good and bad times, and not trying to time the market to the n-th degree (RE, equities, or otherwise).
Things are never as good or bad as they might appear, we can’t predict the future (or in large measure control macro events that dictate it). But we can control our approach and our actions/reactions to those events.
what about the deck? I’m sure there are nice views from there
Dan #2 – why not invest in real estate? If you bought a low maint. rental property right now (at the bottom), in 20 years you could make out pretty well. Let me explain:
2/2/2parking in Lakeview/lincoln park
Purchase price 400k w/100k down @ 5%
Taxes: 5500
assesments 550/month
Monthly payment: 2550 (of which 380 is going toward principal)
OK – rent right now for such a unit can bring u 2500 (or possibly a little less) – either way, you pretty much cover your costs and your renter is paying down your principal.
These are the ways you are going to make money on this:
1. As time goes by, your payment stays the same (relatively) while the percent of principal paydown increases – so that by 30 years, your principal is completely paid for by the rent (you just “made” 300k on this investment).
2. As time goes by, rental prices are likely to increase – so you actually may be able to pocket a few hundred a month/a couple of thousand per year
3. In thirty years, there is no way that the condo will still be worth 400k – even with dismal appreciation, the place will be worth at LEAST 600k (an extra 200k return on your investment).
All in all, you WILL come out ahead.
The problems:
1. Vacancy – this is why you choose a place that will always be desirable
2. Maint. costs – this is why you choose a good, newer building with low maint.costs (ie, no swimming pool, and no ridiculous extras)
3. taxes/assm increases – the increases in rent will more than cover these costs
you know what, I looked at the floor plan after the post, and it’s the west side that has zero windows! Bizarre. That’s would be a shame to have no western light coming in. The Master bedroom faces directly into 1150 N. LSD, so maybe a peeping tom would want the unit, so they could see into 1150’s units?
What deck? windy up there, cold too..
not only does this unit have a L’Orangerie (whatever that is), it has an “antechamber” (sounds cool), and an addtl. caterer’s kitchen.
“It’s the west side that has zero windows! Bizarre. ”
The west side of the building has windows, but the unit is not quite the full floor.
No, it definitely wasn’t all puppy dogs and fluffy tails and all it takes is a look at the rust belt and small town america to see the disruptions that occurred. Globalization during the 90’s compounded this effect and many former manufacturing and steel workers never had gainful employment at those wage levels again.
But, OTOH, housing prices went up, gold has gone up, commodities (other than the oil crash in the late 1990’s) went up significantly, stock market has been a bull, bonds have been great, investments as a whole in tech companies, financial companies and the other segments of teh FIRE economy went extraordinarily well and if you were one of the lucky ones who got involved in the ownership or management area of one of these businesses, you are sitting very well today. For example my uncle bought a home in silicon valley after a job transfer there in the 1970’s, got a job with a tech compnay; today his home is worth a $1,000,000; he has a well funded private pension, a hefty 401k, social security income, and my aunt still chooses to work for their son’s tech company in the east bay. His pension went up, his real estate went up, his saving accounts went up (from high interest rates in the 1970’s and 80’s), his pension went up, his 401k rode the stock market waves and by the time he retired he was well out of stocks and into far more conservative investments.
what can I count on today? my real estate purchase will stay flat, my income has been more or less stagnant and I’m one of the lucky ones, my industry (law) is overpopulated and now clients cannot afford to pay what they used to pay, my savings accounts earn barely enough to pay my increased electric bill due to excessive AC use this July; stocks are very mercurial like you said; and even investing in a new business venture is riskier than ever – give that business’s #1 complaint these days is ‘lack of customers’ and not access to capital, or rising costs, or hiring/keeping qualified employees, etc.
In the end, I don’t really care, but its difficult to ‘watch my money grow’ because quite frankly, it’s not. The only real investment that pays returns is an investment in myself, which costs little money but the cost is my time and energy.
“what can I count on today? my real estate purchase will stay flat, my income has been more or less stagnant”
This is the same thing people said in the 70s – seriously, you don’t know that your real estate is going to be flat – it WILL go up. There has never been a period in the history of the country where real estate has stayed down for more than 10-15 years (and in the years where it has been relatively stagnant, inflation made rents during that time astronomical)
Also, if you find yourself getting very depressed about money – take a break and don’t look at your portfolio- don’t calculate your net worth – just go out and enjoy, and before you know it, things will get back on track.
“what can I count on today?”
deflation? that your stagnant situation will be met by equally stagnant prices for the goods that money buys?
That would be the scenario, if the Fed wasn’t creating money and giving it out to foreigners, foreign banks, TBTF banks, the military industrial complex, and other interest group with their hands out in DC. I guess one has to live in NYC or DC to get one’s hands on the newly printed money, it’s not flowing to the NW side or “main street” at all. All this new money destroys the benefits that deflation would normally bring (i.e. lower prices).
I’m not depressed about money, i see people in far worse situations that me every day; in fact my one of my law clerks is copying some documents as we speak for somebody in a much more dire sitution, which is why I have the time to post here now. i’m merely commenting opportunities are seemingly less available to ‘let your money work for you’ and given globalization, the only thing of value I have is my time, and even that is secured, in a sense, by my generation’s student loans.
HD – Well said on investments outlook.
CLio – you forgot to factor in the potential for damage to said propery
HD – Domo oragoto mr roboto or whatever that means in Japaneese.
HD – why don’t you talk to your boss and agree to take over your law clerk’s responsibility for, 80% of his salary. This way, you would be busy at work (no time to get depressed) and ALSO will have a much larger salary. Win -win (well…. for you).
The biggest upwave hasn’t even hit yet…. Patience!!!
“what can I count on today?”
I think the single toughest change in today’s environment is that you CANNOT count on lifetime employment. The fact that we are all temporary employees creates risk and uncertainty that our parents’ generation didn’t have.
Yeah Rick – because none of our parents ever got laid off!!!!
Good point about 1960-2000. There were some tough times. I remember the extremely high (20%) interest rates of the early 80s, which came with 10% unemployment and followed 10% inflation in the late 70s. I remember waiting in gas lines in 1979.
The difference then was we bounced back. The 1973-74 recession was followed quickly by good times in the mid-to-late 70s. The early 80’s recession ended and we had boom years in the mid and late 80s. The early 90s recession ended and we had the boom of the 90s. Unemployment went from around 8% in 1992 to less than 4% a few years later.
It doesn’t seem like that’s happening anymore. Take unemployment. During the 2000-01 recession it quickly rose from 4% to 7%. Then it dipped in the mid-2000s, but quickly soared back to 10% in 2008 and is still at 9% three years after the crash. Jobs have been replaced by automation or by cheap workers in China/India. Only the stock market is booming, and that’s no coincidence. The stocks that are soaring are multi-nationals that make their money overseas, where Asian economies are thriving. I guess the best way to make money is investments in dividend-yielding multi-nationals, or in foreign stock markets.
Clio, I agree that real estate has traditionally been a good investment, but demographics here don’t favor it now. The huge bulk of baby boomers will soon be selling their homes and buying smaller places (or going to nursing homes, or dying). The next generation is much smaller, so demand, as well as price growth, will be less. The baby boomers fueled the huge real estate gains of 1990-2008, but that is over.
@clio–I’m not saying that EVERYONE had lifetime employment. You can’t prove a point using anecdotes (otherwise I’ll show you how the world is flat). But I think it’s fair to say that employment certainty has decreased in the last generation.
Rick,
I’ll go along with that. I work at a large corporation so I see it firsthand.
The echo boomers will be back in 5-15 years to pump up the prices of real estate – don’t worry.
Everybody just blindly assumes that getting back to normal means RE appreciation. Normal is RE depreciation on structures, and below inflation returns on land 1.5%.
So you think you are going to create wealthy by levering up on a depreciating asset, huh. Good idea, no wonder so many millions of people have the same idea.
Baby boomers won’t be selling for another 10 or 15 years and by then deference maintenance on their homes will have turned them into suburban crapshacks with 2000’s era kitchens, 1990’s bathrooms and in dire need of new windows, roof, and mechanicals. Old people’s homes turn into outdate estate sales because they live on fixed incomes and don’t have the money to perform routine maintenance. This will be a large chunk of the boomer generation. I”ll be well into my forty’s by then, and the housing stock will be falling apartment, and add in teh mcmansions, frame tract homes of the 2000’s and the cinderblocks of the city needing demolition, we’re looking at a housing crisis in the near future.
Brad F. – if you are so smart (which I doubt you are since you have to listen to your friends about your spending habits) tell me how will I go wrong by renting out my condos?
Here is one example:
Condo 1: bought in 1998 for 448k – value went up to 650 – now about 575k
Rented out for 48k/year – 8k tax – 8 k assessments = 34k/year
Not a bad return for a 450k investment – also remember that the value of 575 is an additional 175k return over 13 years.
Even if there is no further appreciation, you KNOW rents will increase – my investment is absolutely safe – remember, people need a place to live – a piece of paper (company stock etc) is, in itself, worthless.
meant 125k over 13 years
HD,
The first wave of baby boomers is already downsizing. I see it in my parents’ generation, who are the oldest of the boomers. True, the youngest boomers are still 20 years away from retirement, but this could gain steam a lot sooner than 10 to 15 years from now.
Clio – please define “echo boomers” – is this children of the boomers? If so, I’m one of the first echo boomers, since my parents are the oldest of the baby boomers.
Dan #2 – that was my understanding – and I believe that the echo boom generation is larger than the baby boom generation. (actually it would make sense if each boomer couple had more than 2 kids).
Wealth is created by doing things that are valuable to society. And large wealth is created by “levering up” on this. For example a business or creative venture by one man, can create something that has value for thousands even millions of customers. Whereas some professions Dr. and Lawyer for example, are inherently limited in this regard, because the idea is to treat 1 patient or client at a time. Law partners who become wealthy off of originations and managing subordinates are really making money running a business venture as opposed to just being compensated for their own lawyering. Obviously there are exceptions.
But creating wealthy by specu-vesting on a 2/2? ANSWER THIS: Exactly what value does that contribute to society? Little to none. And the returns should and will be commensurate with that.
Moron – we are not talking about contributions to society – we are talking about wealth creation and if you think the only people getting wealthy are people that contribute to society, then “moron” is too kind a label for you. You seriously are stupid.
Good post, Brad F.
So I’m an echo boomer. I didn’t even know it. I still think my generation, whether it’s larger or smaller than my parents’ generation, is unlikely to have the same tremendous impact on the economy. For the most part, we’re too stretched financially. I know people my age (40, or almost) who are still paying off college.
Wow – Dan#2 – I didn’t know you were the spokesperson for the entire generation of echo boomers. Look beyond your little world – there are many in your generation who DON’T feel the same as you.
Gen X + Gen Y is larger than Baby boomers; but they’re also poorer, heavily indebted with student loans, and according to popular thinking, aren’t interested in working 70 hours a week for the partnership. they says that they want the money too (who doesn’t) but ultimately I think we all know that if we don’t work we won’t earn the good money, and well, most of us won’t end up with the good money.
i have a friend of a friend, he’s about 40ish, I see him every once in a while. He was recently promoted to partner in his chosen profession. Along the way he lost his wife, custody of his children, and a good chunk of his newly minted income. But he did get to keep the family home, being underwater, the wife was not interested in that and she chooses to rent somewhere else in the city instead.
Of course this is anecdotal, but, I would not trade my lot in life for his even though he may have an income 5x higher than mine. I enjoy my family.
“which I doubt you are since you have to listen to your friends about your spending habits”
Having polite considering for the feelings of others before flaunting expensive things is a lot different that being subject to spending peer pressure. But if you want to keep that car conversation going, you should go back to that (Market Conditions…) thread from Wednesday. You might not like what I said.
I know plenty of people in their late 30’s and early 40’s who have yet to make partners in their respected professions, and these are large law firms, accounting firms, etc. Some of these people have been with the same firm or partnership for 14 or 15 years, and well, some years come and they don’t make anyone partner that year, or just a few in total despite having offices in every major city in the country. Even then there is ‘income partner’ which has the word ‘partner’ but none of the benefits or obligations or revenue sharing. Why commit and devote your life to this nonsense? And these boomers say “this younger generation doesn’t know how to work!” yeah, work for you? And watch you screw me over after all the sacrifice?
Really, Clio? I thought I was the one and only. And I thought everyone was just like me.
But seriously, I shouldn’t universalize. I don’t know everyone. But I do read a lot, and feel I’m decently informed.
Dan #2 – what do you read? and do you ever stop to think that the “successes” of your generation are too busy working/making money to post on the internet or wherever/whatever it is you read?
Quite possibly you’re right. The fact that I have time to converse here (during work hours) may say something about me. I’m not a “mover” or “shaker,” and I admit it. There are movers and shakers in my generation.
I regularly read the NYT/WSJ/Newsweek/Atlantic and anything else interesting I find online.
“we are not talking about contributions to society – we are talking about wealth creation”
There are very few (legal) activities which have absolutely no value to society but still create wealth. I know that contributing to society is not the motive for wealth creation, but it is indeed a result – with exceptions of course. Doctors, lawyers, managers, entrepreneurs all contribute to society and they are all rewarded at least vaguely in proportion to the contribution. But some smuck with a not so novel idea to specu-vest on a 2/2 in a popular neighborhood? Little to no contribution = little to no reward. (With exceptions of course.) And the enormous recent run up in RE was a temporaneous EXCEPTION who’s time has come and has now GONE.
Dan #2 don’t be discourage. They are all like you. Surfing while “working.” As the baby boomers croak RE will continue to plummet. Those properties you are work-surfing now that are double your price range because you are not “moving & shaking” will become affordable to you so long as you just stay employed, which shouldn’t be to hard. Nothing wrong with treading water.
wait wait wait – lawyers contribute?!!! ARE U FUCKING KIDDING ME?!!! and how do the uneducated hip-hop rappers contribute? how does the cast on jersey shore (who are all millionaires) contribute?
OH – I get it – you mean negatively contribute!!!
Brad F and Dan – move to new york and get married – you will be much happier together in your own little fantasyland.
Even at my firm new partners are far and few between and sometimes they’re nothing more than laterals with a book of business from other firms. One partner told me that it has been a mistake to elevate so few, because it leads to higher turnover, less incentive for associates to generate business and a smaller pie to share. One promising associate had been here years and recently left for greener pastures and that was particularly bothersome because they truly believed that the next promotion would have been this person. and then they ask me ‘why is this happening’?
Associates want to have what you got. And you don’t. partners at goldman sachs sacrified everything in life, including wives, children, everything to work there, and they are adequately compensated with prestige, money, power and the like. nowadays at your average run of the mill midsized or even large law firm? who wants to sacrifice everything for ‘income partner’? who wants to look at the landscape of divorced or twice married middle aged men, getting fat, dying of stress and heart attacks, etc, how mnay of gen x and gen y want that? hell sometimes I wonder if my generation would be happier with $1800 a month in SSI income and an xbox 360 with netflix than work 12 hours a day for the man .
I agree with HD..
My boss just missed seeing her grandma before she died because she was “needed” at the office. I would have quit had I been in her place. My job has recently become very stressful and I plan on leaving as soon as I can find something else (which might be awhile).
I have no desire to miss the important things in life to “make partner” or get into executive management. I want my simple life with lots of free time.
The most awful part is that even if you sacrifice seeing a loved one before they die, you still don’t get promoted. If they think you are doing a great job in your current job, they are less likely to promote you. I made the mistake of doing a great job and now the director of my department told HR that I am not allowed to transfer departments because they can’t lose me, so I am left to look for a new job.
The only way to win the game of life is not to play at all.
HD – you are talking and posting to a very select audience. Don’t let their support fool you – there are thousands and thousands and thousands of people in your age group busting their ass working and clawing their way to the top. Why don’t you hear from or about them? because they are too busy working!!!
“Only the stock market is booming, and that’s no coincidence. The stocks that are soaring are multi-nationals that make their money overseas, where Asian economies are thriving.”
It’s over. The Asian stock indicies have already rolled over (Brazil too), and they didn’t ever get back to their 2007 highs. The double top is in, and the bear market decline will resume. Only Mexico and South Korea have exceeded their 2007 highs, and they are treading sideways…..likely to begin a decline. The US, DAX other Western indexes likewise have not hit their 2007 peaks, despite QE, and they are now topped out and will begin to follow the emerging market indices downward having created the double top. This is all from Louise Yamada.
“(boomers) they live on fixed incomes and don’t have the money to perform routine maintenance.”
From Gerald Celente: he was laughing about the stock market propagandists who recently told us a few years back during the bubble, that boomers had “$14 trillion in wealth that was going to be passed on to heirs”. Gee, where did all of that go? did it really ever exist?
“Gen X + Gen Y is larger than Baby boomers; but they’re also poorer, heavily indebted with student loans, and according to popular thinking, aren’t interested in working 70 hours a week for the partnership”
throw in also the demographic changes in X & Y as compared to the boomers, the lower educational attainment and literacy rates, and there’s another reason they won’t attain the boomer level.
“My boss just missed seeing her grandma before she died because she was “needed” at the office.”
Please. She’s either a liar or a martyr.
“wait wait wait – lawyers contribute?!!! ARE U FUCKING KIDDING ME?!!! and how do the uneducated hip-hop rappers contribute? how does the cast on jersey shore (who are all millionaires) contribute”
To answer your sort-of-questions:
1. zealous advocacy and dispute resolution (litigation or not)
2. entertainment
3. entertainment
Duh? You couldn’t figure this out.
Brad – I understand this – but your definition of “contribution to society” then, is laughable at best. You could say that my 2/2/2 contributes by providing someone shelter/housing. You are now two rungs below a moron.
Jenny,
I’m not sure how old you are, but I think a lot of echo boomers think like you. I only know a small sample of people (as Clio so politely reminded me earlier), but of this small circle of friends and family I know in the echo generation, I see life philosophies such as yours predominate.
Well Clio, Jenny seems to know what she wants very clearly. Nothing wring with liking a low stress life. I personally like deadlines and am competitive but can see why others would choose differently. As long as she knows what she wants and she is not rash in her decisions, I bet she’ll do fine. Perhaps better than us in the long run.
“Nothing wring with liking a low stress life’
miumiu – are you insane?!!! of course everybody would LOVE a “low stress life”. Everybody would love to just quit their jobs at a moments notice, etc. – but why don’t they? because they understand that ….THEY…..CANNOT…..LIVE… without a job/work. Honestly, you guys are so completely retarded (yeah, I don’t care, Madeline) – you cannot understand this simple concept? WTF is wrong with you?
A low stress life is OK – only if you completely understand the financial ramifications. Most people are ok with this for a few years – but I guarantee that by the time they are in their mid 40s (not looking so good, a little fatter, a little slower, and now with kids) they are going to absolutely regret not establishing themselves better (financially and professionally).
Seriously, ask anyone in their 40s/50s who chose this life – they will all say they regret it. Money trumps all – even those who refuse to acknowledge this.
Clio,
Let’s not have name calling, please. I don’t understand your desire to lash out at everyone on this board. If you disagree with a post, I have no problem with you explaining why. But if you engage in grade-school bullying, I’m not sure why you’re allowed to continue posting.
“but I guarantee that by the time they are in their mid 40s (not looking so good, a little fatter, a little slower, and now with kids) they are going to absolutely regret not establishing themselves better (financially and professionally).”
Ha ha, that’s 100% right. We’ll see how happy they are riding a bicycle up and down Milwaukee Ave. at that point.
My boss just missed seeing her grandma before she died because she was “needed” at the office….The most awful part is that even if you sacrifice seeing a loved one before they die, you still don’t get promoted.
—
I’m in a leadership position and if one of my employees missed a life and death close family event to be at the office, I sure as hell would not promote that cretin. Sounds like a very short-sighted decision too. Not the sort of people real leaders would want to work with anyway. Plus such a person would be a drag on office morale, which might cause more valuable people to consider leaving. Btw, I read some anecdote the other day that the leader of Goldman made it all the wya to the top having missed a single soccer game or piano recital for any of his kids.
Jenny if it is not right for you bail. No point in wasting time and holding yourself back. Clio is preaching some cave-man philosophy.
I’ve had my job for 6 years. I’m not a serial quitter. I have a graduate degree. I don’t have a desire to work long hours or miss important non-work things in my life. I purposely picked my current job because it was low key. My job is changing since everyone around here views me as reliable and a hard worker (even though inside I am not).
As much as I would love to quit without having a new job lined up, I will not… (unless they treat me as shabbily as they treated my boss recently…which is possible)
“2/2/2 contributes by providing someone shelter/housing.”
Uhmmm, assuming the shelter/housing was already there before you specu-vested, then no you did not provide anything.
Brad, I agree with you. It has lowered morale because my boss told everyone how they put a huge deal of pressure on her not to leave in the middle of the launch of our new site (even after the doctors warned her grandma had days to live). This is one of the many reasons why people are starting to bale here left and right. I would love to work for a company like yours. My company used to be like that, but with a few terrible hires, they destroyed morale in one fell swoop.
same can be said of entertainers – brad f – you can’t argue with me – you don’t have an original thought in your head – go back to your friends and get their opinions and then come back.
Clio, I agree with you. The unit at 999 E LSD you linked to is absolutely perfect. and it makes the featured unit look way overpriced compared.
“I would love to work for a company like yours.”
Uhhh – bad decision Jenny – anyone with an attitude like yours or Brads will be out of business in a few years/months. seriously, in order to succeed in business, education, or anything requires an incredible amount of dedication, hard work, responsibility, etc – traits neither you or brad f/dan2 seem to have. That is ok – but don’t expect much out of your professional life – don’t expect to ever be promoted, and don’t expect your superiors to truly like you. If you worked for me, you would be out in a nanosecond – it is the people like you that actually bring work morale down – your attitude is poisonous – most leaders know that – so don’t be surprised if you get a pink slip.
“same can be said of entertainers – brad f”
Uhmmm, no again.
Entertainers create content that did not even exist before.
Specu-vesting on a 2/2, did not create that 2/2.
“in order to succeed in business, education, or anything requires an incredible amount of dedication”
It also generally requires the ability to function as a member of society / to “play well with others” so to speak. Jenny sounds pretty level headed and has nothing to worry about. In the meantime she should keep surfing, haha.
Wait a minute – all kidding aside – I just went outside and jumped in my pool and it is SO FRICKIN BEAUTIFUL out right now. In all seriousness, Jenny, Brad F., and Dan#2 (and everyone else)- you should request to leave work early today – there are not too many days like this in Chicago – and it being friday makes it even better. You actually CAN work hard AND play hard. You just have to be smart.
There is no incentive to working hard at my office. Maybe it’s different elsewhere. This is my first “real” job out of grad school. I see the least competent people getting promoted because my office won’t ever fire anyone for incompetence, so to get someone out of the department, they have to be promoted out.
The new director literally cannot remember things we tell her from one moment to the next. If she wasn’t so mean, I would feel sorry for her because she is having terrible memory problems. She asked me to work 7 days a week recently (without a day off ever). She became angry when I told her that it was not possible. My boss told me to just ignore her and she’ll forget.
clio, it is very inappropriate to insult people calling them names after every post, and it really degrades the points you are attempting to make, at the same time making you sound like a teen age child. So stop it
sonies – pot meet kettle
I wish Clio… Evil Director already through a fit yesterday because so many people were taking off today (including her).
Jenny – well then don’t work one minute past your allotted time – seriously, I know I sound schizophrenic – but part of being successful is seeing an opportunity and jumping on it. You don’t have to quit your job – but you DO have to live your life. Get your running shows on and plan something fun for this evening – it truly is absolutely beautiful outside right now.
“The new director literally cannot remember things we tell her from one moment to the next. If she wasn’t so mean, I would feel sorry for her because she is having terrible memory problems. She asked me to work 7 days a week recently (without a day off ever). She became angry when I told her that it was not possible. My boss told me to just ignore her and she’ll forget.”
Funny. Sounds like an episode of the office. Yeah, the first entry into corporate life is a real eye opener to the rampant incompetence. These are the same people levering up on 2/2’s and SFH’s thinking that they were creating wealth in the process.
Clio’s insults, etc., don’t bother me in the slightest. I hope they don’t bother others either. We all know there are childish adults out there.
“There is no incentive to working hard at my office.”
That’s a whole different issue from your not wanting to work hard.
Jenny, are you willing to say (roughly) what you do? Maybe being an admin would be good for you. I know there are admins that work a lot of hours, but there are also companies where admins work pretty strict 9 to 5. And the better ones (not nec working more hours) make pretty decent pay. Or maybe teacher, you’d have your summers off.
Re: insults – they are mainly meant for entertainment. Please don’t take them seriously. There are two sides to every argument/story and I completely understand jenny/bradf/dan2 (although it doesn’t mean I have to agree)
I work in web marketing.
“I work in web marketing.”
That doesn’t sound relaxing. I’m serious about the admin thing if you’re being truthful about your preferences. There are people who would value a highly educated (and hopefully competent) admin. Or maybe work for the city/county as someone suggested, although I suspect that’s going to be less lucrative going forward.
Magnificent property.
Agree with Laura…to a point. This is a penthouse. Top floor, huge space (combined units or not) views, details. However it has not been clean walled whatsoever. Look closely at each picture and you will see many small details are still in place. I don’t see any…well very few items that would need to be improved upon.
The main thing that does bother me is that the second kitchen has been left in place. The only entry is into the common hall. Great idea to have utilized this space for a wet bar. Even a caterer’s kitchen must have an entrance into the unit.
“The staging is pathetic for the price of entry.”
Having been in hundreds of these types of places (UES) I can say this is the manner in which many moneyed types do decorate. Quite a few high, high dollar pieces. While not really seemingly well put together, with a few lower dollar accessories it could be well staged.
“clio, it is very inappropriate to insult people calling them names after every post, and it really degrades the points you are attempting to make, at the same time making you sound like a teen age child. So stop it”
Didn’t I call for a boycott last weekend over this exact same thing? I agree his comments turn worthless when he falls back to that same old “you’re a moron, idiot, stupid, etc.”
If you want your points to be taken seriously (as you do have some valid points to be made) you really have to learn to address people in a more respectful manner.
westie – what do you think of the unit I was going to buy?
http://www.redfin.com/IL/Chicago/999-N-Lake-Shore-Dr-60611/unit-9A/home/13058889
From City Journal on-line magazine excerpt:
“Years of fattening retirement privileges while blithely ignoring affordability have left some cities’ pension systems teetering on bankruptcy. The Chicago Tribune reported last November that Chicago’s public-pension funds were “racing toward insolvency,” with unfunded liabilities estimated by Joshua Rauh of Northwestern University and Robert Novy-Marx of the University of Rochester at $44 billion—nearly eight times annual city revenues. Late last year, Illinois passed a law requiring municipalities to move toward properly funding their pension systems—which in Chicago’s case, city officials estimate, would require doubling its property taxes within the next five years. (“From today on, you won’t be able to sell your house,” outgoing mayor Richard Daley told Chicagoans.) The burden is so heavy that Rauh and Novy-Marx believe that a state bailout of Chicago is likelier than gigantic local tax hikes.”
Let’s chew on that.
I would consider admin work, but it’s not always as low stress as it sounds on paper.
“they are mainly meant for entertainment. Please don’t take my insults seriously…I was going to buy this and this…and I already own this and this and this”
So we are supposed to not take your insults seriously but consider seriously the other stuff you have to say. Interesting way to communicate.
That 999 N LSD place looks nice for someone who likes that elderly man living in the past look. Also the ceilings look low and cramped. Could be just the pictures I suppose. But I’d want to verify the 10ft claim.
“Didn’t I call for a boycott last weekend over this exact same thing? I agree his comments turn worthless when he falls back to that same old “you’re a moron, idiot, stupid, etc.”
Please Clio take WL’s advice, you will never turn someone’s opinion when you call them a moron. This is the one thing that irritates me regarding your posts.
Thanks and have a great weekend!
OK ok – I will try to stop….. but I still can’t believe what has happened to the world. There was a time not long ago where you could say what you thought, do what you felt like without getting into any trouble. Now, you have to watch everything you say and do otherwise you will get in trouble – it is idiotic (oh, I mean, it is “a bit disappointing”)
“I would consider admin work, but it’s not always as low stress as it sounds on paper.”
There’s a range. There’s low stress with regular hours, but it’ll pay badly. There’s medium or high but contained stress with regular hours (won’t be expected to work late or weekends hardly ever), which will pay decently. And there’s high stress with high hours (working for a CEO or something), which will pay well but not waht you want. I’m suggesting the middle option. Don’t know if you’re trying to avoid stress entirely, or preserve your personal time.
“looks nice for someone who likes that elderly man living in the past look.”
clio keeps on bringing up the casino (will they let you in clio?), so I think that’s kinda his speed.
clio there is a difference between saying something such as an opinion is idiotic and calling someone an idiot
hopefully your expensive education taught you that
One more thing – everyone should realize that when people are not allowed to express their opinions/raw emotions (and we all have them), they get bottled up and tend to come out in some other, nonproductive way (ie serial killing, murder, extra marital affairs, double life, drinking, drugs, abuse of something). I am not kidding – it is a well researched topic. Look at middle eastern and far eastern cultures. Bad behavior is not tolerated there – but the underbelly and rate of psychosis and terrible terrible under-the-table behavior is absolutely shocking.
The same thing can be said of racism/sexism at the office. Do you think these feelings don’t exist anymore? OF course they do – men just are more careful not to let women know the things they say (and boy, are they bad!!!).
Anyway, as long as you guys realize the consequences of censorship and big brother, I am happy to abide. You are all very lovely, smart, soon-to-be rich, wonderful, moral people who know better than everyone!!!
I like Clio’s remarks even if they can be interpreted as insulting. It makes this message board fun.
jenny – wow, you ARE smart and can read between the lines.
Clio – Don’t let it bottle up. There is no way you will get away with the mass killing when you pull away in the Lambo with those vanity plates. What do they spell again? We will figure it out in an instant.
Seriously though you need to call your personal doctor and schedule a check-up. Tell him that things seem a bit off for you mentally over this last month. You are very moody, insecure, and highly insensitive. We all know that you like to push the envelope with RE advice and somewhat out of the norm views but we all know that you can choose to express yourself better than that.
“I only wish our property tax was 1% of market value.”
This. Why are these high end properties taxed at such low rates? I know jacking up taxes on these places wouldn’t make a big dent in the city’s debts — but when everyone else is getting gouged, it doesn’t seem like the high rollers are paying their fair share.
“clio there is a difference between saying something such as an opinion is idiotic and calling someone an idiot”
Sonies – absolutely correct.
CLIO: stick to reading charts and leave the psychoanalysis to the professionals.
“clio on July 29th, 2011 at 2:09 pm
One more thing – everyone should realize that when people are not allowed to express their opinions/raw emotions (and we all have them), they get bottled up and tend to come out in some other, nonproductive way (ie serial killing, murder, extra marital affairs, double life, drinking, drugs, abuse of something). “
Thank you everyone for such wonderful advice. I will try to internalize your helpful comments and try to post more productive and informative statements. Your examples on this site are very helpful. I truly appreciate it.
Also Clio I used to use the word retard but only for myself unlike you, say I would make a mistake and then say “oh that was retarded” or something to that effect. I have this super nice colleague who invited me to her place to teach me a dish she had brought to work and I liked. Her eldest has down syndrome. Guess how I felt after remembering how many times I had used the phrase in front of her and that was it for me.
Also pertaining to your comment, I don’t want a low stress life hence chose my job. I like deadlines and competing. In fact, I miss taking exams quite a bit so you are wrong to think every one likes low stress jobs.
when someone says, “you moron” or “stop acting like an idiot”, these are idiomatic expressions in American English, everyday parlance. What kind of moronic idiot would take it so literally???
well that was the first real entertaining thread in days!!
Brad F… Just curious, is real estate ever good? Are you now the anti-clio?
And Clio… Hobbies!!! If people lived more balanced lives they wouldnt be at all confused with what to do with themselves. Who says work is what you have to do to keep busy? Really what’s wrong with scheduling in a 2-4pm kite surfing meeting? I couldn’t imagine ever having enough time to do all the nothing i want to do.
oops.. Going to have to move that meeting back an hour. Secretary just informed me I have a nap scheduled from 2-2:45.
See, one might even need a secretary to keep track of so much nothing.
“Brad F… Just curious, is real estate ever good? Are you now the anti-clio?”
I read that it was good back in the 80’s after a bunch of financial institutions were allowed to fail. Interest rates were high, so people with cash got great deals. It was apparently a good time to be a specu-vestor. This was before everyone jumped on the same bandwagon of course. Some even got RE for free just by bidding the amount of the rental checks included with auctioned off packages. It will be good again after a 15-25 year decline depending on how long the politicians choose to continue to prop up this RE market. Right now is truly a great time to sell, because so many people still believe the myth and the government continues to artificially hold it up. So if you sell now, it’s like getting free government money right into your pocket. (provided you’re not underwater of course). Just wait till RE taxes double, interest rates rise back to normal or higher, boomers start selling off and dying off, and a couple decades of datedness and physical depreciation pile up. Now think of all that without any artificial interference, a free market, that is all lending is private capital. Canceling the mortgage interest deduction, though minor, would just be icing on the cake. Image how rosy today’s market will look by comparison. It wouldn’t offend me at all, indeed it would be an honor to be called the anti-Clio.
The real estate market is so awful -the truth is that I wish i was renting. As soon as I sell all my properties I am never going to buy another one! You guys are very smart to keep renting. Real estate is going to be very bad for a long time. Why take the chance?
That last post sounds sarcastic – but I am being serious. Real estate is a weapon – a very dangerous thing- don’t mess with it bc u r likely to get hurt. Look no further than me – I have several million dollars invested in real estate and can’t even afford to go on vacation since that money is all tied up and inaccessible. I would give anything just to go back six years – I would have bought a reasonably priced house (500k) and a reasonably priced in town (200k) and saved the rest of my money!!!!!!
clio,
Not sure if you are serious, sarcastic or have turned into a Bizzaro HD type. But if you are being honest, hang in there buddy. I don’t think you are over leveraged, so you will be fine. I have a friend who was developing a highrise, project which didn’t go ahead and he lost everything, I mean everything. Don’t worry about that vacation, you have your own resort, enjoy your house!
“I have a friend who was developing a highrise, project which didn’t go ahead and he lost everything, I mean everything.”
Happened to more than one developer more than likely, unless you’re talking about the Vetro developer.
Sad really as I really dig the aesthetics of the building and thing he did a bang up job. Unfortunately architecture alone rarely determines how the plinko chips fall at the end of the day, as we’ve seen.
“Why take the chance?”
For those with income stability, geographic stability and substantial cash savings they’ll have the option to lock in lower housings costs over a very long period of time when owning becomes cheaper than renting. A buddy of mine is a realtor and it’s been so slow lately he’s trying to pitch me one bedrooms in nabes like Rogers Park for like 40k. Yeah that’s a deal to me but then I’d have to live in Rogers Park.
It’s certainly cheaper than renting for those that live in Rogers Park and can pay cash.
First HD went from uber-bear to semi-bullish and now clio went from ultra-bull to bearish. And this weather we’ve been having.
Is the entire world going insane or is it just me?
speaking of penthouses,
this has got to be the worst $5 mil listing in history.
Hey Dan#2, check out these pics!!
http://www.redfin.com/IL/Chicago/55-E-Erie-St-60611/unit-5302/home/12680674
special mention to the 2nd to last pic (portrait of the artist)
also apparently for rent for 16k/mo.
classic material.
the world bob, you are just fine, if you find yourself standing in a synogogue suddenly fluent in hebrew, well then you should begin to worry about youself.
“I have a friend who was developing a highrise, project which didn’t go ahead and he lost everything, I mean everything.”
Just out of curiosity how does someone loose absolutely everything on a project that doesn’t move forward?
“Just out of curiosity how does someone loose absolutely everything on a project that doesn’t move forward?”
A brief list of cost incurred.
Architect/Engineering Fees
Attorney Fees
Models/Renderings
Model Unit Build-out
Marketing
Property Acquisition
Building Permits
Site Prep/Construction Mobilization
Site Excavation
Partial Foundations
Contractor early bid/buy elevators/exterior wall/etc.
And the list goes on……….
“this has got to be the worst $5 mil listing in history.”
WTF?
BTW, if one is not crazy for views this is (was) a nice place at a decent price:
http://www.redfin.com/IL/Chicago/1235-S-Prairie-Ave-60605/unit-1605/home/18931145
Moomoo:
That building is one of a few downtown in the S Loop or Lakeshore east area that look really modern and don’t seem to be showing signs of distress (yet).
It’s like they’re luxury but not _too luxury_. I know 60 E Monroe is getting clobbered lately. 65 E Monroe too if the number of WSJ inserts is correlated at all with lack of sales.
1235 S Prairie one bedrooms a couple years ago were around 287k and today the cheapest is 285k.
Miu, does that mean you found your in town? Also, thank you for your comment on using “retard”. As a special education teacher, I can fully relate….
Ben, we want views hence still waiting.
yes, Bob we have seen units in both. I like legacy much better as 65 has windowless 2nd beds mostly which i cannot live with. they are both pretty empty.
“Only the stock market is booming, and that’s no coincidence. The stocks that are soaring are multi-nationals that make their money overseas, where Asian economies are thriving.”
The multi-nationals are NOT the stock markets of Brazil or China (which I agree with Marcus- have rolled over.) Growth is too strong in those economies. You’d have to be an inept company to not be making a ton of money right now in those countries (and most are not inept.) Many of the big multi-nationals will have their best year in their company history this year (even with the recent slowing in the US.)
The baby boomers should be on easy street having lived through both an 18 year stock market bull market (which saw stocks average 18% a year over that time) AND a housing boom which meant all they had to do was buy a house in 1975 and they would have been set for life.
I have no sympathy for those that mismanaged their finances.
Everything goes in cycles. Right now we are in a bust in housing and a bear in stocks. So all the lamenting about how “awful” it is and that Generation X and Y will never make money in any asset class is just wrong.
As Warren Buffett said in 2009 during the worst of the stock market crash: “I wish I could be 40 years old again right now.” Aka- there was SO much opportunity- and if you were younger, you could take advantage of it.
I’m sure those who came of age in 1969 thought life sucked too. If you bought stocks in 1966 you didn’t break even again until 1981. Interest rates were at 20% by that time. There were gas shortages and you had to wait in line to fill up. Many fought in Vietnam (or had friends/family fight there). Nixon resigned. Unemployment spiked for four or five years. The housing market sucked. Gold went ballistic- going to all time highs- before it crashed.
It’s all relative HD. But if you had been investing for the decade of the 1970s- you would have been fine.
To say “I’ll never make 8%” or whatever is just wrong. The 1970s were a bear market. The 2000-2010 was a bear market. We may still be in the bear stock market. But it won’t always be so.
I respectfully disagree with you Sabrina, I’m just saying we can’t expect what worked in the past to work the same in the future. We might be waiting a long time for the next bull market, and there is no guarantee that bull market is going to happen in the United States or even the US stock market. If you look at the stock market from 1928 until today, the most significant run up in stocks was the late 1980’s until the tech boom (which is the boomer bull wave we speak so fondly of); and since that point it’s been mercurial at best, flat out gambling at it’s worst. Unless you see a Dow 40,000 type situation, it’s going to be years of stagnation and slow decay with an occasional run up in the market now and again.
“To say “I’ll never make 8%” or whatever is just wrong. The 1970s were a bear market. The 2000-2010 was a bear market. We may still be in the bear stock market. But it won’t always be so.”
Corporate earnings were buttressed by a number of things:
1) technology (allowing overheads to be cut/productivity to increase)
2) population growth
3) accommodative monetary policy
4) offshoring (related to #1)
Population growth will always be there–it’s ~3% in a healthy economy.
How are companies growing earnings at more than this? The other 3. Thing is you can only cut your overheads so far. Heck you can cut them all down to zero theoretically, the marginal returns from going lower and lower provide less and less bang for the buck and compromise business processes.
Offshoring was a big thing and allowed companies in a vacuum to cut their overheads. Except companies don’t operate in a vacuum, and all taken together they have destroyed what was previously a large US middle class, there goes profitable demand from that segment–they shop at Aldi now.
Large MNCs can alleviate a bit of this loss of demand by expanding abroad, which is what they’ve been doing for the past 20 years or so in earnest. But the global population that is able to afford their products isn’t growing much, either. Sure Lagos shantytowns have a booming population but they aren’t buying Tide name brand detergent or Frosted Flakes at $5/box.
Monetary policy has allowed companies to do substantial business investment over the past decade or so, and they have done this. But now we’re at the point where a ZIRP is the equilibrium so any change will cause a detrimental effect on business performance/earnings.
Short of sizable real inflation I don’t see the business case for equities as growth stocks. If you’re buying for the dividends fine. Growth stocks are a thing of the past. And don’t give me any schpeels about how the Groupons are the next big thing–just wait until their VC runs out like all the other dot coms without sustainable business models or no key competitive advantage. Anybody can set up a discounting website, and they need not be large employers to do so or be successful at it. Hence the joblessness situation we’re in.
“If you look at the stock market from 1928 until today, the most significant run up in stocks was the late 1980’s until the tech boom (which is the boomer bull wave we speak so fondly of)”
You are actually quite wrong HD. The stock market goes in bull and bear cycles and has since 1880s.
Average return of the S&P 500 with dividends reinvested and adjusted for inflation.
1882-1897: 3.4%
1898-1902: 15.6%
1903-1921: 0.6% (bear market)
1922-1929: 25.4% (bull market)
1930-1949: 3.2% (bear market)
1950-1966: 14.1% (bull market)
1967-1982: 0.2% (bear market)
1983-1999: 15.7% (bull market)
2000-2003: -11.2% (tech bust)
I don’t have the 2003-2011 numbers but it’s probably up a few percent in that time.
You just THINK it’s “different this time.” It’s really not. You are investing in companies when you buy stocks. In 1925 it might have been the railroads. In 1945 it was GM. In 2011 it is Apple, LinkedIn, Groupon etc.
Some companies on the S&P 500 have been paying dividends to shareholders since the 1890s. So- over 120 years you could have been making money as they made money.
We’re in a bear market. The pessimism right now is the same as all the other bear markets. Question is- how are you going to align yourself to take advantage of the bull? (And yes, there ALWAYS is a bull.)
Your comments about stocks are also very, very bullish for stocks, in general. The more people hate them the closer it is to resuming the bull.
“Growth stocks are a thing of the past.”
ha!
How many states/countries is Lululemon in?
That’s all you need to know.
The world is a big, big place Bob. Plenty of growth just in China alone. McDonald’s is opening up hundreds of stores there. Ask Ze how much the middle class is growing in Brazil. They all want services and gadgets- like the iPad. Heck, the vast majority of people in China don’t even have toasters. Imagine when they do?
“But the global population that is able to afford their products isn’t growing much, either. Sure Lagos shantytowns have a booming population but they aren’t buying Tide name brand detergent or Frosted Flakes at $5/box.”
This is also very wrong. There’s one thing the US companies do have going for them- and that is powerful brands. Consumers in other countries want it the same as here. Have you ever been outside the country Bob? Just wondering…
By the way- Amazon.com’s stock return since its 1999 IPO?
12,400%.
what is pets.com’s stock return since it’s IPO?
Pulease.
Okay- so you’re saying that that person just picked “right.”
Then let’s say you waited to buy Amazon HD at the height of the financial crisis in March 2009.
Return: 267%
And you can pretty much say by 2009 that Amazon.com was NOT pets.com.
Oh- and I can give you example after example after example.
Chipotle was spun off from McDonalds in 2005.
Return since the 2005 IPO?
660%.
Why weren’t people buying Apple’s stock when the iPhone came out? Or the iPad? Or the next gadget?
It has $76 billion in cash and is selling millions of iPads. Anyone buying that stock? Why not???
There’s plenty of ways to make money during a bear market. Look at all the rehabbers in Chicago buying up foreclosures, fixing them up and making $100k, $200k per house.
Speaking of which, the cable shows will have flipping houses on again this fall (at least 2 different shows expected to start.) Only this time, they’re buying up the foreclosures to flip.
What does it mean for the housing market when the cable shows start showing this stuff again? Hm…
sabrina you are quite a wise stock investor, I tell people the same crap you are telling people for years and they still don’t “get it”
“majority of people in China don’t even have toasters. Imagine when they do?”
Most chinese don’t eat toast for breakfast if any of them at all.
I don’t understand much about investing in stocks hence I have a fidelity freedom thing, but the above discussion makes little sense. Sure if you know what stock to buy in hind sight, you’d make money. A lot of people have lost ton of money in stocks. You make it sound like a sure investment. At least houses (majority of them) don’t go to zero while stocks do. I am all for diversifying, having everything in stocks in a very risky business IMHO.
HD, if you want to ride the next big bull wave just buy GLD and SLV.
“3. There is way too much competition and much much much better places that can be bought for the money. ”
“5. 10 other Lake Shore Drive and East Lake Shore Drive pre-war buildings that are nicer/more prestigious”
Really? The portion of LSD that stretches from North of the River, to North Avenue, there are only 45 buildings, if I’m not mistaken. Let’s be nice and add to that couple of Lincoln Park ones. 90% of these are post-50/60, uber ugly buildings. So, think about it: There are only a dozen of these buildings available on this stretch anyway. So, the likelihood of a top floor unit in a vintage building like this, on this section of LSD becoming available at any given time, is very rare.
The rest is speculative.
Sabrina what was the return for picking the trifecta each year at the Kentucky Derby, Preakness & Belmont Stakes? Probably pretty high because hindsight is 20/20.
That’s why all the industry pitches diversification–it’s near impossible to pick winners consistently (ask Bill Miller how his career finally ended up–law of averages finally got to him, too).
So have diversified investors done exceptionally well on an inflation adjusted basis for any extended timeframe?
Considering most people’s working lives span 40 years or so how many 40-year periods have done exceptionally well vs. those that haven’t?
You can build wealth through equities and people do do it, but its not nearly as widespread as the financial industry makes it out to be. Even for those with sizable portfolios.
Also not arguing that rehabbers seem to be gaining the excess returns these days for their work. But word of caution to desk jockeys: rehabbing requires a lot more skilled labor/physical work and other risks than betting in the stock market. I don’t see the skillsets easily transferable.
Thats why I laugh my ass off at the lady at the WSJ who is documenting her rehab of a Brownstone in Harlem. She’s totally over her head, totally over budget, and can’t seem to figure out why everything didn’t go perfectly to plan. She really had no idea that her being a corporate drone who earned a high income did not make her proficient at rehab in the least. Maybe she’ll attempt to sail the Northwest Passage in retirement, too.
“HD, if you want to ride the next big bull wave just buy GLD and SLV.”
They’ve already had a good run. Unless you’re expecting currency collapse and the monetary base to skyrocket. It would be interesting to see how much they have increased in price relative to the monetary base.
And don’t forget what the government did to gold in 1933.
We are in unchartered territory-it has never been this bad in the history of the united states. Housing is NOT going to recover in our lifetimes. I actually agree with everyone on here – it truly will be cheaper to rent for several several decades (plus u get the flexibility and freedom to move whenever u want). Seriously for anyone thinking of buying – do NOT do it. You will be stuck like I am!!!!
“And don’t forget what the government did to gold in 1933.”
SGOL?
And what’s CLIO smoking?
“Unless you’re expecting currency collapse and the monetary base to skyrocket.”
Monetizing the debt? How else are we going to pay our bills?
I’d be a listenin to Bri on dis one… HD you are totally off. Nothin changes-nothin ever will.
I don’t walk into a supermarket without thinking how much I could make down here just manufacturing zip lock bags. 200 million people coming online here alone. India, China, Russia, Chile, Hell even Mexico has money flowin in… patience boys, these are the growing pains.
Saw in the supermarket for the first time a bottle of Liquid Smoke. $17US and I did not miss a decimal typing that. You think the world won’t take all the product you think your going to stop buying, and have prices drop… ROFLMAO!!!
The next up-cycle will be of an unprecedented size… enjoy!
miu.. no one ever says buy one stock, or one bond, or that you are guaranteed anything, you have to buy a lil bit of everything. But overall I like knowing all these people are out there wracking their brains at their public company, making me teeny tiny pieces of money. Truth is I couldn’t pick an individual stock if my life depended on it.
“We are in unchartered territory-it has never been this bad in the history of the united states. ”
It has been far worse, in terms of employment. Not in my lifetime and not since WW2, but it has been worse.
Employment has collapsed but people have other low cost things to occupy their time: you can surf the interweb, play xbox, steal movies online, etc. It’s not as bad being unemployed as it was in recessions past is my guess.
“You think the world won’t take all the product you think your going to stop buying, and have prices drop… ”
I do. You don’t see P&G selling crap in developing markets for $4 a cereal box. Those were prices tailored to bran conscious US consumers during the biggest expansion of credit in US history (1945-2007). They need to make up a LOT of volume at low margins to replace the disappearing high margin consumers in the first world.
“Have you ever been outside the country Bob? Just wondering…”
Regulars paying attention here know I spent some time working overseas. In a first world country whose property bubble was worse than ours.
I remember sitting in a fast food style kebab house and a banker/wealth manager having a conversation with a young immigrant employee, he was from the middle east and worked there.
The adviser was discussing property with him, either a purchase or a sale, I assumed purchase. Maybe he was one of those silent rich we hear about! But in reality why would someone doing menial fast food work be buying real estate in an expensive area like that (the whole damn island is expensive, and it wasn’t Bermuda). It was all smoke and mirrors and EZ credit. Now their economy is fvcked and their royal figurehead’s cars were attacked by a mob recently.
Do YOU understand geometric growth and how real 3+% returns above the rate of inflation are not possible over long periods of time? Even bacteria know not to eat themselves to death but in our current system it’s expansion at the heart of everything and that can’t go on forever.
It’s precisely the reason we had a financial crisis and are in the pickle we’re in: credit couldn’t be expanded at a rate above wages in perpetuity. It’s like water building up behind a damn.
(oh and this employee did not own the kebab house he was maybe mid-20s at the oldest, it was owned by an older fellow)
“You don’t see P&G selling crap in developing markets for $4 a cereal box. ”
Yep, a box of Frosted Flakes here… $7
Pint of Haagen Dazs $17
Can of gilette $13
Big Mac $9.75
China gave you money, you bought there stuff. China is diversifying like mad, I am seeing it everywhere. They are going cut the States lose once they can…
And it’s not straight exponential to infinity. Think sigmoid curve, and we are on the beginning of it, globally. You have no idea the demand growth developing. Absolutely no idea. What can not be sustained is Americas % piece of the received end goods. No way, No how!
Maybe look at it another way. I have a guy working for me down here. Hard working and nice as can possibly be. He makes barely anything, but it is much more than he ever made before, or anyone in the town makes. He now considers himself rich. He WORKS!!! WORKS HARD!!! He has a bicycle that his wife gets on the back of and his 4 yr old son gets on the handlebars. He wants a motorcycle, dreams of a car, a microwave is something they wouldn’t even dream about yet.
Now back in the ‘ol USA there are people collecting 20k a yr on unemployment in public housing with flat screen TV, microwaves, etc…
That guy is going to have to figure out -without working – how to keep his microwave from my guy, as my guy makes more money every year. Your guy still does nothin! Oh he is going to kick and scream for his free shit that he was entitled to ‘being born American’. Where is this money going to come from???????? Funds won’t flow your way forever if they can get a better return elsewhere, and they can.
That sense of entitlement is going to be the tough part. As I said many times. For those in the top 5-20%, never been a better time to play the game. Never! Never! Never!
“Yep, a box of Frosted Flakes here… $7
Pint of Haagen Dazs $17
Can of gilette $13
Big Mac $9.75”
Then western co’s are targeting only the moneyed elites there and not the masses. With such an unequal wealth distribution there I don’t see how they transition from high margin to high volume successfully.
“What can not be sustained is Americas % piece of the received end goods. No way, No how!”
Of course not. But to be honest that metric won’t impact lifestyle here one iota. Nobody wants to have extra TP/cereal/shaving cream around just to have it, other than hoarders I suppose.
I’m betting you’re getting ripped off or aren’t brand flexible if that’s the case. You’re either living at the Navy Pier of Brazil or won’t substitute Haagen Daaz with a local premium brand ice cream.
ze, you think fidelity freedom is a good option? i just don’t have the energy to do active investing and this one adjusts over times from a higher risk to a lower risk profile assuming US won’e default…lol
“That sense of entitlement is going to be the tough part. As I said many times. For those in the top 5-20%, never been a better time to play the game. Never! Never! Never!”
I’m not disagreeing with you on the sense of entitlement. Nor on the lazy Americans shouldn’t get shit. For those in the top 5-20% though they still do better in a rising tide, absolutely and without a doubt.
You really have to be careful now not to fuck up, and being born in the right era still helps too, as always (I’d be royally fucked if I was in my mid-20s or younger these days).
Yeah I’m saving $500/mo in cost of living due to deflationary pressures on my basket of goods and services. But that’s 6k/year at a price of in between gigs now the length of time is much longer, and nothing is guaranteed.
In a sense it was better when every bozo who bought RE was getting rich as they can’t live in all their stupid ponzi-financed properties so I could get relatively okay deals on rentals and have some sort of job security. Being a net saver my consumption was never a large part of preventing me from building wealth.
And I’ve escaped this great recession relatively unscathed compared to much of my peer group and almost all of those ones below me. Yeah I lost ~10k in the markets since Lehman but that’s chump change in the bigger picture.
The top 5-20% is extremely misleading as well. I think you should refer to the top 1-2% and then everyone else. The top 1-2% will do fine, in terms of both wealth as well as intelligence/drive. I’m not illusioned enough to think I’m up there. I’m more of a top-10% guy on intelligence and top-30% guy on drive. No family wealth to speak of so not top anything there. All in and I’m a top-5-10%er I suppose. And although not extremely difficult it’s tricky living these days.
I see many friends who don’t see the situation as granular as me go through periods of poverty at times. Obviously I manage my shit better to avoid that, but most people don’t. And life sucks for them in those ruts.
mm.. 3 words.. Vanguard Star Fund… simple, safe, LOW COST!!!!!, very very well diversified, excellent legal structure. Anyone says you can do better, including myself, just nod your head affirmatively like you’re listening and laugh at them on the inside. This is the only advice I give to friends, all that listen to me have done better than me, on equities, the past few years.
“I’m betting you’re getting ripped off or aren’t brand flexible if that’s the case. You’re either living at the Navy Pier of Brazil or won’t substitute Haagen Daaz with a local premium brand ice cream.”
Yes, *some* things are more expensive where I am than in rural areas, that is certain. But even when I go to my country place. Toll each way US$6.40. Each Way! Basic domestic ice cream is about $10 a qt. You will never see cheaper. And boy do they keep buying it. Also you have to realize how much income goes unreported here. My entire rehab was paid in income I can safely bet was unreported. Guys that work for me I pay piece on books, then piece in cash. Vet yesterday, paid him cash, huge excavation project i’m making-cash. As for my shopping habits. I almost wrote yesterday about a problem I have, that no amount of money can ever make go away. God forbid I walk into a supermarket and the 250ml is $3, when the 500ml is $5. If I need the small only there is a good chance I won’t be able to buy it, or walk around for 5 minutes, returning past that item again and again until I do.
Oh and I make my own ice cream. Got the vanilla beans sitting in the custard base as we speak. Raw milk and cream and fresh farm eggs. Yummy!!
You have to be careful with the numbers you are seeing.
I also love how a moneyed elite like Ze is now saying the top x-y% will do okay, knowing most people on this board consider themselves in that bracket.
What Ze the whole Horatio Alger tale wasn’t working any more after the moneyed elites of the game changed the rules in 2008 during the crisis to get their golden parachutes at the drop of a dime while the plane was going down?
You’re lucky you moved your person & money to SA where they accept their class and status in society much better than here in America. Here a large portion of society (let’s call them the middle management 401k matching set belief in markets crew) was working extra hours helping the moneyed elites get richer because they thought that they, too, would be multi-millionaires one day if they only stuck at it and things kept going as they were. They get a gold watch and a severance package at the end of it like everyone else. And a shit corporate stock price in most cases.
The rich here are going to pay, 1950s progressive taxation rates style, eventually. It might be deferred for awhile while the tea party fights the new taxes, but eventually even many of them will wake up to the fact they have been snookered.
Massive spending cuts need to be made and massive tax increases on the rich. You can talk about capital being global and for the really rich that might be true but it takes 10 years to escape from the tax liability of one’s citizenship and if you want to reside here it’s curtains.
Most rich aren’t as willing or able to pick up and move. Most that would even be able to likely would only fit into an anglo-ish country culturewise (like me) and there’s none of those our gov’t isn’t cozy with. In fact methinks there’s perhaps something in your past which provided the catalyst for your move.
I use to have vitriol against progressive taxation when I was among the Horatio Alger set. But the fall of 2008 opened my eyes to how the game is _really played_. They don’t teach this shit in classrooms other than a passing reference in econ classes to TBTF WTSHTF, which is clouded in geekspeak.
GZ:
Here’s a story about your hard working stiff with a wife and a four year old
http://www.azcentral.com/business/articles/2011/07/11/20110711brazil-credit-card-debt-lending-rates.html
We’ll see how long the boom lasts. we are all in a perpetual state of decay.
Too much money chasing too few goods results in higher prices like $10 a quart for ice cream, because your hard working employee is putting that ice cream on his credit card and defaulting a year or two later. Sound familiar?
I have a weird thing about top 1 percent may not be top 1 percent at everything. I also believe anyone reasonably well educated can get lucky or make it. I had a next door neighbor who was slooooow. He worked crazy hard, forced himself through school, became a dentist, built a practice with several dentists working for him, now plays with rebuilding cars 3 days a week. No rocket scientist here, strictly perseverance. Other people well sometimes luck. I underestimate no one. If I think you are top 20% I treat you like top .001%. Look my reading comp is top 1%, my grammar is horrendous, so what the hell does that make me?
“In fact methinks there’s perhaps something in your past which provided the catalyst for your move.”
Yes there was… I hated what I was doing, every single moment of it. The rest you answered in your first sentence of paragraph 3 and 4. Wife being Brasilian and Rio becoming safer just made it too easy. Everything else since.. just an happy accident.
And HD.. I’m probably the one guy here that didn’t even blink thinking your $35 call in oil was unreasonable, and I love oil. Long term.. like the video i showed you.. up and to the right… not even a doubt in my mind.. all the rest is noise.
“Too much money chasing too few goods results in higher prices like $10 a quart for ice cream, because your hard working employee is putting that ice cream on his credit card and defaulting a year or two later. Sound familiar?”
For starters, before this whole credit card thing seems to have caught attention recently, check the timestamps and I think i brought this up out of nowhere a few weeks prior.
2- middle class here is like $2k a yr. This guy ain’t buying ice cream either way. Milk prices doubled in last 2 years, even the Chinese are buying it and I didn’t think Asians could even drink the stuff, cheese? ice cream?
3-the reason it struck me as so crazy and led to my CC convo about it is when I saw the numbers I laughed thinking how can anyone NOT default. All that needs to be done to resolve this is lower rates and defaults will drop to near nothing when monthly rate goes from 13% to 1%. Obviously someone found a an optimal point on this and this is best for the banks. Then if someone like me points this out, they just point to the default rate and say they have no choice…Too much fun.
I love when people tell me again and again WHY what is happening shouldn’t be happening… but point being, there is always opportunity somewhere and today there are more somewheres.
I stared deep into the proverbial abyss, at 27. Worst 7 months of my life. I will never allow myself to forget them. Couldn’t afford both lunch and a subway home, had a new wife, and an apartment. And Bob, despite what you might think, there was no bank of Beth Shalom offering me shit!
So much has to do with luck, so very much, and not many people get to be lucky or are prepared for it. Problem being more the later.
“Oh and I make my own ice cream. Got the vanilla beans sitting in the custard base as we speak. Raw milk and cream and fresh farm eggs. Yummy!!”
Ze, let me know if you ever become muslim and can take a second wife 🙂
“Ze, let me know if you ever become muslim and can take a second wife ”
Oh sure, while we’re at it I might as well request you walk around the place in a school uniform (yes I know – diff country – but who cares). BB’s dogs life expectancy would be longer.
USA is fine and will be fine. You guys are ranting too much.
When I hear Fidelity and Vanguard brought up in a conversation as “good investment vehicles” I just have to shake my head
Sonies, what do you recommend?
ok sonies, i’ll bite.
Why is a low cost diversified portfolio bad advice, particularly for someone who expresses no knowledge of markets?
Should she borrow Bob’s new trendline book when he finishes? Btw bob, i was walking along the beach today, taking in all the visuals, enjoying the mid 80’s winter weather, and i thought to myself how funny that someone thinks this is a place you would need a sketchy reason to run away to. Things are just so beautiful and playful here.
“nd i thought to myself how funny that someone thinks this is a place you would need a sketchy reason to run away to. ”
ze, are you saying you have not Madoffed some folks? ; )
“and i thought to myself how funny that someone thinks this is a place you would need a sketchy reason to run away to.”
Most people are not flexible enough to move to a place of an entirely different culture, even if they had the means.
Rich manhattanites talk about enrolling their child in chinese classes but even they aren’t nearly as wordly as they tend to think they are (semester abroad and vacays to Europe don’t quite cut it). They’re worldly in their dining out restaurant selection and that’s most of it.
People with money are much like people without money in this regard, as with most everything else. In fact for self-made wealth, the majority of which are small business owners, its a complete personality mismatch to live most other places.
I was peeved living in an anglo-country in Europe that I had to modify my work schedule to accommodate mundane things like grocery shopping/haircuts/dry cleaning/etc. My parents were peeved when they came to visit about the wait times at restaurants and complained.
Do you really think most Americans could hack it down there without going nuts?
You’re the exception not the norm. Which is why your money is probably a lot safer than the rich folks here. The middle class here is going to start looking at their stash and wanting a piece of it.
I also fall into this category: I really couldn’t see myself living anywhere for an extended period of time that wasn’t first world. And there’s a reason companies have to grossly overpay their expatriates–even in areas where the COLA is quite low.
A great example of most Americans having no idea about how things work differently in different cultures/countries could be summed up by a story told to me early in my career about plant the MNC had in Mexico.
They were hemorrhaging losses at this plant because basic things like a steady uninterrupted power supply wasn’t available and people tended to take schedules as suggestions. The MNC wasn’t able to effectively compete either because they were prohibited from making bribes (as are all US firms), yet ‘facilitating payments’ were part of doing business down there to grease the wheels.
I’d imagine before the expansion at that location it was a bunch of white people (accountants & sr mgt) under fluorescent lights in air conditioned offices here in the US making a whole bunch of assumptions that business down there is/was the same as here. Afterall they’re smart big swingin’ US business executives, that qualifies them to be renaissance men and experts in all things…not quite.
They likely knew _nothing_ about Mexico but assumed it would be just like here but far lower labor costs.
Not the only boondoggle in latin America for this MNC either. Similar situation at a plant in your country. Can’t get more specific than that but let’s just say even putting a local with an anglo-personality in charge there can’t change the culture.
(and putting a non-local in charge is frequently even less effective at motivating the workers)
“ze, are you saying you have not Madoffed some folks? ; )”
I wish someone killed him. I always hate the 1 asshole that makes the other 99 look bad.
“Do you really think most Americans could hack it down there without going nuts?”
No! No one can exaggerate how unimportant schedules are to these people. Only in Sao Paulo do people actually work. All this place is, is really one giant *mostly renewable* commodity warehouse.
http://finance.yahoo.com/news/Culture-clash-complicates-apf-2773330639.html?x=0
“USA is fine and will be fine. You guys are ranting too much.”
The USA is the largest debtor nation in the history of the world. Right now, today.
“The USA is the largest debtor nation in the history of the world. Right now, today.”
Depends how you define debtor nation. The world has a long history and US dollars didn’t exist until only a few hundred years ago. Relative to the size of our economy there are others that are worse today, and others that likely have been much worse historically.
our assets are well over 10x our liabilities and well over 20x our liabilities if you factor in that our own federal government owns about half our treasury bonds
What about the fact that our debt is rapidly approaching 100% of our GDP? What about the shortfall in medicare, social security and the other entitlements? What about the fact that our deficit keeps growing and growing while our economy and the number of jobs out there are swirling around the toilet? What about the fact that we literally gave trillions of dollars to the banks in this country rather than have them go to consumers that would then have money to buy stuff again? How is that going to help us from here on out?
The fact is that our government is run by a bunch of crooks and our nation is facing a very serious threat to peace and stability due to the Depression we are presently facing. I have no confidence that Washington is going to do the right thing, not until we stop the corporations and big money interests from corrupting our political process . . . but the point I am making is that everything is not ok. We need to make wholesale changes in Washington, throw out all the bums from both sides (almost everybody) and get people in there that aren’t going to accept bribes from the financial interest in our country, because if they do we will vote them out.
“USA is fine and will be fine. You guys are ranting too much.”
and no other great nation ever in history of mankind has ever lost its glory… (sarcasm)
I think we are in serious financial trouble. I would absolutely definitely not be buying anything big (especially real estate) until at least the next election is over (2012) – even then, why waste all that money to buy (and take on all that extra responsibility) while you can rent for cheaper? It only made sense when you could sell for a huge profit – that no longer is the case (and no longer will be the case – ever). This place is going to cost you between 1400-1600/month after putting down 40k. Why not rent something much nicer for 2000/month – in 8 years, your cost will be the same – PLUS, you won’t be responsible for maint./special assm., you will have the freedom to move whenever/wherever you want, AND you won’t be left holding the bag when you DO want to move.
Wrong thread -sorry.