Poet, here's one to debate that I've been thinking about.
Say, for example, what would it take to be better off in two years than now? I'm not talking about having more money in the bank. Think of it like this, comparable to a person that is similar to you NOW. Maybe in other words to the average person, who now has a mortgage, an SUV, money in the market, etc.
Say you sold out. No home, you sell now and rent for a few years. A pain in the ass maybe, but it depends on the payoff. Maybe you need a new car now because your Honda has 190K on it, and hell you deserve it. But it's running fine, so screw it, it's good for a few years. You can move all your money into low risk investments (ie, safe bonds) and shouldn't expect more than 7% per year depending on how you diversify. You can't live off the interest, but won't have to draw too much into the principle. Or you have a job -g- and don't need the money for a while anyway.
Now in 2 years, will you be better off than the average guy in your position now? I guess it depends on whether you believe we are in a bear market or not, and how the average guy will deal with it.
You know what I think. Say I have no job and draw $40K from my principle over the next two years (not saying I will, just for example). Then I buy back the equivalent home for $40K less and a car on the cheap. Aren't I at the same point? And won't the average guy be stuck with a home down in value and other toys that don't have a market value? So won't I end up moving up the totem pole even though I did nothing for 2 years?
Of course, if the market dictated, I'm ready to move. But at this point I'm scared as hell to do anything. I feel fortunate to catch the bear, and oh I'm sure there's plenty of easy money on the table still and the bear ain't near done. But I ain't no hero.
chic
BTW- I firmly believe the stock market is the economy and it can't be summed up better than by no one else but Jesse Livermore in 1923 for why we're seeing no reaction, yet:
As a rule a man adapts himself to conditions so quickly that he loses the perspective. He does not feel the difference much -- that is, he does not vividly remember how it felt not to be a millionaire. He only remembers that there were things he could not do that he can do now. It does not take a reasonable young and normal man very long to lose there habit of being poor. It requires a little longer to forget that he used to be rich. I suppose that is because money creates needs or encourages their multiplications. I mean that after a man makes money in the stock market he very quickly loses the habit of not spending. But after he loses his money it takes him a long time to lose the habit of spending. |
