Coffee heat rising

We’re in the Money…

For the moment…

This morning the Dow was at 19,000! When it goes wacko like this, my fund will make 30 grand in a month. Woot!

Unfortunately, it’s likely as not to lose 32 grand the following month…but let’s not think about that.

Ha ha!! In amongst the stupid chatter to this YouTube video is One (count it: 1) truly inspired comment:

Sonic Ryan 1992
What it feels like to be a post-graduate who finally got a good paying job.

What I’d  like to do is tell my guy to SELL NOW! Convert about half our holdings to cash; then invest the remainder aggressively for another month or two (maybe six, at the outside), then shift that to the money market.

My son has dragged his feet on refinancing the downtown house. It frosts his cookies to have to pony up more cash to principal, and an extra layer of frosting is applied by the prospect of having to pay mortgage insurance (we don’t, on the current instrument). But I  believe the house’s value will soon rise enough to give us well over 20% equity (it’s probably that high now): the housing market is exploding, his neighborhood (as I prematurely predicted) is gentrifying, and as demand rises, so will prices.

So I’ve sicced a friend who’s a mortgage broker on him, hoping that this time around he’ll kick into gear and get that thing refinanced. The problem is, it has a 30/15 loan on it. In 2020 — just  four years, about the time I expect the Trump economy will tank — we’ll be forced to refinance or to sell. We took out that loan, which had exceptionally favorable terms at the time, because he planned to stay in Phoenix just long enough to get back on his feet after being laid off at the tail end of the Silicon Valley bust, save some money, and then go back to San Francisco. It hasn’t worked out that way. Inertia set in, and he seems to be happy enough to stay where he is.

For the time being.

At any rate, it’s hard to believe that in just four years, he will have been in that house for 15 years. Tempus fidgets, eh?

Not real thrilled, myself, about being over the barrel now to get that place refinanced. Rates are already rising, and they’re expected to head straight for the stratosphere. I expect by 2020, we’ll be lucky to get an 8% loan.

When I bought my first house here in the ‘hood, that’s exactly how I felt: very lucky to land an 8.25% loan. Everybody cooed about what a great deal it was. I only owed $80,000 on the house, and the payments were over half my take-home pay. Imagine the payment on a $180,000 loan at 8% or 9%? We are gonna see a WHOLE lot of people who simply can’t afford to buy real estate at all. Ever. And a lot who will go belly-up. Again.

Interesting times, hm?

How are you planning to deal with all this…interest?

5 thoughts on “We’re in the Money…”

  1. Aaaand Mr. Trump says ….”you’re welcome”….IMHO it’s a bit crazy and this is certainly “irrational exuberance”. The guy hasn’t even taken office yet! You MAY be wise …to take some money off the table. As for me….I would love to see interest rates take a jump. It would give folks a “sense of urgency”….as in your DS’s example….he’s thinking ….”holy crud….I better refi…rates are heading up”. And it would give some OP’s a little more income on their meager savings after years of 0% returns. Funny if we’re not careful… the “Trump Rally” could provide you with “tax consequences”…..

  2. Ha ha!!!! “Irrational exuberance” was exactly the term that popped into my overheated little head this morning. Must be great minds in the same path.

    And yeah: since the RMD is a percentage of what’s left in an IRA, not xx number of dollars per year, tax consequences are surely a possibility.

    But…WAIT! Trump tells us our taxes are going DOWN. Right?

  3. I would be THRILLED if interest rates go up to 8% – my mortgage is locked in and my car loan is 0% and I’d like some interest on my savings please!

    • Yeah, for those of us who are set in terms of housing and autos — and who have money in savings! — higher interest would be great. Wouldn’t it be nice, even, to be able to use a credit union’s money market account to earn a little on your emergency savings? It would allow you to justify building a larger, more stable emergency fund — mine is mostly in the market right now, because I don’t feel happy about keeping 10 or 20 grand in instruments that return nothing. I used to keep it at the CU, but when the return dropped to pennies, I ended up moving it over to Fidelity and Vanguard.

  4. This post did make me look at my Vanguard accounts (401(k) and variable annuity) to see how they’re doing. They had a healthy bump, but nothing extraordinary.

    I’ve looked at the articles about Trump’s “tax plan” and I would be paying more, not less. Bummer, but not unexpected. I expect my taxes to continue to rise as long as I am still employed and getting regular raises and bonuses.

    As for keeping money in a savings account, I make 1% interest on my Ally savings accounts. While that’s not as much as you can make in the market, it’s better than most. I wouldn’t want to risk my EF in an investment account.

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