Oh the joys of home ownership

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KenB259

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Had a 98 dollar air conditioner check this morning. The system is 17 years old. Opinion of the technician is it’s time to get the furnace and central air unit replaced. So on July 7th they will be installing a new furnace and air conditioner and I will be $ 10,000 dollars poorer, oh wait I will only be 9,902dollars poorer, they are refunding the check up fee. It’s funny, but it’s not. We have been saving up to have a whole house generator installed, were ready to get an estimate, guess how much was in the generator fund? Yup, 9,000 dollars. Thankful we have it but depressing at the same time.
I did though, sell 2 pens to the salesman.

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Brian G

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Check with your utility providers for any rebates they offer. That can knock a few hundred off the bill. Consider multiple bids. That can save some $ in exchange for the hassle. If you get those Val-Pak coupons, you might find opportunities to aid in negotiating.
 

leehljp

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An AC man recommended to me by three others came by to check our 25 year old central AC three weeks ago. He recommended a whole replacement first but said I could get by with an A coil in the attic for $1600 and a 10 year warranty. But Full replacement would lower my electric bill as it would have a higher efficiency rating.

I accepted the A coil and 10 year warranty - I probably won't be living here in 10 years anyway. But Wow, that thing gets cold quick and cycles off for longer times than before. Works like an AC should!
 

KenB259

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Check with your utility providers for any rebates they offer. That can knock a few hundred off the bill. Consider multiple bids. That can save some $ in exchange for the hassle. If you get those Val-Pak coupons, you might find opportunities to aid in negotiating.
Yes I got a 300 dollar rebate from the power company because it is a high efficiency system.


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monophoto

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What a familiar story.

We built our house 18 years ago. Three years ago, the grinder pump failed (we live at the bottom of a hill, and when the grinder pump goes, the phrase 'up s**t creek' comes to mind). We had to have the porch rebuilt because the dude who built the house decided to save 37 cents by using calk rather than flashing, and when the calking failed, water got inside the porch roof and rotted out the structure. Two years ago, it was one of the garage door openers. Last December, on the coldest day of the winter, the furnace failed. I looked into the tea leaves, and decided that the smart thing to do was to proactively replace the water heater before it died - that was in March. Then the second garage door opener failed, followed by the microwave oven (for the second time).

The utility rebates do help. And more importantly, I track our energy usage very closely, and I can see definite reductions in gas consumption due to improvements in furnace and water heater efficiency.

Next on the list - my wife's computer is getting really spastic, and her cell phone is a 3G model and has to be replaced because the carrier is abandoning that service.

Bottom line - there's always something!
 
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Humongous

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Canandaigua, NY
Exact same thing here, new furnace and air conditioner. Same price too! Good to know that I got decent pricing, no difference between NY and MI.
 

JimB

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You can also check to see if your state has a copay program. It is different then the energy company program. In New York there is an income based program. The state will pay up to half the amount of replacing older units with high efficiency units.
 

mark james

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I've been pondering the whole house generator for 2 years now, also a kerosene system. Too many power outages due to falling trees and limbs the last 3 years. But we are also contemplating the real probability that our ability to maintain our house/property is down to 5-10 years.
 

KenB259

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What a familiar story.

We built our house 18 years ago. Three years ago, the grinder pump failed (we live at the bottom of a hill, and when the grinder pump goes, the phrase 'up s**t creek' comes to mind). We had to have the porch rebuilt because the dude who built the house decided to save 37 cents by using calk rather than flashing, and when the calking failed, water got inside the porch roof and rotted out the structure. Two years ago, it was one of the garage door openers. Last December, on the coldest day of the winter, the furnace failed. I looked into the tea leaves, and decided that the smart thing to do was to proactively replace the water heater before it died - that was in March. Then the second garage door opener failed, followed by the microwave oven (for the second time).

The utility rebates do help. And more importantly, I track our energy usage very closely, and I can see definite reductions in gas consumption due to improvements in furnace and water heater efficiency.

Next on the list - my wife's computer is getting really spastic, and her cell phone is a 3G model and has to be replaced because the carrier is abandoning that service.

Bottom line - there's always something!
The garage door opener was a couple years ago, but last year both garage door springs broke. For those that don’t know the springs , on average , last 17 years.


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TonyL

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I just sent several articles to folks eager to buy a house. All the articles agree that a house is not an investment. On a good run of 10+ years the value of a home barely keeps pace with inflation - if one adds the upkeep and improvements, it may return less than that.
The articles state that a house is a place to live the way you want to live. If one keeps that in mind, no one loses.

I know a couple that bought a home in 1963 for 28,000. They sold it in 2016 for 950,000. Without including their 100,000 in upkeep and improvements, it returned 7% (not bad, and ahead of inflation in most years). If I include the 100,000 in upkeep and improvements, the return is under 5%. And this is assuming you paid cash (28,000 in 1963), And remember, to get the money out of your home, you have to pay closing costs and interest money you borrowed.

Enjoy your new A/C. It will keep you cool and comfortable for a very long time! :)

PS. replaced 2 units a few years ago - 2 ton Rheems (I paid 4200 each installed). I am very happy with them. Much more efficient that the 14 year units.
 

KenB259

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I just sent several articles to folks eager to buy a house. All the articles agree that a house is not an investment. On a good run of 10+ years the value of a home barely keeps pace with inflation - if one adds the upkeep and improvements, it may return less than that.
The articles state that a house is a place to live the way you want to live. If one keeps that in mind, no one loses.

I know a couple that bought a home in 1963 for 28,000. They sold it in 2016 for 950,000. Without including their 100,000 in upkeep and improvements, it returned 7% (not bad, and ahead of inflation in most years). If I include the 100,000 in upkeep and improvements, the return is under 5%. And this is assuming you paid cash (28,000 in 1963), And remember, to get the money out of your home, you have to pay closing costs and interest money you borrowed.

Enjoy your new A/C. It will keep you cool and comfortable for a very long time! :)

PS. replaced 2 units a few years ago - 2 ton Rheems (I paid 4200 each installed). I am very happy with them. Much more efficient that the 14 year units.
I agree, I never bought into the idea that a home was an investment even now with historically low interest rates. We look at as where we live and no matter where you live it’s not going to be free. Things break and wear out, no way around it.


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JUICEDSS

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Grand Island, NY
Did you get any other quotes ? Price sounds high to me. I did ac and furnace last year for $4500 installed. I also got rebates from the power company on top of that. It wouldn't hurt to get some more estimates.
 

monophoto

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For those that don’t know the springs , on average , last 17 years.
This is an important point - everything has a life expectancy. The way I look at it is that there is a crossover point between stuff that lasts a very long time, and stuff that I can afford (or choose to afford) to buy, so that means that eventually, stuff has wears out and has to be replaced. That's reality - deal with it.

One of the other things that I had on my list for 2020 was to replace the smoke detectors in our home. They are 18 years old, and are supposed to only be good for ten years. But they are still working - my wife periodically tests them by putting something on the stove, and then becoming distracted reading something on her computer. So I can put that chore off for a while even through I have done the research and know what I need to buy.
 

Gary Beasley

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The house we are in now needed work as soon as we moved in due to some failing joists. Next thing that happened was a total replacement of the septic system to the tune of $23k. After that some dampers on the ac zone controls died and we will have that paid off in a few months. Next we are looking a removal of several poplar trees damaged by the plumbers putting in the septic system that are rotting from bark being torn. This makes it near impossible to plan for any remodeling we would like to do in the near future. The only major improvement was the deck I built mainly because the plumbers wrecked a wooden walkway between the wings of the house, I was able to fill in a good sized area easily building off the old walkways bones.
It never ends does it?
 

egnald

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Columbus, Nebraska, USA
Greetings from Nebraska. I don't even like to think about it. In the past 3 years we have a new HVAC, water heater, tree removal, roof and siding. The HVAC and water heater were broken and the roof had storm damage, but the tree removal and siding was a mandate from my homeowner's insurance company - they gave me 3 months to do it or my policy would be canceled. Personally, I think it was payback for filing an insurance claim on the roof.
 

jttheclockman

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I just sent several articles to folks eager to buy a house. All the articles agree that a house is not an investment. On a good run of 10+ years the value of a home barely keeps pace with inflation - if one adds the upkeep and improvements, it may return less than that.
The articles state that a house is a place to live the way you want to live. If one keeps that in mind, no one loses.


I know a couple that bought a home in 1963 for 28,000. They sold it in 2016 for 950,000. Without including their 100,000 in upkeep and improvements, it returned 7% (not bad, and ahead of inflation in most years). If I include the 100,000 in upkeep and improvements, the return is under 5%. And this is assuming you paid cash (28,000 in 1963), And remember, to get the money out of your home, you have to pay closing costs and interest money you borrowed.

Enjoy your new A/C. It will keep you cool and comfortable for a very long time! :)

PS. replaced 2 units a few years ago - 2 ton Rheems (I paid 4200 each installed). I am very happy with them. Much more efficient that the 14 year units.
That is a sad way to look at things. A house is an investment by all means. You can skew the numbers all you want because inflation. But if you rent or sleep on the street a house is your best investment of your life. Now different states makes this investment more attractive because of various things. A house does not lose value but increases in value. How many things do that??
 

sbwertz

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Our house is 56 years old. We bought it new. Had to finally replace the AC/furnace about five years ago for $6000. But we run Evap most of the summer here in AZ, only running the AC during monsoon and don't need the furnace much in the winter, so they lasted fifty years. (Relative humidity today is 5 percent! Makes that evap work really well. It's 107 outside right now and 79 in the house with just the evap. ) We had to replace the evap about 8 years ago for $1200. Had a new roof about 15 years ago, but it was paid for by the insurance company after a hailstorm. Had to replace the whole-house $3000 water softener system a couple of years ago, water here is REALLY hard. About 10 years ago we enclosed the carport into a wood shop. Did all the work ourselves, so it only cost less than $10,000. That is about it except for things like carpeting, paint, etc. One thing about living in a desert...you don't get rot, mildew, etc. Our houses are built on slabs, not foundations. Very few houses have basements. We don't get hurricanes, or tornadoes, or earthquakes, so we don't have to deal with that kind of damage. Do get occasional hailstorms.

When we bought the house in 1964 we paid 19,500 for it. Today it would sell for about $250,000. I think that was a pretty good investment, since rent would have been more and no equity. It's been paid off for almost 30 years. (But when we bought it, that $234 a month house payment looked really big! We were only making $8500 a year.)
 
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mark james

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In 1987 my wife got a job at Union Carbide in Boundbrook, NJ. I got a job at Elizabeth General Medical Center. We bought a house in East Brunswick, NJ, and after 2 1/2 years decided we would not raise our children there. We got jobs back in the midwest. Sold the house for a $45,000 lose (sold to the corporate relocation agency). Lose money on a house, very easy! Buy high, sell low, or keep for many years and put in the needed annual upkeep! Circumstances dictated, and we were ecstatic to leave, so all was good. We bought a house in Ohio for $75,000 less, and had increased the lot and house size.

I also have 4 relatives that do real estate. None will recommend that your house is your "cash cow" for retirement.

This week I will restain my newly repaired deck (Releveled, a new planter box and power washed). The estimate was 5X what I did myself. But, if I could not do the repairs, it would have been a substantial cost.
 

jttheclockman

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Who ever said to use your home as a cash retirement fund??? A house is an investment or what else is there?? Like I said rent yes no maintenance but no equity. Live on the street, yes no money and we taxpayers will pay for you. Some areas and states are definitely more expensive. Living in NJ is the tax capital of the world. There is good and bad wherever you choose to live. There is always upkeep to something that is weather beaten, used and abused, so what it still an investment and one that will and does pay off everyday you live there. Or else try the alternatives I suggested and go from there and see how that works. I too have relatives that are real estate agents. I do not agree with Tony's statement one little bit. It is just not true. You have to live somewhere. A car is an investment that loses money, that I agree with but again you need a car. Can a house be dragged down in value due to neighborhood changes or for unforeseen reason as utility companies coming in and many more reasons but they are few. Do your homework and stay in touch with your surrounds. This can happen in any state and any area so do not think you are in a perfect bubble.

Look up the word investment.
 

KenB259

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Our house is 56 years old. We bought it new. Had to finally replace the AC/furnace about five years ago for $6000. But we run Evap most of the summer here in AZ, only running the AC during monsoon and don't need the furnace much in the winter, so they lasted fifty years. (Relative humidity today is 5 percent! Makes that evap work really well. It's 107 outside right now and 79 in the house with just the evap. ) We had to replace the evap about 8 years ago for $1200. Had a new roof about 15 years ago, but it was paid for by the insurance company after a hailstorm. Had to replace the whole-house $3000 water softener system a couple of years ago, water here is REALLY hard. About 10 years ago we enclosed the carport into a wood shop. Did all the work ourselves, so it only cost less than $10,000. That is about it except for things like carpeting, paint, etc. One thing about living in a desert...you don't get rot, mildew, etc. Our houses are built on slabs, not foundations. Very few houses have basements. We don't get hurricanes, or tornadoes, or earthquakes, so we don't have to deal with that kind of damage. Do get occasional hailstorms.

When we bought the house in 1964 we paid 19,500 for it. Today it would sell for about $250,000. I think that was a pretty good investment, since rent would have been more and no equity. It's been paid off for almost 30 years. (But when we bought it, that $234 a month house payment looked really big! We were only making $8500 a year.)
That’s very interesting to a midwestern like me, I would have thought you , living in Arizona, would never turn your AC off . I am not familiar with what an Evap even is. Can you clue me in?


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EricRN

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I researched online and the numbers they gave me fell well into the average for our area. I could have got off cheaper but I opted for higher efficiency units.


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Went through this a few years ago too. I’ll at least say that out bills have gone down a bit with the high efficiency units. Not enough to cover the cost. But my house is cool in the summer and warm in the winter, and that wasn’t true when the old units conked out on me.
 

KenB259

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Went through this a few years ago too. I’ll at least say that out bills have gone down a bit with the high efficiency units. Not enough to cover the cost. But my house is cool in the summer and warm in the winter, and that wasn’t true when the old units conked out on me.
If it weren’t for the higher rebates on the higher efficiency units, I might not have opted for them over the 80 percent efficient ones. Between the mfg rebate and the power company rebate, the cost between them were virtually nil, and I should have lower bills, a no brainer in my book.


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Gary Beasley

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That’s very interesting to a midwestern like me, I would have thought you , living in Arizona, would never turn your AC off . I am not familiar with what an Evap even is. Can you clue me in?


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Its an evaporative cooler, built like a box with a big fan that pulls air in through thick coarse filters that have water running down them. In arid environments the evaporating water cools the air very effectively. I lived in Arizona for a year in a small house with a big cooler. You leave windows or doors open to let the air out, I could stand six feet in front of the front door and still be in the cool breeze.
 

KenB259

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Its an evaporative cooler, built like a box with a big fan that pulls air in through thick coarse filters that have water running down them. In arid environments the evaporating water cools the air very effectively. I lived in Arizona for a year in a small house with a big cooler. You leave windows or doors open to let the air out, I could stand six feet in front of the front door and still be in the cool breeze.
Thanks for the explanation. When it gets hot in Michigan, it’s usually humid, so it’s no wonder I have never heard of that kind of cooling.


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sbwertz

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Its an evaporative cooler, built like a box with a big fan that pulls air in through thick coarse filters that have water running down them. In arid environments the evaporating water cools the air very effectively. I lived in Arizona for a year in a small house with a big cooler. You leave windows or doors open to let the air out, I could stand six feet in front of the front door and still be in the cool breeze.
When my son had horse property, we used to put the horses in the yard to "mow" the grass. They had an evap, and the horses would stand with their noses at the open windows to get the cool breeze.
 

sbwertz

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An evap doesn't work with the dew point above 55 degrees. We rarely get there except during the monsoon. Today our dew point is 22 degrees and it is 74 degrees in the house with 95 outside.
For me, there is an added advantage for the evaporative cooler. The outside humidity is 5 percent right now. Inside is 40 percent. I have sjogren's syndrome, which means I don't make enough tears. My eyes are always dry. The higher humidity in the house makes me much more comfortable. In the winter I run a humidifier.
 
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leehljp

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This thread has been on my mind quite a bit and then it hit me. If one buys a house and pays for the upkeep and repairs, the upkeep and repairs are part of it for sure, but buy a house today on a 30 year loan and in 29 years, you will be paying todays prices; but rent an apartment and pay today's prices today - but in 29 years, the price will be equal to the COL increases each successive year. In other words, a $2000 a month apartment today will probably be $10,000 in 30 years at current rate increases, but the house will still be monthly what it is today. With a house you are buying future living on todays prices.
 

jttheclockman

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This thread has been on my mind quite a bit and then it hit me. If one buys a house and pays for the upkeep and repairs, the upkeep and repairs are part of it for sure, but buy a house today on a 30 year loan and in 29 years, you will be paying todays prices; but rent an apartment and pay today's prices today - but in 29 years, the price will be equal to the COL increases each successive year. In other words, a $2000 a month apartment today will probably be $10,000 in 30 years at current rate increases, but the house will still be monthly what it is today. With a house you are buying future living on todays prices.
My point Hank. It is a wise investment. Slice the numbers all you want it is one of your biggest investments you can make and will make in your lifetime.
 

KenB259

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This thread has been on my mind quite a bit and then it hit me. If one buys a house and pays for the upkeep and repairs, the upkeep and repairs are part of it for sure, but buy a house today on a 30 year loan and in 29 years, you will be paying todays prices; but rent an apartment and pay today's prices today - but in 29 years, the price will be equal to the COL increases each successive year. In other words, a $2000 a month apartment today will probably be $10,000 in 30 years at current rate increases, but the house will still be monthly what it is today. With a house you are buying future living on todays prices.
I never even thought about like that, but you are right.


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Curly

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This thread has been on my mind quite a bit and then it hit me. If one buys a house and pays for the upkeep and repairs, the upkeep and repairs are part of it for sure, but buy a house today on a 30 year loan and in 29 years, you will be paying todays prices; but rent an apartment and pay today's prices today - but in 29 years, the price will be equal to the COL increases each successive year. In other words, a $2000 a month apartment today will probably be $10,000 in 30 years at current rate increases, but the house will still be monthly what it is today. With a house you are buying future living on todays prices.
Our mortgages are different. You take out a mortgage for 25 years, more or less if you want, and renew it every one to 7 years depending on what term you sign for and the rate is adjusted to the going rate at the time of renewal. Maybe up or maybe down. Depending on the lending institution you can double up you payments or pay lump sums of 10% to 15% of the mortgage each year and pay it off quicker without penalties. Paying off early saves you interest as it goes on the principle (original mortgage amount). Doing that I payed off a 25 year mortgage in 17 years. Lots of our mortgages can be assumed by buyers if you are selling or can be transferred to a new place if you move. So our system has advantages and disadvantages but your payments will not be the same over the life of the mortgage and when your done.
 

KenB259

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Our mortgages are different. You take out a mortgage for 25 years, more or less if you want, and renew it every one to 7 years depending on what term you sign for and the rate is adjusted to the going rate at the time of renewal. Maybe up or maybe down. Depending on the lending institution you can double up you payments or pay lump sums of 10% to 15% of the mortgage each year and pay it off quicker without penalties. Paying off early saves you interest as it goes on the principle (original mortgage amount). Doing that I payed off a 25 year mortgage in 17 years. Lots of our mortgages can be assumed by buyers if you are selling or can be transferred to a new place if you move. So our system has advantages and disadvantages but your payments will not be the same over the life of the mortgage and when your done.
Adjustable rate mortgages are available here, like everything they are kind of a crap shoot. You never know what will happen with interest rates. My mortgage has no penalties for early payoff. We’ve been paying extra each month from the get go.


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leehljp

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. . . So our system has advantages and disadvantages but your payments will not be the same over the life of the mortgage and when your done.
I agree with that. But that alone does not put long term renting on the same level (value wise) as buying. While interest rates will fluctuate, even considerably in some cases (such as in the late '70s and early '80s), the interest rate is on the "base sale price" the year it is purchased, while renting is primarily ever escalating over extended period of times.
 

mark james

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I fundamentally agree with the advantages of buying a home vs renting, and keeping tabs (every 3-5 years) on refinancing options favorable to the home owner. But, capital gains on your primary home will never be realized until you SELL the house, sell down, or sell up and reinvest the basis. So sure, if you wish to pass on the capital gains to a relative, go for it! If you want to enjoy the capital gains, better plan carefully.

These are complicated issues, and many don't know what they are doing and they cry when the cards do not come up in their favor. My opinion: get out of debt as early as possible, pay cash as much as feasible. I have never carried a loan on my personal vehicle; I saved up and paid cash for my first used car (1973 Dodge Dart), then spent then next 7 years saving each month a little for the next cash purchase. I had a cousin in Canada that taught me that.
 

sbwertz

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I fundamentally agree with the advantages of buying a home vs renting, and keeping tabs (every 3-5 years) on refinancing options favorable to the home owner. But, capital gains on your primary home will never be realized until you SELL the house, sell down, or sell up and reinvest the basis. So sure, if you wish to pass on the capital gains to a relative, go for it! If you want to enjoy the capital gains, better plan carefully.

These are complicated issues, and many don't know what they are doing and they cry when the cards do not come up in their favor. My opinion: get out of debt as early as possible, pay cash as much as feasible. I have never carried a loan on my personal vehicle; I saved up and paid cash for my first used car (1973 Dodge Dart), then spent then next 7 years saving each month a little for the next cash purchase. I had a cousin in Canada that taught me that.
I agree. We have been totally debt free for more than 30 years now. If we can't afford to pay for it, we don't buy it. I do use a couple of credit cards, but they are auto-paid every month, never a balance carried, so no interest. Mostly so I can shop online. We even bought our little motorhome for cash. With no mortgage and no debt, we are easily able to live on our limited retirement income, without going into our savings. It takes discipline, but being debt free is the best feeling EVER.
 

mark james

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I agree. We have been totally debt free for more than 30 years now. If we can't afford to pay for it, we don't buy it. I do use a couple of credit cards, but they are auto-paid every month, never a balance carried, so no interest. Mostly so I can shop online. We even bought our little motorhome for cash. With no mortgage and no debt, we are easily able to live on our limited retirement income, without going into our savings. It takes discipline, but being debt free is the best feeling EVER.
When I was 15 I visited a cousin who lived in Hamilton Ontario. He was 26, and just got booted out from the Canadian Air Force. He said from age 17 - 24 he saved $100 CA, each month for a car. He then bought a used car for $9,000 - all cash. He then started to put $100/mth away the next month for the next car. He is 71 now, never had a vehicle loan (he did have a home loan 30-yr, paid it off in 23 yrs).

I used his suggestions for my personal/business loans. It was was a great model.

Far to many folks are deep in debt in the USA. Sadly, this is because they got in debt early and never figured out that debt was not their friend.
 
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