Originally Posted by
Delta1067
Actually all of your assumptions are wrong. 2 of my the homes I bought were bank sales 2 years ago in markets where they are now worth close to 25% more than what I paid for them. They are now worth that much more because the bank sold them well below market value and they are in a market where the prices have been going up the past couple years. My main home I have owned for 15 years and luckily I'm not upside down since It was purchased well before the bubble burst. The other 2 homes are investment rental property. Sorry you wasted all your examples and assumptions on someone where they don't apply. As far as your $44,000 brand new pick up, well you really need to educate yourself. One of the dumbest financial moves out there.
No, my assumptions weren't wrong. I omitted the caveat that yes, even in a down economy and a bad housing markets, there are areas to make money. In fact, buying while the market is low is smart. You are lucky to not be upside down on your home. Congrats.
HOWEVER, we weren't discussing the housing market or your investments.
Instead, folks were trying to tell you how inflation affects your life whether you choose to acknowledge it or not. Simply put, a dollar today isn't worth what a dollar was yesterday. Even if you are ahead on your investments, they aren't worth as much as you think they are due to inflation.
You should spend some time talking to your parents and grandparents about the late seventies when interest rates were 20% and the yearly inflation rate nearly hit 14%. For example, that $190,000 home at a 20% interest rate would have a monthly payment of $3174 and cost roughly $1.14 million dollars total over the life of the loan! With an inflation rate at 14%, imagine needing $114 dollars to buy what $100 did last year. And then $130 dollars the following year and so on. It happened in the 70s! Learn from history.
The reason why some guys on here are worried about our contract and the lack of protection from inflation is that many economists have been predicting a return to stagflation which developed in the 70s due to our government's printing of money (or "quantitative easing".