Stock Market

[rickandcindy23]

If I were 20 years younger, the only change I would make would be to diversify a bit more into real estate. I think that takes more research / knowledge base than stocks and involves more stress but when done well, the returns are definitely there.

Colorado real estate values are insane!

I agree with this statement because our townhouse [we rent out] went from a value of $149K in 1999 to $105K in 2009, and now it's worth $257K. I wish we purchased the ones that were foreclosed and selling for $105K in the same complex back then. One of our son's friends let his townhouse go for back to the bank for a paltry $149K mortgage, and about five years later, the newest buyers paid $300K for the same unit. Maybe the foreclose buyer did some work on it, I don't know. I thought it was already pretty nice, but I would have added granite and some better bathrooms.

Rent was a paltry $900/ month a few years ago to $1,450 now. The place is nice, but I am sure thinking of selling while the market is hot.

 

[PigsDad]

Just a push of a few keys beyond 3-4% and off to the races on the downside. Plenty of air in many floating balloons - richly priced. quite a move in IBM- guess buffet & co. brk.a and buyback took it up and caught some napping.

works both ways. it's coming. patience.

Funny you should mention IBM. That is one of my long-term stocks and about a month ago I picked up some more shares at $132 when it was "on sale". The price goes up, the price goes down, but the dividend is the golden egg.

10 years ago, a share of IBM paid $1.20/year in dividends. Today that same share now pays me $5.20/year. 4.3X in 10 years -- I'll take that! When I buy stocks, I like to see a history of good dividend growth because in the long run, I think that is a very good indicator of a good long-term stock to hold.

This also illustrates the power of a dividend-driven retirement portfolio -- it has automatic "pay raises" built in.

Kurt

 

[John Cummings]

Colorado real estate values are insane!

I don't think that is any more insane than California, Arizona, Nevada, etc. Our home value went from $300k in 2002 to $625k in 2006 to $245k in 2010. Now it is back up to $440k. The good thing when it dropped a way down is our property tax also went down by the same percentage.

 

[PigsDad]

I don't think that is any more insane than California, Arizona, Nevada, etc. Our home value went from $300k in 2002 to $625k in 2006 to $245k in 2010. Now it is back up to $440k. The good thing when it dropped a way down is our property tax also went down by the same percentage.

That's very different than here. Property taxes here are based on a mill levy targeting a total amount of tax revenue. The only way our taxes go up or down (given the same mill levy) is if our property value increases or decreases relative to other properties. If everyone's property increased 10% for example, everyone's taxes would remain the same. However if my property increased 20% and the average across the county / tax district increased 10%, my taxes would go up. Conversely, if my property value increased 5% and the average was 10%, my property taxes would go down.

Kurt

 

[John Cummings]

That's very different than here. Property taxes here are based on a mill levy targeting a total amount of tax revenue. The only way our taxes go up or down (given the same mill levy) is if our property value increases or decreases relative to other properties. If everyone's property increased 10% for example, everyone's taxes would remain the same. However if my property increased 20% and the average across the county / tax district increased 10%, my taxes would go up. Conversely, if my property value increased 5% and the average was 10%, my property taxes would go down.

Kurt

Our property tax rate is fixed at 1% of assessed value. The assessed value is the purchase price of the property. The assessed value is capped so it cannot appreciate more than 2% a year however it can decrease with no downside limit. I have friends living in million dollar homes that pay less than $1,000 /yr property tax because they have been in their homes for a long time. This is the infamous Prop 13 enacted in 1978.

 

[PigsDad]

Our property tax rate is fixed at 1% of assessed value. The assessed value is the purchase price of the property. The assessed value is capped so it cannot appreciate more than 2% a year however it can decrease with no downside limit. I have friends living in million dollar homes that pay less than $1,000 /yr property tax because they have been in their homes for a long time. This is the infamous Prop 13 enacted in 1978.

That must wreak havoc on municipalities, etc.! Just because real estate prices go down, their operating revenue needed to provide the same services at the previous year goes down as well? Glad I'm not in CA!

Kurt

 

[John Cummings]

Glad I'm not in CA!

Kurt

That is your choice. I wouldn't live anywhere else.

 

[klpca]

If I were 20 years younger, the only change I would make would be to diversify a bit more into real estate. I think that takes more research / knowledge base than stocks and involves more stress but when done well, the returns are definitely there.

Kurt

Back in 2010 we decided to diversify our portfolio and bought a condo in downtown San Diego. That has greatly outperformed our other investments. We use a property manager (money well spent if you ask me) so it's been an easy investment. I'm on the fence about buying more because prices are high but still looking for the right property.

That must wreak havoc on municipalities, etc.! Just because real estate prices go down, their operating revenue needed to provide the same services at the previous year goes down as well? Glad I'm not in CA!

Kurt

For the most part our real estate prices only go in one direction, and it's not down. That's was part of the allure of prop 13 all those years ago. It put a reasonable lid on tax increases. Properties get reassessed upon sale - so the taxes are brought up to market at that time. My in-laws live less than a mile from the beach near LA in a small house. They have lived there since 1964. Their taxes are under $1,000 per year. Their neighbors are paying over $8,000. We've lived in our house since 1987 - and we're not moving. I would rather travel than pay more taxes.

 

[SmithOp]

We've lived in our house since 1987 - and we're not moving. I would rather travel than pay more taxes.

Dont let that stop you from moving, props 60/90 allow you to transfer your property tax base for an equal or lesser value property.

http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm

 

[WinniWoman]

Back in 2010 we decided to diversify our portfolio and bought a condo in downtown San Diego. That has greatly outperformed our other investments. We use a property manager (money well spent if you ask me) so it's been an easy investment. I'm on the fence about buying more because prices are high but still looking for the right property.


For the most part our real estate prices only go in one direction, and it's not down. That's was part of the allure of prop 13 all those years ago. It put a reasonable lid on tax increases. Properties get reassessed upon sale - so the taxes are brought up to market at that time. My in-laws live less than a mile from the beach near LA in a small house. They have lived there since 1964. Their taxes are under $1,000 per year. Their neighbors are paying over $8,000. We've lived in our house since 1987 - and we're not moving. I would rather travel than pay more taxes.

That is great! Here in Hudson Valley NY our house, which we purchased newly built in 1987 for $208,000, is now assessed at $247,000, market value (according to the town and realtors, not Zillow, which has it assessed at $300,000) and $179,900 tax assessed value and we pay $9000 in school and property taxes total each billed separately. We have since put a couple of hundred thousand into it and it doesn't matter. It is on 10.5 acres but only assessed on like 5 acres because the rest is considered forestland an is not sub dividable.

I might add that we get no services whatsoever except snow plowing. No sewers, no road maintenance- they are all crumbling. No garbage or junk pick up. No water. Nothing....All our money goes to Medicaid and supposedly the highway dept, (yet we don't see much of the benefit of that anywhere).

It's pathetic. And it is about to get worse for reasons I can't write about here for political reasons. Suffice it to say our community is being taken over by a religious group.

In fact, there was just an article out yesterday that said NY - in particular the county I live in- has had the most exodus of any. This is why my husband and I keep getting called for jury duty every 5 years. No one living here anymore. And the religious group people don't have to serve.

Homes aren't selling. We are worried we will be trapped when we retire.

 

[wilma]

I might add that we get no services whatsoever except snow plowing. No sewers, no road maintenance- they are all crumbling. No garbage or junk pick up. No water. Nothing....All our money goes to Medicaid and supposedly the highway dept, (yet we don't see much of the benefit of that anywhere).

Homes aren't selling. We are worried we will be trapped when we retire.

Really, you don't have any police, firefighting services, first responders, libraries, or schools in your area?

 

[geekette]

Funny you should mention IBM. That is one of my long-term stocks and about a month ago I picked up some more shares at $132 when it was "on sale". The price goes up, the price goes down, but the dividend is the golden egg.

10 years ago, a share of IBM paid $1.20/year in dividends. Today that same share now pays me $5.20/year. 4.3X in 10 years -- I'll take that! When I buy stocks, I like to see a history of good dividend growth because in the long run, I think that is a very good indicator of a good long-term stock to hold.

This also illustrates the power of a dividend-driven retirement portfolio -- it has automatic "pay raises" built in.

Kurt

IBM has been giving Double Digit Div Raises. I don't get that on the job! Also long Big Blue. This is how I will be able to quit work and not worry about taxes and inflation - the growth in dividend dollars received.

dripinvesting DOT org Tools section has a Dividend Champions spreadsheet available free, updated monthly, that shows companies with long div Increase histories. Note that failure to increase the dividend, or cut it, removes a company from the list. The compiler, David Fish, does keep a changes tab so you can see when/why a company of interest came off the list.

 

[klpca]

Dont let that stop you from moving, props 60/90 allow you to transfer your property tax base for an equal or lesser value property.

http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm

Thanks for the reminder. We're keeping that in our back pocket. Since that's a one time deal, we won't use it until we think that we are making our last move to a smaller, easier to maintain house. Truth is that we love our home - mostly the memories of raising our kids here. We may move someday, we may not. I'm grateful that we won't have to make that decision based upon the property tax liability.

 

[John Cummings]

Dont let that stop you from moving, props 60/90 allow you to transfer your property tax base for an equal or lesser value property.

http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm

That depends on the county you move to. Not all counties allow you to transfer your tax base in.

 

[WinniWoman]

Really, you don't have any police, firefighting services, first responders, libraries, or schools in your area?

We have volunteer fire dept. In fact, our homeowners insurance dropped us because they said the fire dept. was too far away- 10 miles.

Yes- there is a school- that is half the taxes. That school is in another county that serves 3 counties. I had one kid.

There is a tiny library that always sends out requests for donations. The public school has a library of course.

The EMT's come 25 miles from another county.

We have no police. We have to utilize state troopers who's barracks are about 10 miles away. When my burglar alarm went off last summer it took 40 minutes for them to send someone out.

In fact, when they send out our tax bill they send a memo that shows where the taxes go and # 1 is Medicaid. # 2 Highway.

It's the Twilight Zone here.

 

[John Cummings]

Yes- there is a school- that is half the taxes. That school is in another country that serves 3 counties. I had one kid.

In another country?

 

[WinniWoman]

In another country?

Of course, I meant county. I corrected the spelling.

 

[IngridN]

Dont let that stop you from moving, props 60/90 allow you to transfer your property tax base for an equal or lesser value property.

http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm

Unfortunately, the counties still participating are not the ones you want to live in. DH is retiring next year and none of the counties we would like to move to participate so we're staying put and if we downsize, it will be in the same county. My dream of a cottage on the beach is not to be .

Ingrid

 

[IngridN]

Thanks for the reminder. We're keeping that in our back pocket. Since that's a one time deal, we won't use it until we think that we are making our last move to a smaller, easier to maintain house... ...

Google participating counties. I think you'll be very disappointed.

Ingrid

 

[John Cummings]

Of course, I meant county. I corrected the spelling.

I didn't mean to offend you by being the spelling police. It just struck me as being rather funny.

 

[klpca]

Unfortunately, the counties still participating are not the ones you want to live in. DH is retiring next year and none of the counties we would like to move to participate so we're staying put and if we downsize, it will be in the same county. My dream of a cottage on the beach is not to be .

Ingrid

You could probably do that in San Diego. Our home prices are crazy, but not as crazy as the Bay area. But I imagine that you are staying put for the same reason that we are - friends and family. It's the main reason that we won't move. That and the weather.

 

[SmithOp]

Unfortunately, the counties still participating are not the ones you want to live in. DH is retiring next year and none of the counties we would like to move to participate so we're staying put and if we downsize, it will be in the same county. My dream of a cottage on the beach is not to be .



Ingrid

Completely disagree with you on this, San Diego, Orange, LA, and Ventura are on the list, IMO where the best beaches are located. We sold in Sacramento county last year and moved to Orange, 15 minutes to the beach, dont miss the cloudy, rainy days at all.

 

[IngridN]

I should have added that we want to stay in Northern California. We were hoping to move to Monterey or thereabouts...not too far south.

Ingrid

 

[John Cummings]

I should have added that we want to stay in Northern California. We were hoping to move to Monterey or thereabouts...not too far south.

Ingrid

When we bought our new house in the Bay area we wanted to transfer our tax base from San Diego county but discovered that it wasn't allowed. When we bought our new home here in Southern California it was allowed but we wouldn't gain anything because our tax base on our NorCal home was a lot higher than the purchase price of our new home in Socal.

Our son and his family live in Monterey. It is a beautiful area but much too cool for us.

 

[WinniWoman]

I was telling my husband about the low property taxes in California and he was shocked! We always here about how expensive California is.

I guess it's the real estate prices then? The income taxes? Sales taxes?