Thursday, April 17, 2008

Why do we Wait?

Why do we wait out the housing bubble? Why do some hate giving money to the government (taxes)? Why do others regularly fret over their investments? Why do we clip coupons and shop around for the best deal?

In the end, I guess it boils down to having more money to do with as we please. But what exactly does that get us?

Most Americans seem to view money as an end in itself, a symbol of status and power. So I was delighted to see a column in the WSJ that addressed this issue a little differently. What’s more, most of the benefits outlined in his column do not require vast sums of wealth. It’s all about lifestyle choices and pursuing what makes us happy. Of course, this avenue of thought caused me to reflect on my personal situation.

Since we moved back to California I have been the happiest I can remember (which to some degree, I define as the absence of stress in my life). In fact, I keep waiting for the other shoe to drop because my life’s experiences have taught me to expect tough times. We have paid off our enormous student loans (around 100k), so the only debt we have is a small car payment. Now that we are back in California, we are just a short drive away from family and friends, whom we see on a regular basis. We have also met some really nice families and made some friends (I have come to realize that the snobby attitude in EDH comes more from the people who work here, as opposed to the people who actually live here). And last, but certainly not least, I have a family and a job I love. None of these things are directly tied to our income level. In fact we took a sizable pay cut, in Mr. BT’s salary to come back to California.

All this to say, I don’t think money necessarily buy's happiness, but it does allow you spend more time on the things you enjoy (assuming you choose to do so). All the $$ we are saving by waiting out the bubble won't necessarily make us happier, but it will relieve financial stress and will likely go toward our childeren's college education.


sacramentia said...

(I have come to realize that the snobby attitude in EDH comes more from the people who work here, as opposed to the people who actually live here)

You've been assimilated :-)

Buying Time said...

As you can probably tell, I was in a "count my blessings" kinda mood.

I have traveled to several places around the country in the last year with my job. With each additional visit, I find that my appreciation for the quality of life I enjoy in Sacramento grows stronger.

Sippn said...

but Nebraska is so much more affordable.

Sippn said...

me thoughts...

was looking at an housing study on OCR Lasner and noticed that Stockton, as bad as it is, does not rate a mention in the study. It is so small and affected as a suburb of SF .....

we're hearing that with the median under $200K, sales are taking off as investors (not speculators) see cash flow and buyers see the cost of housing vs fuel OK in Stockton.

SF bay area at 50-70% income:housing costs!!! complain about Sacramento? Thats why they drive from Stockton or Davis or Elk Grove. The drive is why we can't measure the ratios properly as people commute.

Glancing through high cost coastal markets, seeing as high as 76% income:housing expenses enforces my thoughts that Sac will never hit that blogger desired 30-35% ratio, but it will stay below 50%.

Those numbers only exist in the middle states, the unregulated states, (where AB doesn't want to live and DJ only threatens to go :))

Sacramento's sweet spot for 3/2 homes seems to be just under $250 for rental investments and just over for those who want to live in them. Remember, most of these homes require immediate $20-30K in fixes and repairs for habitability.

I would call that the base price in someplace like Antelope, paying a premium for better locations, condition, etc.

Talking to a credible builder friend of mine today who said the cheapest point in construction costs was last fall (2007) and his numbers today have increased due to fuel impacts.

Speaking of snobbery, I always get a kick shopping at the Whole Paycheck Market (Whole Fuds) when the checkers tell me they're going to open another store in mid town "because they're so health aware there" .... its such BS as they are only opening stores where there is a lot of income and money (Arden and Folsom). People shop there because their food tastes good and there's lots of prepared stuff! See me at the olive bar. The wannabes (black shirt crowd) that shop on Saturday nights especially crack me up. Actually I prefer Nugget.

Jacob said...

I like having money in the bank instead of debt. It does make me happy just knowing that I have that cushion.

I still want a home that I own (and I intend to own it not just rent it from the bank) but I am concerned about a few things. First, I dont want to lose tons of money and when we hit the bottom I will have plenty of time to buy, and secondly, and more importantly, I want to wait and see what neighborhoods fall apart and make sure I buy in a good area, but who can be sure where that is with so many foreclosures happening every day.

Deflationary Jane said...

Oh sippin, you're going to have to try harder to bait me >; )


I saw this on NYT, linked through to Apartment Therapy (fabulous site if you haven't seen it yet).
On the Cheap
Don’t Hate Me Because I’m Solvent

Totally reminded me of you and our discussions about working on a reno with your children. I remember working on projects with my dad as we built a stable behind our house and cleared orange trees on the perimeter of our old OC house. We had a blast. They are my most cherished memories of him.

Sippn said...

Didn't expect you to.