FEHB Premiums Increase 13.5%

[DOD4Life]

VA loans won’t work in a competitive market, looks like the suckers and losers who try it are out of luck.

Worked for me in a competitive market. Sure, sellers prefer to avoid inspection & appraisal if they can, so I did get beat out on multiple houses, but I still found sellers that accepted my offer on the one I got.

 

[r9s]

You are never truly out of debt even if you pay the mortgage off. County taxes and home insurance payments are a housing debt you will never pay off. Rent or buy, it’s all a big game but sadly you will always owe someone. Quality of life and not being the richest dude in the graveyard should be the goals.

homeowners insurance is not required after you pay off your mortgage.

 

[Raise when?]

By that logic renting is the superior investment

I'm pretty sure mathematically renting comes out ahead vs buying in a lot of scenarios especially right now with the higher rates.

There is something to be said about a mortgage however, it protects you against inflation.

 

[GroundClutter]

homeowners insurance is not required after you pay off your mortgage.

Lol right.

But who in the hell would drop insurance on the single most expensive thing people own?

 

[PooseMaGoose]

The average American doesn't have $100k to play the invest vs down payment game. That's what you're missing. These people were poor before and they're now poor and in debt.

They never had the $100k in cash to invest in the first place.

You have six figures in liquid assets for a down payment and you're already much better off than most.

Debt doesn't give you wealth but people who ARE wealthy can leverage debt to make more wealth.

The average American has over $1,500 in non-mortgage debt payments every month: credit cards, auto loans, personal debt, student loans, etc. It doesn’t have to be that bad. Some non-mortgage debt is necessary. I get that.

And yes you are spot on. Not everybody has liquid assets for down payments, to invest or whatever… but the point is, people have been tricked into thinking they can afford something if they can survive the monthly payment. People would be much better off if they actually understood the concept that they CANT afford all the shit they are going into debt for even if they are squeaking by with the minimum payment.

It’s a massive lie designed by the people who profit from debt.. but saying broadly that “debt is good” or “debt is leverage” or “debt is an asset” (or whatever fucked up verbiage one can insert here spinning debt as a positive thing) is an oversimplification that does a disservice to the 99.5% of people who aren’t wealthy and strategically utilize debt.

I’m not trying to put words in your mouth. I 100% agree with your last sentence. However, more often than not, if non-wealthy people (everybody on this forum) are spinning debt into a positive light, it’s probably because they are trying to justify their awful spending habits in their head.

 

[GroundClutter]

The average American has over $1,500 in non-mortgage debt payments every month: credit cards, auto loans, personal debt, student loans, etc. It doesn’t have to be that bad. Some non-mortgage debt is necessary. I get that.

And yes you are spot on. Not everybody has liquid assets for down payments, to invest or whatever… but the point is, people have been tricked into thinking they can afford something if they can survive the monthly payment. People would be much better off if they actually understood the concept that they CANT afford all the shit they are going into debt for even if they are squeaking by with the minimum payment.

It’s a massive lie designed by the people who profit from debt.. but saying broadly that “debt is good” or “debt is leverage” or “debt is an asset” (or whatever fucked up verbiage one can insert here spinning debt as a positive thing) is an oversimplification that does a disservice to the 99.5% of people who aren’t wealthy and strategically utilize debt.

I’m not trying to put words in your mouth. I 100% agree with your last sentence. However, more often than not, if non-wealthy people (everybody on this forum) are spinning debt into a positive light, it’s probably because they are trying to justify their awful spending habits in their head.

#nailedit

This sums it up nicely after my generalization about the poors.

Financial literacy is not taught enough and Dave Ramsey ain't it. Not many people even slightly grasp it.

I still make the joke that it doesn't matter what you can afford just what you can afford a month. Truthfully before this job that was true for me like everyone else running out auto loans to 72mo to make the payment then just rolling negative equity in to the next one etc.

I know our spending and the frivolous BS we buy but we're now in a position we pay the card off every month for the sweet points.

 

[AB19]

If financial literacy was taught who would the banks make money off of. Think of the banks

 

[32andBelow]

#nailedit

This sums it up nicely after my generalization about the poors.

Financial literacy is not taught enough and Dave Ramsey ain't it. Not many people even slightly grasp it.

I still make the joke that it doesn't matter what you can afford just what you can afford a month. Truthfully before this job that was true for me like everyone else running out auto loans to 72mo to make the payment then just rolling negative equity in to the next one etc.

I know our spending and the frivolous BS we buy but we're now in a position we pay the card off every month for the sweet points.

Bro I always go off about monthly cash flows and people just stare at me. Almost all businesses operate on monthly cash flow.

 

[ATCJoe85]

more often than not, if non-wealthy people (everybody on this forum) are spinning debt into a positive light, it’s probably because they are trying to justify their awful spending habits in their head.

Any advice must be based on its merit. As long as it has merit, the quality of the source is irrelevant.

Reality is, leveraging debt can be mathematically advantaguous. Most people who are in debt didn't obtain it for purposes of leveraging.

The only argument I've heard people make for why high-interest car or credit card debt is a good thing is for purposes of a good credit score (advice that does NOT have merit). But nobody in this forum is arguing that.

Also, not sure what your basis is for assumption of wealth in this forum. Obviously most of us don't meet the general consensus of wealthy (2.5M), but most of us are also not all in our 50s and 60s. I'd bet within our age groups, a good lot of us are wealthy by any reasonable standard.

 

[PooseMaGoose]

Any advice must be based on its merit. As long as it has merit, the quality of the source is irrelevant.

Reality is, leveraging debt can be mathematically advantaguous. Most people who are in debt didn't obtain it for purposes of leveraging.

The only argument I've heard people make for why high-interest car or credit card debt is a good thing is for purposes of a good credit score (advice that does NOT have merit). But nobody in this forum is arguing that.

Also, not sure what your basis is for assumption of wealth in this forum. Obviously most of us don't meet the general consensus of wealthy (2.5M), but most of us are also not all in our 50s and 60s. I'd bet within our age groups, a good lot of us are wealthy by any reasonable standard.

My definition of wealth does not include any of us on P65 because we are all still working for the FAA… if any of us were wealthy, our first thought would be resignation, not complaining about pay and staffing online 😂

 

[Raise when?]

My definition of wealth does not include any of us on P65 because we are all still working for the FAA… if any of us were wealthy, our first thought would be resignation, not complaining about pay and staffing online 😂

💯

 

[Slarti Bartfast]

I'm pretty sure mathematically renting comes out ahead vs buying in a lot of scenarios especially right now with the higher rates.

There is something to be said about a mortgage however, it protects you against inflation.

I agree with weird fish man pressing button.

His numbers are dated but today it works out even more in favor of renting. And he uses only 2% gains on that $100k invested.

You have to run your own numbers of course to see how it works out, but for me I'm paying $1250 for rent in SoCal and a mortgage would be at least $3000 a month. I put way more than the difference into investing which will be used for buying in a much cheaper state when I retire.

 

[32andBelow]

I agree with weird fish man pressing button.

His numbers are dated but today it works out even more in favor of renting. And he uses only 2% gains on that $100k invested.

You have to run your own numbers of course to see how it works out, but for me I'm paying $1250 for rent in SoCal and a mortgage would be at least $3000 a month. I put way more than the difference into investing which will be used for buying in a much cheaper state when I retire.

I’ve never seen a Market where you can rent for 1250 and mortgages are 2.5X more. If that’s true then renting would make a lot of sense lol

 

[Slarti Bartfast]

I’ve never seen a Market where you can rent for 1250 and mortgages are 2.5X more. If that’s true then renting would make a lot of sense lol

Yeah I got something good going. I'm taking advantage of it.

 

[the inquirer]

Yeah I got something good going. I'm taking advantage of it.

Im going to assume you arent comparing apples to apples here. If you're renting a room in a house or even a 1 bedroom apartment, you can't compare it to having a mortgage on a 3 bedroom house.

 

[Gauff]

I’ve never seen a Market where you can rent for 1250 and mortgages are 2.5X more. If that’s true then renting would make a lot of sense lol

Yeah if renting vs buying have a similar monthly payment or even renting being slightly cheaper, I feel like buying is almost always better as your monthly payment goes to equity. When you move if you were renting you have nothing to put down on a house vs if you move when you had bought a house all those monthly payments generally go to the down payment on the next house.

Now if there's a massive difference between renting a 3 bed house vs buying a 3 bed house like was said then yeah rent and invest the rest to beat the interest on the mortgage

 

[Slarti Bartfast]

Im going to assume you arent comparing apples to apples here. If you're renting a room in a house or even a 1 bedroom apartment, you can't compare it to having a mortgage on a 3 bedroom house.

Right, I'm comparing my 2 bed apt to a condo. Again, just my example, everyone's is different.

 

[DOD4Life]

Yeah if renting vs buying have a similar monthly payment or even renting being slightly cheaper, I feel like buying is almost always better as your monthly payment goes to equity. When you move if you were renting you have nothing to put down on a house vs if you move when you had bought a house all those monthly payments generally go to the down payment on the next house.

Now if there's a massive difference between renting a 3 bed house vs buying a 3 bed house like was said then yeah rent and invest the rest to beat the interest on the mortgage

You also get to deduct mortgage interest & property taxes when you file your taxes each year. If you rent, your monthly rent payment likely pays for both the mortgage interest & the property taxes of the landlord/property owner, but you don’t get to deduct that.

 

[ATCJoe85]

My definition of wealth does not include any of us on P65 because we are all still working for the FAA… if any of us were wealthy, our first thought would be resignation, not complaining about pay and staffing online 😂

I see what you're driving at, but it isn't that fair of an assessment given:

1. most ATC wealth will probably be tied up in TSP and home equity. Resigning short of eligibility and liquidating TSP/ other retirement investments would be extremely disadvantageuous mathematically.

2. The pension is a huge tie down. If that went away tomorrow, there'd be a mass resignation. My math on it came to an equivalency as if I had invested an extra ~30,000 a year, which even 10 years in would be around 425K (at 8%). So while many of us may be wealthy relatively speaking, we might not be 'flush 400k down the toilet' wealthy.

 

[PooseMaGoose]

I see what you're driving at, but it isn't that fair of an assessment given:

1. most ATC wealth will probably be tied up in TSP and home equity. Resigning short of eligibility and liquidating TSP/ other retirement investments would be extremely disadvantageuous mathematically.

2. The pension is a huge tie down. If that went away tomorrow, there'd be a mass resignation. My math on it came to an equivalency as if I had invested an extra ~30,000 a year, which even 10 years in would be around 425K (at 8%). So while many of us may be wealthy relatively speaking, we might not be 'flush 400k down the toilet' wealthy.

Yeah, man… I think we are just playing a game of semantics at this point. When I used the word wealthy, I’m referring to individuals that have a net worth affording their children the option to go to work or not… That sort of thing.

I don’t think it’s unfair to say that unless they have received some sort of inheritance or won the lottery, no air traffic controller has become wealthy off of their federal income. They may have gotten rich and made very wise financial decisions, but the term wealthy in the context I’m using it is not what you were talking about. Semantics- but my main point still stands.