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Comment by rootsudo | Hacker News Reader

On the flip side: your retirement is dependent on the property listed in the article and if no improvements are needed while it generates a return…

It means you’re a landlord!

Congratulations!!

Give yourself a round of applause. By not maintaining it, you are electing to keep cash flow high and profits secured. The overall commercial market has negative numbers so even if said REIT is down 2.65% it’s hedged together with numerous properties in a nice geographic arbitrage opportunity to minimize losses.

Is that really… So bad?

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I suppose that depends on whether you’re a human being who lives in a place or an investment portfolio. A lot of people seem to get confused about that, but as a human, I’d say I don’t love the outcomes here, personal portfolio performance notwithstanding, and might be willing to trade a couple points for a living environment that isn’t a soulless budget management exercise.

As a friend once noted, the great thing about living in America instead of Europe is that we make enough money living here instead of there that we’re able to take vacations in Europe.

"You" is 10-20% of the US population. The rest will never actually be able to afford retirement, and have no investments. 50% don't have an extra $500 in case of emergency.

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edit: Financial literacy is not alchemy. It will not turn nothing into something. The price of consumption has risen insanely (which is why investors have done well), and consumption when you're poor is not optional or luxurious.

There may not be a lump of labor, but there's certainly a lump of profit. 10-20% are getting it because 80-90% aren't. We've created a society (again) where the people who are most rewarded are the people who work the least (and whine about school lunches and shoplifting.) Owning things is the most lucrative job you can have; if you exclusively own and don't work, you've probably doubled or tripled your worth since covid. If you worked, at the lowest end you've barely kept your head above water, and at the middle end you've lost major ground. If you're either lower or middle, and you've accidentally reproduced (bad morlock!), you could be homeless after a single bad year.

With the high end worker is where you need financial literacy; but if you don't spend enough, how are you going to meet the people who will employ you or find you employment? Assuming they'll come to your small, somewhat comfortable apartment far from your workplace, attracted by your home haircuts and your cheap but comfortable clothes to have conversations about your used books, houseplants, and how hard your bicycle commute is, over one of your three board games - you've now moved the meter to 15-25% being able to retire one day. Congratulations, you're European.

Objection 1: Are you arguing that it's not 50%, but more like 40%? Because I wasn't attempting an exact figure. You gave me a median number that is under a Bronze plan's deductible. One concussion will bankrupt them. A childbirth will throw them into $10Ks of debt.

Objection 2: 50% report owning stock in a Gallup poll. Which I'm sure includes at least 60% saying "you mean some money in a 401K?" Temp services have 401Ks that some people have contributed hundreds of dollars to.

You’re not wrong, but the onus is on whom to provide financial literacy?

The majority of people do have a safety net in social security. While it may not be enough, it is something…

Is it something? like do you think the program will still be around in 50 years for today's graduates, etc?

1. I’ll be in that cohort so yes, I hope it’d be around.

2. There is a cost of living adjustment matched to inflation.

3. It was supposed to supplement your retirement not fund it.

But I do agree it is on shaky ground with the current administration and the future of the US dollar in the world. The problem is, if I’m critical of it and it crashes, I get nothing. So why would I be critical of my own interest?

Do I have alternatives such as buying vanguard ETFs and minimizing risk? Yes, is that the primary vehicle? More assurance than social security, that’s for sure.

But who knows what’d happen in 25 years.

> the onus is on whom to provide financial literacy

Should be a huge part of the K-12 curriculum in a putative capitalist country, but we barely touch on it.

Kids graduate high school and don't really understand time value of money or how a credit card, a 401k, a car loan, or a mortgage work.

Maybe things have changed since 2022, but per the Fed's survey that year, the median American had $8,000 in transaction accounts alone (not unrealized stock gains, vehicles, houses, retirement, etc.). Because that's a median, 50% of the population had that much or more. By age cohort, the smallest median dollar amount was under 35s with $5,400, and the largest was 65-74s with $13,400

https://www.federalreserve.gov/econres/scf/dataviz/scf/chart...

Those numbers are usually a bit iffy, but also retirement funds and emergency funds are separate things and you can have a retirement fund without a big emergency fund. If your plan for a rare emergency is "don't pay off the credit card in full for two months" then that's probably fine.

Well over 50% of the US population has investments. https://news.gallup.com/poll/266807/percentage-americans-own...

> Are you arguing that it's not 50%, but more like 40%? Because I wasn't attempting an exact figure. You gave me a median number that is under a Bronze plan's deductible. One concussion will bankrupt them. A childbirth will throw them into $10Ks of debt.

OK then say that! The made up $500 emergency number is not true and thus not an effective argument. The precariousness and contingency of healthy and self-sufficient life as regards $5-10,000 emergencies absolutely is an effective argument! You take my statement of fact as a statement of opinion counter to yours when we are probably closer than you'd think.

Funny enough it was getting my wages garnished to pay for the MRI that my insurance didn't cover after I got a concussion when I was hit by a car on my bike commute that got me really into politics that demand we apply material analysis to material conditions, if you catch my meaning.

A common saying is that in real estate, you make your money when you buy and when you sell, in other words not paying too much and timing sales to profit from appreciation. Cash flow from rent isn't a big part of it, that normally covers taxes, insurance, debt servicing, and maintenance but not a whole lot more.

Well, it depends, if you’re going for ARV and appreciation, cash flow helps a lot on holding costs.

While I agree with you make money when you buy/biggerpockets quotes, you want cash flow to minimize holding costs.

I've been investing in real estate for decades now, and the version I've always heard is that you make your money when you buy, NOT when you sell.

Also, other than flippers, the vast majority of real estate investors I'm familiar with are very focused on buying cashflow, and prefer never to sell. It might be different for REITs focused on CRE, I'm not as familiar with that space, but my impression has always been that the biggest and most successful investors are buying and holding, not trading.

Sure, if you're buying in an appreciating area, and the rent covers the carrying costs, you hang on to the property as long as you can or as long as the property is a still a good fit in your diversification plan.

I would agree that not overpaying is probably the most important thing.

True, but in exchange, “you” (meaning all of us) get to live out our lives and eventually our retirements in a bland, depressing facsimile of a culture.

I think neighborhoods that people see as "authentic" are actually bland and depressing to their initial occupants. Do you want to live in an outdoor museum for the sake of strangers who don't suffer the routine grind of poor-people life to come and oggle your mismatched buildings and blankets hanging over your balconies?

There are some historic districts in my hometown and it's because they have rows of posh but nearly identical houses. That uniformity seems to be part of what makes now gives them "character".

Well yes, but usually the initial occupants are long gone before these neighborhoods become desirable. Some of it is rarity, but some of it is the presence of design elements (whether accidental or intentional) that aren’t present in most newer developments. Sometimes this is because the buildings have features that aren’t allowed under newer building codes, and sometimes the neighborhoods grew organically when land was cheaper, so you get better walkability or interesting neighborhood features.

It’s possible to build new buildings that are interesting and unique, it’s just very expensive under current zoning, building codes, and local planning restrictions, so it usually only happens with very large structures.

Landlords and rent seeking are bad by its very nature. Sometimes people got no choice but to deal with the devil, but the fact that people that are forced to deal with the devil doesn't make it any better or acceptable to increase dealings with the devil.

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