Things You Know Will Happen

[Smitty-48]

Real estate market crash Q4 FY21

I'm calling it.

As long as inflation happens a little bit after, I'm all happy with that... because that is when I'm looking to buy a house...

if interest rates rise, then you offset with fixed income, the increase in mortgage rate is offset by bond yields

the home is a savings account that you live in, but in the event of interest returning, you can spread it around

I don't even have to sell my home to access the capital, it's a million dollars in equity to use as I please

[DBTrek]

Inflation is great with a fixed mortgage.
Sure, bread may cost $500.
But hey, your house payment is still $2k.
So ... basically paying off your house with four loaves of bread a month.

[DBTrek]

Of course ... the fact that the banks ain't ever going to accept 4 loaves of bread for a mortgage payment is exactly why inflation probably won't ever go to hyperinflation. The Fed would rather jack the interest rates to the moon than let the banks go broke on locked-in mortgage rates.

[Smitty-48]

Inflation is great with a fixed mortgage.
Sure, bread may cost $500.
But hey, your house payment is still $2k.
So ... basically paying off your house with four loaves of bread a month.

I don't recommend going fixed, I always went variable, pocketed the difference

inflation is your friend if you are a debtor

your mortgage is getting smaller all the time

in terms of the mortgage rate increasing, you will get a corresponding offset in your other savings accounts

what you lose on your mortgage rate, you make back on bonds

[DBTrek]

I wouldn't take bonds if you paid me to take them, personally.
And the Fed may soon be doing that.

/shrug

(I should probably specify - US Treasury Bonds)

[Smitty-48]

I wouldn't take bonds if you paid me to take them, personally.
And the Fed may soon be doing that.

/shrug

the only way interest rates rise is by bond rates rising

so when your mortgage rate is rising, so are bond rates, so suddenly bonds make sense again

you will see the money shift from stocks to fixed income, as the interest rates rise

the stock market is inflated because there is no yield in bonds

but interest rates is the yield, when those come back, so do bonds

it's all about hedging, what you lose in one venue, you make back in another

it's like a default swap, the bonds are your insurance policy against rising interest rates

[The Conservative]

Inflation is great with a fixed mortgage.
Sure, bread may cost $500.
But hey, your house payment is still $2k.
So ... basically paying off your house with four loaves of bread a month.

I don't recommend going fixed, I always went variable, pocketed the difference

inflation is your friend if you are a debtor

your mortgage is getting smaller all the time

in terms of the mortgage rate increasing, you will get a corresponding offset in your other savings accounts

what you lose on your mortgage rate, you make back on bonds

I'm doing a fixed, and refinance when everything calms down, if I can build my credit up 120 points during the time when everything is going to hell, I see nothing but good news for me in the future.

Here is the thing, if I plan accordingly, I can pay off my house in 15 years instead of 30... at the rate I have been saving, I technically could pay it off in 10.

[Smitty-48]

Inflation is great with a fixed mortgage.
Sure, bread may cost $500.
But hey, your house payment is still $2k.
So ... basically paying off your house with four loaves of bread a month.

I don't recommend going fixed, I always went variable, pocketed the difference

inflation is your friend if you are a debtor

your mortgage is getting smaller all the time

in terms of the mortgage rate increasing, you will get a corresponding offset in your other savings accounts

what you lose on your mortgage rate, you make back on bonds

I'm doing a fixed, and refinance when everything calms down, if I can build my credit up 120 points during the time when everything is going to hell, I see nothing but good news for me in the future.

Here is the thing, if I plan accordingly, I can pay off my house in 15 years instead of 30... at the rate I have been saving, I technically could pay it off in 10.

you have a son, so your appetite for risk is lower than mine

it's like I am multimillionaire now, parleyed my inheritance 1000%, you gotta have money to make money

but the main thing was, I was playing with house money, so I was more willing to let it ride

[The Conservative]

Inflation is great with a fixed mortgage.
Sure, bread may cost $500.
But hey, your house payment is still $2k.
So ... basically paying off your house with four loaves of bread a month.

Also, for me, I have been working on the aeroponics/hydroponics system, and so far I've only had to buy a handful of things once, since I've been doing it, I've been continuously growing food in a fish tank for almost 4 months now.

Bread can cost what it will, I have 100lbs of flour, I buy bulk twice a year, I have all intention of being the one demanding the $500 for that loaf of bread because I'll be making it...

[The Conservative]

I don't recommend going fixed, I always went variable, pocketed the difference

inflation is your friend if you are a debtor

your mortgage is getting smaller all the time

in terms of the mortgage rate increasing, you will get a corresponding offset in your other savings accounts

what you lose on your mortgage rate, you make back on bonds

I'm doing a fixed, and refinance when everything calms down, if I can build my credit up 120 points during the time when everything is going to hell, I see nothing but good news for me in the future.

Here is the thing, if I plan accordingly, I can pay off my house in 15 years instead of 30... at the rate I have been saving, I technically could pay it off in 10.

you have a son, so your appetite for risk is lower than mine

it's like I am multimillionaire now, parleyed my inheritance 1000%, you gotta have money to make money

but the main thing was, I was playing with house money, so I was more willing to let it ride

I have a son, and my risk level is not as low as you think it is. If you don't take risks, you can't reap the rewards.