OT: How do you truly beat these inflation/sky-rocketing costs?

[PooPopsBaldHead]

For real, seems like everybody I know has one, and especially if they did any home repairs. I myself got one with an ARM 10 years ago, and the bank REALLY put effort into getting me to keep it open. Luckily I didn't, and haven't had one since. It's like people can't stop. Even people who bought their houses in 2010-2012, who should be doing awesome right now as far as equity, are still leveraged due to upgrades they financed through a HELOC.

I wouldn't be too concerned about it causing anything catastrophic any time soon, at least in regards to housing. It could hurt other discretionary things (cars, pools, vacations, boats) as the Heloc well dries up from bank getting more austere.

As for housing itself:

Even though our total housing market is worth more than double than the 2007 peak, total US Heloc balances add up to half of what they did in 07'. Even in 07' they played a very minor role in the collapse of housing and the economy. The biggest contributions to that came from the mortgage industry lunacy and inventory levels




Helocs are currently less than 1% of total housing value.

 

[thatsbaseball]

They been doing that my whole life. Never borrow the amount that your creditor says you are good for. It is always more than you can pay back/comfortably pay back.

Understand and completely agree. The point is people like yourself and me are in a definite minority when it comes to turning down insidious credit offerings by lenders.

 

[Dawgs_4_life]

I thought everyone on this board was loaded with money!! I'm glad to see I'm not the only member of the poors around here....

We cook at home. We buy meat on sale and freeze. Vacations have been cut back tremendously and we are doing more camping/hiking/fishing trips then before. We probably go out to eat about once a month now. I do my own landscaping and house maintenance. We buy used cars and drive them until they perish. I also do most of our vehicle maintenance. I did a side hustle a good bit last year to help pay down some debt. The wife just recently got promoted, but before that she would work a part time job. It is rough out there right now. It always bounces back though. Americans can put up with a lot. We have survived recessions, bad leadership, wars, idiots in Congress etc...... We will make it through this one also.

 

[horshack.sixpack]

The balance is simple. Stop/slow down foreign aid when your own economy is stumbling. I know that's an oversimplification, but the mere creation of this thread is enough of an indicator for me.

Conceptually, I get it. Practically, international issues are largely decoupled from our immediate national concerns until they aren't. e.g. Russia invades Ukraine, etc. Realistically, I have no confidence that if we suddenly halted all foreign aid any of it would hit my wallet. Of course I'm still waiting on the casino money from MS casinos to fund my college education like it was going to do...

 

[IBleedMaroonDawg]

I was hoping we can keep this conversation sane before you use the red herring of Trump. Everybody knows Trump will not be reelected, but both Dems and Repubs keep mentioning his name to derail the conversation, which to me is disingenuous to the real problems we have. I'm not trying to blame anybody for how we got here, that bogs us down and finger-pointing, which doesn't solve anything.

Where we are as a country is very dangerous, and it's not getting any better. I don't care what rate of inflation is it right now and some guy whispering over microphone that it's working; it's not working. I can't afford to buy groceries on a fixed income. I have re-budgeted about four different times in the last two years, so don't tell me the answer is a new budget. I need something to bring prices back down to affordable levels so that we can fill up our cars and trucks and buy groceries without needing a loan. I've cut the amount of food I buy as much as I possibly can.

If you're going to solve all the problems, this country starts with the biggest problem we have as a country. The biggest problem we have in this country is that we are being run by people who have aged past the point that they can competently do their jobs.

 

[dorndawg]

I've cut the amount of food I buy as much as I possibly can.

As a Sxpacker, this is still several thousand dollars a month. I feel your pain.**

 

[Leeshouldveflanked]

We will all be equally poor before long. You will eat ze bugs and be happy!

 

[OG Goat Holder]

I've cut the amount of food I buy as much as I possibly can.

I've legitimately cut the amount of food I've EATEN. And that's a good thing I suppose, but it's got to get pretty drastic to make someone do that.

 

[aTotal360]

The biggest contributions to that came from the mortgage industry lunacy and inventory levels

Exactly. The appraisal racket coupled with the HELOCs was the biggest issue that doesn't get enough blame. I know several people who bought a new house for 300k, got it appraised at 400k (because the HELOC lender's brother-in-law was the appraiser), then pulled out that 100k in "equity" via a HELOC and put a King Ranch in the garage. This happened a lot in quickly expanding areas from 2003-2007 where it was difficult to monitor the silliness. Dodd Frank has cleared up the majority of this.

 

[johnson86-1]

Gotcha. Yeah, it isn't "right", but I fear that what we are used to is not what we will see for a bit.

ETA: I wonder how much of that is fuel/fuel cost related? I bet a lot.

A good chunk of the last reading was due to energy but "core" inflation was still 3.7% over the last year and in the last month, it's still on pace for a over 3.3% annual inflation, so it's not like we have it under control except for energy and food. It's still too high but the fed is betting that inflation will continue to come down as the impacts of the interest rate increases continue to work their way through the economy. I think they're probably right but damn it is painful.

 

[ckDOG]

Speaking of beating inflation. Anyone have preferred high yield savings accounts they are using? I've got some cash in a regular savings account with BoA that probably gets 0.00001%. I have to get rid of that.

 

[horshack.sixpack]

A good chunk of the last reading was do to energy but "core" inflation was still 3.7% over the last year and in the last month, it's still on pace for a over 3.3% annual inflation, so it's not like we have it under control except for energy and food. It's still too high but the fed is betting that inflation will continue to come down as the impacts of the interest rate increases continue to work their way through the economy. I think they're probably right but damn it is painful.

Oil costs screws everything because of shipping cost correlation. Food requires it for production and distribution so it has to be a high % of that too?

 

[horshack.sixpack]

Speaking of beating inflation. Anyone have preferred high yield savings accounts they are using? I've got some cash in a regular savings account with BoA that probably gets 0.00001%. I have to get rid of that.

I sweep cash into FDRXX at my Fidelity account. I'm sure there are others that do the same thing.

 

[Dawghouse]

Wild isn't it? As it stands today we are going to decide between a strong man thug that will be more focused on retribution than running the executive and a man that might not know where he is at any given moment.

It'll be an election of who can lose fewer votes and whoever that is has a pretty solid shot at dying during their next term. Frail, old, and confused vs fat, old, and angry isn't a good choice for the political stability of the country. Surely the parties can do better? Do they even want to? Feels like some insane simulation that can't be real...

I think the dems have Gavin newsome on the back burner just in case anyone on the republicans side can dethrone Trump in the primary (I don't think they will).

if trump wins the primary the dems think Biden can win because so many people hate trump. With Biden president those currently running the country (not Biden btw) will continue to run the country. If anyone not named trump wins the primary, they beat Biden running away (hence the need for newsome).

my theory anyway. It's a disgrace to have to choose between those 2 old idiots.

 

[L4Dawg]

Wild isn't it? As it stands today we are going to decide between a strong man thug that will be more focused on retribution than running the executive and a man that might not know where he is at any given moment.

It'll be an election of who can lose fewer votes and whoever that is has a pretty solid shot at dying during their next term. Frail, old, and confused vs fat, old, and angry isn't a good choice for the political stability of the country. Surely the parties can do better? Do they even want to? Feels like some insane simulation that can't be real...

The astounding thing is that the Democrats know that if they run anyone other than Biden or Harris, they easily defeat Trump. Also, the GOP knows that if they run anyone but Trump, they easily defeat Biden. At least one side will eventually blink. My money is on the Dems because such a large part of the GOP is all about Trump. They have an easier out than the GOP does.

 

[johnson86-1]

The astounding thing is that the Democrats know that if they run anyone other than Biden or Harris, they easily defeat Trump. Also, the GOP knows that if they run anyone but Trump, they easily defeat Biden. At least one side will eventually blink. My money is on the Dems because such a large part of the GOP is all about Trump. They have an easier out than the GOP does.

The Democratic Party has shown they have a much greater ability to influence their nomination. They have voters that are tired of always being lied to, but at the end of the day, Bernie sort of represents them and at the end of the day, he is part of the party apparatus and I'm not sure he even wants to win as much as enjoying being sort of controlled intraparty opposition. Then of course a huge percentage of mainstream media will take their cues from the democratic party, so they can exert some control over the narrative also.

On the other side, the GOP lost all control between a bunch of former democrats flooding over along with Trump and constantly lying to voters over issues voters care about. And Democrats are doing everything they can to ensure Trump is the nomination and a lot of republicans are letting themselves be played. And while Fox would have taken cues from the corporate side of the GOP, Fox doesn't have a lot of credibility with the people that would need to be convinced that Trump is a bad candidate and that there is a reason dems are pushing so hard for him to be the candidate.

All that to say, Dems are comfortable with where they are now. Getting rid of Biden and running Kamala would be a disaster for them, and skipping over her for Newsome could cost them some votes in the general (although I kind of question whether many african american voters would really be bothered by that; surely she seems just as awful to them?). Unless it looks like Trump won't win the nomination or Biden gets worse and can't even string some coherent sentences together for soundbites, I don't think they will make any change.

 

[Maroon Eagle]

The astounding thing is that the Democrats know that if they run anyone other than Biden or Harris, they easily defeat Trump. Also, the GOP knows that if they run anyone but Trump, they easily defeat Biden. At least one side will eventually blink. My money is on the Dems because such a large part of the GOP is all about Trump. They have an easier out than the GOP does.

Folks used to make the pragmatic Adult choice.

But so few people are into Adulting now.

 

[ETK99]

There's almost a 0% chance republicans win the presidency. They should focus on congress.

 

[L4Dawg]

The Democratic Party has shown they have a much greater ability to influence their nomination. They have voters that are tired of always being lied to, but at the end of the day, Bernie sort of represents them and at the end of the day, he is part of the party apparatus and I'm not sure he even wants to win as much as enjoying being sort of controlled intraparty opposition. Then of course a huge percentage of mainstream media will take their cues from the democratic party, so they can exert some control over the narrative also.

On the other side, the GOP lost all control between a bunch of former democrats flooding over along with Trump and constantly lying to voters over issues voters care about. And Democrats are doing everything they can to ensure Trump is the nomination and a lot of republicans are letting themselves be played. And while Fox would have taken cues from the corporate side of the GOP, Fox doesn't have a lot of credibility with the people that would need to be convinced that Trump is a bad candidate and that there is a reason dems are pushing so hard for him to be the candidate.

I agree, the Democrats desperately want Trump to be the GOP nominee. They are doing everything they possibly can to ensure it, and the Trump wing of the party is falling for it hook, line, and sinker. The Democrats want this election to be about Tump and ONLY Trump.

 

[johnson86-1]

I’m not a Trump fan by any means. I personally think that he is a despicable human being but I think history has shown that his fiscal policies were deemed favorable by the market. I’ve been a saver since soon after I entered the workforce and while I’m no expert I probably know my way around the stock market better than the average person. I made 2-3 times as much money during Trumps four years than I did 8 years of Bush and 8 years of Obama combined and now Biden has robbed me of about 50% of my Trump gains. I wish Trump would have stayed out of this election and I won’t vote for him in the primary but I’m afraid he will get my vote in November because I can’t vote for Demento.

Not that Trump's policies weren't better for the economy than Obama's and Biden's, you can't really see that in the stock market. Lots of other things are happening that are important and the stock market movement isn't going to be dominated by presidential actions. And presidents have a lot more ability to hammer the economy through rulemaking than they do to improve it.

 

[thatsbaseball]

Speaking of beating inflation. Anyone have preferred high yield savings accounts they are using? I've got some cash in a regular savings account with BoA that probably gets 0.00001%. I have to get rid of that.

Check their brokered CD's

 

[IBleedMaroonDawg]

I've legitimately cut the amount of food I've EATEN. And that's a good thing I suppose, but it's got to get pretty drastic to make someone do that.

Somebody who doesn't make a smart *** comment. The only thing we spent thousands on is our home.

I'm spending the same amount on groceries. I'm just buying less with the same money. We have adjusted by eating less. America, what a great country.

 

[IBleedMaroonDawg]

There's almost a 0% chance republicans win the presidency. They should focus on congress.

People vote for incumbents more than party affiliation.

 

[stateu1]

I sweep cash into FDRXX at my Fidelity account. I'm sure there are others that do the same thing.

It's at 4.98%

 

[DesotoCountyDawg]

There’s a conundrum for housing.
I’ll give an example in my sister in law. They have more house than they need now and would like to downsize but downsizing does no good because the price of houses in Desoto county have steadily risen and then you lay on top of that the interest rate on a mortgage and you’re back to square one or in some cases worse off.

 

[ETK99]

People vote for incumbents more than party affiliation.

I think that's changing. People are growing tired of career politicians and the old folks are dying.

 

[OG Goat Holder]

There’s a conundrum for housing.
I’ll give an example in my sister in law. They have more house than they need now and would like to downsize but downsizing does no good because the price of houses in Desoto county have steadily risen and then you lay on top of that the interest rate on a mortgage and you’re back to square one or in some cases worse off.

I'm not understanding this. She should be theoretically selling a house that is also more expensive than the downsized home, and I assume with some equity. She should come out better, specifically by the amount of price difference in the homes. Minus real estate and closing, etc. IR adds some, but does it really eat up the difference?

 

[DawgieDust]

If we continue to release a quarter of million illegal families into the country a month. Rent, food, shelter, homes, medical care, schooling, infrastructure, ect will continue to increase. All at the expense of the Country of course. And by the way America is broke too!

 

[DesotoCountyDawg]

I'm not understanding this. She should be theoretically selling a house that is also more expensive than the downsized home, and I assume with some equity. She should come out better, specifically by the amount of price difference in the homes. Minus real estate and closing, etc. IR adds some, but does it really eat up the difference?

The difference in the equity isn’t as much as you would think and the cost of a new home plus a much higher interest rate than what she has makes it not as enticing.

 

[Mobile Bay]

The CCs are scary but I worry about HELOCs
Lot’s of homeowners have seen a significant growth in their equity and I’m sure lots of them used it for HELOCs. So you’ve got homeowners that are potentially paying higher property taxes and insurance because of property values, Higher energy costs on their homes, and higher HELOC rates. Don’t want to be Michael Burry but it’s a little worrisome.

This is why being 100% debt free is awesome.

 

[deltadawg82]

Think it's bad now? Wait until ww3 starts and a barrel of oil is 160 bucks

 

[aTotal360]

I'm not understanding this. She should be theoretically selling a house that is also more expensive than the downsized home, and I assume with some equity. She should come out better, specifically by the amount of price difference in the homes. Minus real estate and closing, etc. IR adds some, but does it really eat up the difference?

I have lots of older clients in the same boat. They bought a 4-bed house in 1997 for 225k. Now they are empty nesters and their house is worth 600k. The problem is a 2 bedroom new(er) construction in the same area cost around 600k.

 

[deltadawg82]

I think the dems have Gavin newsome on the back burner just in case anyone on the republicans side can dethrone Trump in the primary (I don't think they will).

if trump wins the primary the dems think Biden can win because so many people hate trump. With Biden president those currently running the country (not Biden btw) will continue to run the country. If anyone not named trump wins the primary, they beat Biden running away (hence the need for newsome).

my theory anyway. It's a disgrace to have to choose between those 2 old idiots.

Latest poll had trump up 10 points on biden.

 

[sandwolf.sixpack]

The big boom in exploding home sizes really took place in the 90's and early 00's. Most of the costs since then revolve around regulation, dwindling labor force, and urban/suburbanization.

That said... our standards for home sizes are stupid. We should all reset those expectations tbh. It's the only immediate solution to making housing more affordable. Been through this exercise myself.


I have owned 4 houses in the last 10 years. Here they are:

#1 1600sf no kids
#2 2300sf 1toddler/1 infant
#3 3400sf 1 little guy/1 toddler
#4 1350sf 1 big kid/1little guy

We have never been happier. Have a guest room and everything. We have had several families and groups of friends come stay for a week or more in our little house over the past few years. My wife works from home and has a dedicated office space and my kids have a big play/game/TV area.

Smart design and large outdoor living areas are the key to make our small house feel plenty big.

With a family of 4, you have enough room leftover for office space, a game/play room, and a guest room in a 1350 sf house? I don't guess you would post a copy of your house plans would you?

 

[Mobile Bay]

Please don't think that all the graphs in the world are gonna convince me that the stock market is largely unaffected by the sitting president. As sure as Fauci shut down the country, and this new guys is trying to shut down beer production, Biden has been twisting on the 'ole stock knob.***

They are not shutting down beer production. Good lord.

 

[ETK99]

The difference in the equity isn’t as much as you would think and the cost of a new home plus a much higher interest rate than what she has makes it not as enticing.

People have stopped selling because of it. The market/economy is just out of whack right now. There's still construction going, but the bigger part of that is commercial housing (apartments etc). High rates used to mean lower costs, but Covid hold ups still have that screwed up too.

 

[PooPopsBaldHead]

The difference in the equity isn’t as much as you would think and the cost of a new home plus a much higher interest rate than what she has makes it not as enticing.

This is the Golden Handcuffs effect. It's considerably cheaper to stay where you are for 99% of homeowners right now, even if downsizing.

I bought my house in 2021 with 20% down. If I were to buy it from myself now with 20% down my mortgage would more than double... No thanks.

 

[stateu1]

I'm not understanding this. She should be theoretically selling a house that is also more expensive than the downsized home, and I assume with some equity. She should come out better, specifically by the amount of price difference in the homes. Minus real estate and closing, etc. IR adds some, but does it really eat up the difference?

He's saying the note would be relatively the same due to interest rate increases.

 

[OG Goat Holder]

He's saying the note would be relatively the same due to interest rate increases.

I could see that. I just don't view it the same because I look at it in terms of payoff amount.

 

[Dawgbite]

You obviously could have made individual stock choices that makes all your statements correct, but S&P 500 performance doesn't back you up

View attachment 412545

S&P 500 Performance by President

This interactive chart shows the running percentage gain in the S&P 500 by Presidential term. Each series begins with the closing value of the month of inauguration and runs to the closing value of the last month of the term. The y-axis shows the total percentage increase or decrease in the...

www.macrotrends.net

Do you think maybe if Engie explained all this to Edward Jones and Fidelity that they would reimburse me a little? 85% of my money is invested pretty conservatively but that other 15% is ready to bet on the horse who takes a dump right before entering the starting gate.