Sorry that this is off topic, but I’m confused about your recommendation to buy the I-shares TIPS ETF. This has gone way down in the last year (I think). Is it really as safe as buying TIPS from the Treasury? Thanks for MaxiFi and all your great commentary.
Hi Darryl, TIPS have also lost value. If you buy and hold TIPS to maturity, your return, after inflation, is guaranteed. The taxes on the return will depend on inflation. So they aren't perfectly safe against inflation. But they are about as safe as it gets. When the market price goes down, the yield goes up, so the product of the two stays the same. This is why buying and holding is safe (apart from taxes). The for sure payoff at the end anchors things. Hope this helps. best, Larry
Home affordability for Gen Z and Millennial’s is very low relative to prior generations. Rents relative to income reduce savings rates along with student debt.
We need a GI bill for Gen Z and Millennial’s or we are going to have less social stability. Just don’t let Wall Street manage it
Agree. This is a big problem. It's party foreign investors securing their money by parking it in US real estate. How big this is, I don't know. But it's worth a careful study. New Zealand faced this problem and is now restricting foreign ownership to non residents. Thanks for raising this. Food for thought.
Hi Michael, Can't say for sure how big a deal foreign purchase of housing is for major U.S. cities. But check out the Plaza Hotel in NY at night. it's now a condominium and most of the apartment lights are out as the units are owned by rich folk from all over who are keeping their money safe in empty apartments. best, Larry
Zoning, land scarcity, overcrowding, public transport and ...
This is a very nasty situation for those who are working in places like SF and really can't afford the American Dream. I do think we need to consider the New Zealand policy on foreign purchase of homes that go unoccupied.
I think you are right. I live in the Bay Area and have two sons living in San Francisco who are both diligent savers and investors. They wont be buying a house any time soon...
In California i think we should let homeowners over 55 sell their home with ZERO capital gains. Houses are filled by empty nesters that wont sell because the capital gains tax is huge. It is no cost to the government to let the homes be sold with no tax because these owners are simply handing the homes tax free to their kids when the pass.
It would open up lots of houses and increase the taxes paid on these houses
Sorry that this is off topic, but I’m confused about your recommendation to buy the I-shares TIPS ETF. This has gone way down in the last year (I think). Is it really as safe as buying TIPS from the Treasury? Thanks for MaxiFi and all your great commentary.
Hi Darryl, TIPS have also lost value. If you buy and hold TIPS to maturity, your return, after inflation, is guaranteed. The taxes on the return will depend on inflation. So they aren't perfectly safe against inflation. But they are about as safe as it gets. When the market price goes down, the yield goes up, so the product of the two stays the same. This is why buying and holding is safe (apart from taxes). The for sure payoff at the end anchors things. Hope this helps. best, Larry
Home affordability for Gen Z and Millennial’s is very low relative to prior generations. Rents relative to income reduce savings rates along with student debt.
We need a GI bill for Gen Z and Millennial’s or we are going to have less social stability. Just don’t let Wall Street manage it
Agree. This is a big problem. It's party foreign investors securing their money by parking it in US real estate. How big this is, I don't know. But it's worth a careful study. New Zealand faced this problem and is now restricting foreign ownership to non residents. Thanks for raising this. Food for thought.
Did not realize how much of a roll foreign investment played on this. I thought it was mostly a wage issue
Hi Michael, Can't say for sure how big a deal foreign purchase of housing is for major U.S. cities. But check out the Plaza Hotel in NY at night. it's now a condominium and most of the apartment lights are out as the units are owned by rich folk from all over who are keeping their money safe in empty apartments. best, Larry
That is of course very anecdotal.. On the west coast we hear of nothing but Chinese nationals buying every house that goes for sale with cash..
Bottom line is we need more houses. Why are we not building houses?
Zoning, land scarcity, overcrowding, public transport and ...
This is a very nasty situation for those who are working in places like SF and really can't afford the American Dream. I do think we need to consider the New Zealand policy on foreign purchase of homes that go unoccupied.
I think you are right. I live in the Bay Area and have two sons living in San Francisco who are both diligent savers and investors. They wont be buying a house any time soon...
In California i think we should let homeowners over 55 sell their home with ZERO capital gains. Houses are filled by empty nesters that wont sell because the capital gains tax is huge. It is no cost to the government to let the homes be sold with no tax because these owners are simply handing the homes tax free to their kids when the pass.
It would open up lots of houses and increase the taxes paid on these houses