All Forum Posts by: Karen M.

I am *so glad* you asked this question -- this is a topic I have been ruminating over!  

I'm very interested in LED lighting, and we're starting to try it in our home.  These lightbulbs  are (in theory) meant to last 20+ years (ask me when I'm 65 how that's working out.)  And they are very cheap to run per year.  I'm just wondering if it's a little competitive advantage. 

P.S. I saw LED bulbs at ALDI for $6.XX each -- sounds like a good price!

HI Sascha,

I am a new investor, and I have been listening to what people are saying.  As an investor though, the idea is to be prepared for anything, in case your market thesis does not work out.  Also, if everyone is afraid of the same thing,  sometimes it's the opposite that is what happens. 

A great writer who I enjoy very much is Morgan Housel.  You can enjoy his articles about the US economy at www.fool.com.   He also writes for a major newspaper, I think it is the Wall Street Journal.  His articles are very optimistic and encouraging to investors, and he tries to shift people's thinking and uncover the common investor mistakes in mindset. 

Anyway, I do not have a well-formed opinion.   I listen frequently to stock pundit Jim Cramer.  It seems that interest rates will remain low for a while.  The economy seems to be improving, jobs in the US improving (of course this is area specific).  This is all short term. 

Predicting 3 to 5 years out is hard!  We will all probably guess wrong.  :)    Therefore, you want to get an investment that is going to look good whichever way the pendulum swings.

Good fortune!

Karen

 Andy, I understood it to be -- maintaining 75% or better equity in a property, but I'm not 100% sure.  Let us know, John, thanks! 

 I am working on this for our personal finances -- the statements pile up and it quickly becomes a real mess around the house!   I want a clean dining room table and only a small file cabinet with the most important files only. 

Hello all you smart BP people!

I have a question for today:   How do YOU view debt?    

Here are some sub-questions that you can pick and choose from to add to the conversation:

--> What are your personal "rules" about using debt for your investments? Do you have limits?

--> How do you make debt work for you? 

--> What practices do you put in place that give you peace of mind? 

--> Have you ever been on the edge with debt or struggled with it? 

--> What have you learned from managing debt?   

--> Do you believe in --  own nothing, control everything?  Why or why not?   Is there any greater truth to -- own everything, control everything? 

--> Do you feel there is a difference between personal debt (credit cards, car loan, home mortgage) vs. investment debt vs. business debt? 

Thank you for the conversation!   

Some of you may know from another topic that I am an avid listener of the Dave Ramsey podcast.  Dave is a 100% cash person, and suggests that investors pay off all personal debt and then buy their first rental with all cash, a cheaper home, and that that's a good learning experience.  He also recommends that businesses build up with all cash, often taking a deposit on a sale if materials are needed in the startup phases.  I am personally contemplating how much debt I am comfortable working with and trying to find a balancing point that I can feel very confident with.  :)   

(P.S. I currently have a home mortgage (about 100k equity) and a margin trading account for options and stock shorting to enable certain types of trades that sits largely without use.  I am comfortable with both of these positions, although I am seriously considering paying down the home mortgage.) 

P.P.S.  I cracked open a Ken McElroy book last night to start brushing up. 

I would like to know that if, by investing in rentals, I am ever putting my personal residence at risk.  Would a bad rental ruin my family's assets?  Or am I too scared? 

Remedies I am guessing:

-- consider upping the life insurance

--consider having / coverage of disability insurance

-- rules of thumb for lending totals / reserves and loan paybacks.

How about nasty partners?  Horrible contractors?  I don't know? 

Good point, I am talking buy and hold.   Also, I am thinking of *the worst*.   My worsts are things like --- job loss of primary income,  death of spouse who is the earner,  disability of spouse who is the earner,  property that becomes negative cash flow,  debts falling apart? (does that happen?)  

This is a spin off of another thread where we discussed risk, risk avoidance, risk management, and getting over the fears of getting started.   

Question:  What's the worst that can happen to a real estate investor?  And, how do we protect / prevent each of the worst case scenarios? 

Brainstorm your "worsts" -- let's figure out our protections.  Thanks!   Back later to fill in.