401k or home ownership

Hello,

If you had neither a home of your own nor a 401k established, where would you be putting your money? My employer doesn't match and I'm renting in New York City.

Thanks,

seth

Reply to
seth.engstrom
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The questions that come to mind is this - What is your current rent? What would your cost be for the place you want to buy? (Mort+Tax+Fees if any) How much downpayment are you prepared to put up?

These answers would help respond to the underlying question, buy vs rent. I believe that NYC is still in the valuation phase where rent makes more sense, but each situation is likely to be different.

My gut also says that if you are unable to save (in 401 or IRAs) even with the mortgage, you may be overextending, but without more details, you'll get many vague answers, each poster having their own idea about the rest of your situation.

JOE

Reply to
joetaxpayer

[...]

I read the underlying question as "401k vs home ownership", much the same as the subject of the post.

[...] but without more details,

Of course he'll get vague answers, since the original question is uselessly vague. The OP should add more information such as approximate age, family status, career prospects, income level and current level of debts/assets.

-Mark Bole

Reply to
Mark Bole

snip

OP will get very different replies if his rent is $600 vs buying identical unit for $250K, or paying $2000 rent vs buying for $200K. Either way, he posed the question within his text as [(401+Rent) or (Buy Home)]. Why do you object to focusing on the buy vs rent which is inextricably part of his decision process?

JOE

Reply to
joetaxpayer

while renting I started my 401k I then purchased a condo 3 years later, and real house about 8 years from when I first started.

I would look to use 401k immediately. This money needs time to grow and is an investment in your future.

I would think that you could buy property "anytime", and researching this while using the 401k to save money is a good start.

Reply to
jIM

Amen to that. I believe that the essence of good personal finance is to live within one's means. Further, that saving for the future - part of which is a retirement plan - is an integral part of monthly "expenses". So in this case my preference would be to first be saving for the future (401k preferred, amount varies by age) before thinking about how much and when for housing.

Of course, despite my brilliance and extraordinary good looks, nobody agrees with everything I say.

-HW "Skip" Weldon Columbia, SC

Reply to
HW "Skip" Weldon

"Mark Bole" wrote

Suze Orman is on a par with Clark Howard, Dave Ramsey, Scott Burns, and many other financial advisors now popular in the media. What she says differs little from what any of the regulars here say. So I do not understand why she is so popular to slight here, unless it is because she is a woman? Please, folks, criticism of Kyosaki is constructive here. Make your criticism of others in the media handing out financial advice just as constructive.

Reply to
Elle

I wasn't criticizing, I was praising her for getting background information before offering financial advice, contrasted to what often happens in this group. But I was aware at the time of my comment what was posted about Suze Orman at the joetaxpayer.com web site, whose reply to my reply, I was replying to. (I *knew* I should have just sent him a private e-mail, which was my first inclination...)

Why you would think that financial advice from a woman would be judged on that basis alone?

-Mark Bole

Reply to
Mark Bole

"Mark Bole" wrote

What I have observed is three throwaway comments about Orman in the last several weeks here, without any concrete justification provided for them. Groups.googling turns up numerous vulgar comments directed at her on Usenet, though mixed often with other posts saying her counsel is essentially sound. I see no such throwaway or vulgar comments, here or elsewhere on Usenet, directed at Clark Howard, Dave Ramsey, Scott Burns, or even Kyosaki.

I have made my point and advise returning to the OP's situation. I agree him/er giving us more information would be more efficient.

Reply to
Elle

I think many people feel that Suze Orman is in your face obnoxious. It isn't so much that her information may or may not have value in every instance. Kiosaki gets his share of negatism as well.

Reply to
Ed

I've made remarks about her, as Mark noted, on my site, in regard to specific advice she gave;

1) she advises a woman to take her entire cash savings of a few thousand dollars, and pay off a car loan. 2) she advised a retired man that he should put 'up to 20%' of his savings into gold.

I make no judgments based on her gender or affectation (as Ed says "in your face obnoxious). I do think that advisors have an obligation to offer sound advice, and I continue to find cases where she does not. (But more than that, where the advice is dangerous) I read very few "question and answer" columns, but I find little reason to argue against Scott Burns, or for that matter, the woman who writes the Q&A in Smart Money.

Kiosaki is in a league by himself, actually closer to Gallagher than to anyone offering advice, sound or not.

JOE

Reply to
joetaxpayer

"joetaxpayer" wrote re Suz Orman

You summarized what you say you heard on a Suze Orman show. I do not know if it's accurate. Nor do I know if you captured the entire context.

It's also impossible to tell the context of this advice.

Joe, I am not going to argue with you on this. What I said before stands.

Reply to
Elle

I was aghast when I saw, heard, or read (can't remember which now) her

20% advice. This has come up here before and this link provides more context:

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Kinda funny advice after this bit on Larry King:

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KING: Do you ever recommend gold or silver?

ORMAN: No, never.

KING: You ever recommend commodities?

ORMAN: Never.

KING: Never?

ORMAN: Never.

Although she justifies her position on Yahoo!:

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"It's been hard not to take a shine to gold lately. In the past year, an ounce of the precious metal has shot up from under $450 to more than $646 as I write this. And plenty of bullion bulls think it could go to $1,000 an ounce."

Great reasoning for changing a fundamental tenet of your advice, eh?

I can't stand her myself, and I think she "often" gives bad advice. My wife has heard me rant about her many times (particularly when I saw/heard/read the 20% advice above - I came unglued at the time, providing loads of entertainment value for my wife).

Her gender is not an issue for me. As far as I know. But then maybe I have latent misogynistic tendencies...

-Will

Reply to
Will Trice

Can you provide a link where she changes her advice? In this link that you posted, she simply talks about certain metals investments and some ways to play the market. She never suggests that one run out and do this. Rather, the way I read it, she is saying that if you are already interested, here are some ways to play it. In fact, she even points out a key pitfall in the way many folks invest in gold.

The fact of the matter is that even with the recent run up in gold prices, it is still a net looser long term, being one of the single worst investments that one could make.

-john-

Reply to
John A. Weeks III

This should be a good link. I quoted the question verbatim and summarized the answer with no prejudice (i.e. I don't believe I snipped to remove anything from the context) when I referred to it.

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&search=suze%20gold JOE

Reply to
joetaxpayer

That's the kind of stuff I find troublesome, and it's not hard to find those kinds of nuggets amongst the more typical kinds of recommendations she gives.

I can imagine an inexperienced investor hearing that comment, directed at a RETIREE of all things..."consider placing just a portion of your assets in precious metals; as much as 20 percent seems reasonable to me" and thinking that's the normal, typical, conservative thing to do. Twenty percent is a pretty big number, given the volatility of precious metals prices, and the limited time a retiree has to see prices snap back after they fall (with gold, 30 years hasn't been enough).

In fact I have yet to meet an individual who puts 20% of their assets in precious metals, unless you count the kind that comes in little blue boxes. Maybe that's what she meant -- not an investment -- she's extrapolating from that "two months salary" DeBeers ad campaign?

Does gender have anything to do with it? No, of course not. Whether it was coming from Suze or Jim or Rupaul, 20% is too much to tell beginning investors to put into precious metals, which aren't really even an asset class. And as I said it's not hard to find these kinds of "huh?" recommendations.

Separate beef: recommendations made on limited info. But we're all guilty of that and certainly, the radio/TV/phone-in format doesn't lend itself to comprehensive analyses.

-Tad

Reply to
Tad Borek

It isn't fair to take one posting, and then read it without context. Suze has a long history of giving advice, and has a large body of work in the form of books and past speeches. You need to look at the big picture and not single out little snippets. Doing the latter, one could probably find a quote that says just about anything, so long as you ignore context.

-john-

Reply to
John A. Weeks III

Joe, your site's latest alleged misadvice from Suze Orman concerns a late 40s couple with 2.5 million dollars to invest. This is the net from a recent home sale. You leap to advise the couple to become "loaded on stocks." But the couple says they want to "hang on to the principal." As you say to Suze on your site, "wake up." You do not probe, either, after all. You have the gall to disregard their wishes and insist that the future will repeat the past, re historical stock returns.

Are you aware that, of the two choices, "all money in the stock market or all money in TIPs," Robert Shiller advises holding only TIPS? That's not for just people like this couple; that's for everyone. Where is your attack on Shiller? Your site seems to me oddly lopsided in its criticism of specific, media-known financial advisors.

Reply to
Elle

I'm expecting Skip to shut down these directed, non-planning types of posts. I am free to post my own opinions on my own site, and agree or disagree with any public figure. I took your comments to heart, that I need to be careful to provide a link so I'm not taking questions or answers out of context. With that in mind, the rest of my postings on my site are my opinion only. And you are welcome to your opinions, which I do respect, and value. JOE

Reply to
joetaxpayer

I think you're the one who is reading too much into the text. Mr. Markwood did not state that he thought the government is going to fall, he merely asked for a hedge against a falling U.S. dollar: "I... have concerns about the American dollar continuing to lose value. I have been considering moving a portion of my funds into precious metals as a hedge against the dollar."

No, she doesn't. She says, "I agree with you that precious metals look smart right now..."

I hardly think that 20% is a minimized move.

No, she didn't. She says, "You will get the hedge you want while remaining diversified."

Joe acknowledged that and gave the context.

-Will

Reply to
Will Trice

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