Renting Versus Owning Your Home
In my last post, “How Much is Your Home Really Costing You,” I suggested that, for some people, owning a home may cost so much that they should consider selling it to either buy a less costly home or rent a home. I got a question about what factors should be considered when evaluating whether renting a home is cheaper than owning.
How Much is Your Home Really Costing You?
I discussed in my last post, “The First Rule of Real Estate Investing,” that your personal residence is not an investment. Your home should be considered a consumer item just like your car, your washer & dryer, or anything else you buy for personal use. The reason I state this is because of all the operating expenses required in owning a home. So before moving on to real estate investing I thought it important to provide some thoughts on how the cost of your personal residence can impact your retirement planning and your retirement income.
The First Rule of Real Estate Investing
Most Americans have thought of their personal residence as an investment. And, despite the housing crash that resulted from the recent housing bubble, many people still think of their home as an investment. The first rule of real estate investing is: your home is not an investment.
The 4 Percent Rule
Before discussing real estate investments or retirement portfolio income withdrawal strategies, I need to go over the 4% rule. I have briefly mentioned the 4% rule in previous posts, but in future posts this rule will be central to many topics. It is very important to understand this simple concept.
Should I Invest in Gold?
The last several blog posts have been about ideas and concepts regarding how to intelligently and simply invest in the financial markets. I thought I would take a break from talking about the financial markets and spend some time discussing alternative investments (i.e., besides stock and fixed income investments). One question I have heard a lot lately is, “Should I invest in gold?” In this post I will give my thoughts on precious metals.
Equity Income Investing
An important part of an equity’s return is the annual income it provides. However, in my experience when talking to investors, most people only pay attention to an equity investment’s potential capital gains and ignore the investment’s income. In this post I will provide some historical information and my own opinion why I think this is a mistake.
Tactical Versus Strategic Investing
I got an inquiry about my last three blog posts, the three important investment concepts, suggesting that these are market timing techniques. I disagree with this characterization. These 3 investing concepts are just important things to keep in mind while you are investing. But it is possible these investing concepts may cause you to do what I call tactical investing. In this post I thought it might be helpful to clarify the difference between tactical investing and strategic investing.
Important Investment Concepts, Part III
This blog post is the third and final installment about what I feel are the most important investment concepts that all stock investors should be aware of. Today’s important investment concept is, when investing in stocks, always pay attention to valuations. This post will discuss the importance of knowing market valuations on a broader level and how valuations impact long term portfolio returns.
Important Investment Concepts, Part II
My last blog post, Important Investment Concepts, Part I, talks about an important investment concept that is intuitively obvious, that is to avoid large investment losses. This investment concept is most applicable to people who have accumulated a large nest egg and are nearing their planned retirement date. This blog post will discuss another important investment concept that is less intuitive and is applicable to investors of all ages. The second important investment concept is simply “Do the opposite of what everyone else does.”
Important investment Concepts, Part I
There are several important investment concepts that you should be aware of that will increase your chances of reaching your retirement planning goals. In this post I will discuss a concept that further illustrates why managing your investment risk is extremely important. This concept is “Big investment losses do more damage than big investment gains do good.”