401k and other retirement plans: have you raided yours yet?

Started by CountDeMoney, January 16, 2013, 11:22:51 AM

Previous topic - Next topic

Have you raided your retirement accounts?

Yes, I've had to in times of financial peril
4 (11.4%)
No, never had to touch them
22 (62.9%)
What retirement accounts?  I work paycheck to paycheck, I have no such luxury
6 (17.1%)
Ha! I'm a public employee, and therefore lucky enough to have a pension while still hating on unions, because I'm a GOP dickhead
3 (8.6%)

Total Members Voted: 35

Barrister

Quote from: Malthus on January 25, 2013, 02:22:10 PM
Quote from: Valmy on January 25, 2013, 02:15:01 PM
Quote from: Malthus on January 25, 2013, 02:05:20 PM
I have no idea why the relatively simple notion that businesses carry risks and this is a business with more risk than most retirees who are looking at it as being relatively safe know about, as I've seen myself from frantic requests for legal advice should cause such huffing. Naturally, lawyers are going to have a better notion of the downsides of such a business than non-lawyers - it is, after all, our trade to deal with such downsides.

Anyway I did not mean to bring up any bad associations there Malthus I was just using it as an example of what some people have been forced to do with money being less able to make money right now.

Personally, my retirement plan is to become a Walmart greeter.  ;)

I'm going to open a defence shop.  I heard one defence lawyer ask another if he knew anyone who would want to rent an office from him - $600 a month.  I could easily cover the rent and then some and only have to work part-time.
Posts here are my own private opinions.  I do not speak for my employer.

Admiral Yi

Quote from: Valmy on January 25, 2013, 02:15:01 PM
Anyway I did not mean to bring up any bad associations there Malthus I was just using it as an example of what some people have been forced to do with money being less able to make money right now.

This is one of the biggest downsides to the Fed's easy money policy.

The Brain

Quote from: Barrister on January 25, 2013, 02:25:22 PM
Quote from: Malthus on January 25, 2013, 02:22:10 PM
Quote from: Valmy on January 25, 2013, 02:15:01 PM
Quote from: Malthus on January 25, 2013, 02:05:20 PM
I have no idea why the relatively simple notion that businesses carry risks and this is a business with more risk than most retirees who are looking at it as being relatively safe know about, as I've seen myself from frantic requests for legal advice should cause such huffing. Naturally, lawyers are going to have a better notion of the downsides of such a business than non-lawyers - it is, after all, our trade to deal with such downsides.

Anyway I did not mean to bring up any bad associations there Malthus I was just using it as an example of what some people have been forced to do with money being less able to make money right now.

Personally, my retirement plan is to become a Walmart greeter.  ;)

I'm going to open a defence shop.  I heard one defence lawyer ask another if he knew anyone who would want to rent an office from him - $600 a month.  I could easily cover the rent and then some and only have to work part-time.

What's wrong with your car?
Women want me. Men want to be with me.

merithyn

Quote from: Barrister on January 25, 2013, 02:23:38 PM
Maybe Meri has a perfect idea of how much work being a landlord can be.  I can't read her mind of course.  But I have my doubts.

Of course you do.
Yesterday, upon the stair,
I met a man who wasn't there
He wasn't there again today
I wish, I wish he'd go away...

The Brain

Women want me. Men want to be with me.

Malthus

Quote from: Barrister on January 25, 2013, 02:25:22 PM
I'm going to open a defence shop.  I heard one defence lawyer ask another if he knew anyone who would want to rent an office from him - $600 a month.  I could easily cover the rent and then some and only have to work part-time.

Heh I bet it would be odd to be working the other side of the fence.  :D
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane—Marcus Aurelius

Phillip V

How much do property management companies charge to handle the landlord stuff?

merithyn

Quote from: Phillip V on January 25, 2013, 02:58:33 PM
How much do property management companies charge to handle the landlord stuff?

Depends on where you live. Where I live, it's around 8-10% of the rent collected. So, if you charge $1000/month for rent, you pay them $80-100/month. If your mortgage is $750, that's a good chunk of your income for that property.
Yesterday, upon the stair,
I met a man who wasn't there
He wasn't there again today
I wish, I wish he'd go away...

The Minsky Moment

Quote from: Malthus on January 25, 2013, 02:05:20 PM
I have no idea why the relatively simple notion that businesses carry risks and this is a business with more risk than most retirees who are looking at it as being relatively safe know about, as I've seen myself from frantic requests for legal advice should cause such huffing. Naturally, lawyers are going to have a better notion of the downsides of such a business than non-lawyers - it is, after all, our trade to deal with such downsides.

Agreed.
A regular person could run a landlording business and chances are nothing will ever go seriously wrong.  But there still is that 5 percent chance that something could go horribly wrong.  Not so much of a problem if you are a big property company or a REIT that can spread that risk over lots of properties.  Bigger problem if you are small potatoes and only have a few.
The question is to what extent does the regular Joe accurately discount or somehow insure against the catastrophic risk?
The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
--Joan Robinson

Admiral Yi

What, pray tell, are the catastrophic risks of rental property ownership? :huh:

Malthus

Quote from: Admiral Yi on January 25, 2013, 04:22:40 PM
What, pray tell, are the catastrophic risks of rental property ownership? :huh:

Well, to give a specific example I've seen in Real Life(tm) ... renter in multi-unit rental property turns out to have previously undisclosed mental illness (he was fine as long as he took his meds - landlord never noticed anything - but hates taking them); other renters all move out because living next to a mental patient isn't optimal (suffice it to say he never did anything actually criminal, but just very upsetting).

Turns out in Ontario it is very, very difficult to remove a tenant suffering from mental illness. Particularly if his parents regularly pay his rent.

Landlord ends up stuck with mostly empty building, containing 1 apparently immovable lunatic. [Solved the problem in the usual way - i.e., converting rental property into personal]
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane—Marcus Aurelius

garbon

My father had his house rental burnt to the ground.  Though that actually ended up better as with no house, no renter. :)
"I've never been quite sure what the point of a eunuch is, if truth be told. It seems to me they're only men with the useful bits cut off."
I drank because I wanted to drown my sorrows, but now the damned things have learned to swim.

merithyn

Quote from: Malthus on January 25, 2013, 04:34:21 PM

Well, to give a specific example I've seen in Real Life(tm) ... renter in multi-unit rental property turns out to have previously undisclosed mental illness (he was fine as long as he took his meds - landlord never noticed anything - but hates taking them); other renters all move out because living next to a mental patient isn't optimal (suffice it to say he never did anything actually criminal, but just very upsetting).

Turns out in Ontario it is very, very difficult to remove a tenant suffering from mental illness. Particularly if his parents regularly pay his rent.

Landlord ends up stuck with mostly empty building, containing 1 apparently immovable lunatic. [Solved the problem in the usual way - i.e., converting rental property into personal]

And if you only purchase/rent out single-family homes?
Yesterday, upon the stair,
I met a man who wasn't there
He wasn't there again today
I wish, I wish he'd go away...

Barrister

Quote from: merithyn on January 25, 2013, 03:17:10 PM
Quote from: Phillip V on January 25, 2013, 02:58:33 PM
How much do property management companies charge to handle the landlord stuff?

Depends on where you live. Where I live, it's around 8-10% of the rent collected. So, if you charge $1000/month for rent, you pay them $80-100/month. If your mortgage is $750, that's a good chunk of your income for that property.

If you have that kind of mortgage on your rental property what you have is a highly leveraged investment.

Would you borrow $100,000 from the bank and invest it in the stock market?  If not, why would you do it with a rental property.

With a $750 mortgage and $1000 rent you're in a very thin edge.  If the water heater goes, there goes your profit for several months.  If you can't find a tenant for a month, there goes your profit for several months.
Posts here are my own private opinions.  I do not speak for my employer.

Barrister

Quote from: merithyn on January 25, 2013, 04:42:08 PM
Quote from: Malthus on January 25, 2013, 04:34:21 PM

Well, to give a specific example I've seen in Real Life(tm) ... renter in multi-unit rental property turns out to have previously undisclosed mental illness (he was fine as long as he took his meds - landlord never noticed anything - but hates taking them); other renters all move out because living next to a mental patient isn't optimal (suffice it to say he never did anything actually criminal, but just very upsetting).

Turns out in Ontario it is very, very difficult to remove a tenant suffering from mental illness. Particularly if his parents regularly pay his rent.

Landlord ends up stuck with mostly empty building, containing 1 apparently immovable lunatic. [Solved the problem in the usual way - i.e., converting rental property into personal]

And if you only purchase/rent out single-family homes?

Well if you want a malthusian nightmare scenario...

Your single family home gets rented out.  Six months later the police bust down the front door to discover a grow up (substitute meth lab if you'd like).  The risk of mold means you have to rip out all of the drywall, and now you have to disclose it as a former grow up when you try to rent it.
Posts here are my own private opinions.  I do not speak for my employer.