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Bakari
biodieselhau...
Male
Oakland, CA



 
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You are currently viewing archive for January 2008
Posted By Bakari

It's a part of the American Dream.
Instead of throwing away money on rent every month, you can buy your own home, giving you not only a place to live rent free, but a sound financial investment at the same time.

One small problem: the number's don't add up.
(Check my numbers: http://www.bankrate.com/brm/mortgage-calculator  http://www.dinkytown.net/java/CompoundSavings.html  http://www.hsfcuonline.org/cw2.1/calcs/Appreciation/calc_appreciation.asp )

First and foremost, there is the idea that a home is an investment due to appreciation.
The logical flaw in that idea is simple, and doesn't depend on appreciation or rental rates.

Say you buy a house at a certain price, and the value goes up 500%.  What can you do with that "value"?

If you want to live in your house, the best you can do with it is use it as collateral for a loan.
Great... now you can go much deeper in debt all at once than you ever could before.

If you sell the house, now you need to live somewhere else.
If your house just went up 500%, that means every house in your neighborhood just went up 500%.
What ever you made in profit by selling, it will cost you just as much to buy something else of equal quality.
Minus what you lose to agents, banks, and taxes for the transaction.

So in order to ever make use of appreciation, you must either move to a much worse neighborhood, move to a much smaller home, or move to a less desirable location.
So: IF you have kids who will be moving out of the home in 10 years, or you plan to retire somewhere cheaper like Arizona or Florida, only then might a house which you live in be considered an investment.
(Buying a house to rent out to others is another story, since you can sell it anytime)

If you want to stay in your home, you can never cash out, and any appreciation is useless.

But at least you are saving on rent... right?

 

<entire blog at MySpace>


 
Posted By Bakari

I have been failing to fulfill my responsibility to provide my non-nonsensical thoughts to my 4 or so readers and the 10 anonymous people who for some reason refuse to let me know who they are.
This is primarily because I haven't had time (from work, spending time with my wife, and video games).
When I have posted, its been the sucky unoriginal kind where I just summarize a news story or post a link I found interesting.
Unfortunately, this is going to be another of those.

On the plus side, I have 5 original ideas lined up, which I am sure I will get to relatively soon. The subjects are written down so I won't forget, and the content has been enhanced and refined by countless raving conversations with people in the real world.

In the meantime...

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Virgin Airlines has decided to put 100% of its profits over the next 10 years into developing a non-food crop based renewable bio-fuel to replace petroleum based jet-fuel.
You should avoid flying altogether: although planes are the cause of a relatively small percentage of GHG emissions, this is largely because of the sheer volume of driving we do. Takes a lot of energy just to keep something that weighs 485 tons in the air, never mind traveling at hundreds of miles per hour.  Not that driving to NY is much better (its actually slightly worse if you make the drive solo).  If you have to travel long distance, its best to take the train.
But we all know we're gonna fly at least occasionally.
I think Virgin has earned our business.  Plus, their is innuendo in the brand, which is another plus.
http://www.motherjones.com/washington_dispatch/2008/01/virgin-airlines-pond-scum-biofuel-global-warming.html
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A bill has just passed congress, and is expected to pass the senate soon, which focuses on stopping domestic terrorism (that is, acts done by US citizens and permanent residents) not only before they happen, but before they are even planned. It goes beyond conspiracy to commit a crime to simply holding an ideology which may tend to lead eventually to a crime. While that is not an arrestable offense, it sets up a government agency tasked with tracking and surveillance on individuals which have undergone or are undergoing " 'violent radicalization' [which] means the process of adopting or promoting an extremist belief system for the purpose of facilitating ideologically based violence to advance political, religious, or social change."
Look carefully at the syntax of that sentence (a quote from the bill).

 

It is not based on an actual attempt, plan, or even necessarily even a specific thought of violence, but just having an "extremist belief system" which facilitates violence.
It explicitly includes political or social change. There is no definition of what constitutes "extreme".
Protests have at times included breaking windows, flipping over unoccupied cars, and resisting arrest, all of which can be considered violence.
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