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Thread: Should I Pull Money out of My Home? Reply to Thread
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Topic Review (Newest First)
06-07-2020 11:17 AM
Hilltopper Mogli, knowing some of your background , and being of like age and gender , I am going to say that your needs and those of your daughter should take into account the support you get , ex and the stability of your eldest son and his family . Removing oneself from the state entirely could remove you and daughter from being accessible to be supported by your family . I would suggest you are experienced enough to time the market ( manage your money) and select a good property . I would rally the family and have discussion about locating to a slightly larger bit of land, in a secure or readily able to secure area that can accommodate the family and family business where you can give and receive mutual support . Working together maybe you can circumvent a lot of those issues your state is most at risk for ? And those your family is most at risk for as well.
06-03-2020 06:54 PM
SheepDog68 I think CA is in for some very hard/bad times for many reasons some obvious and some not. I encouraged my brother to get his family out of there years ago and heís been in TN now for quite a while. My mother in law is still there officially, but is here in the mountains with us right now.

I expect CA to be further segregated into gated communities of the haves and many bad areas of the have nots. South Africa comes to mind as an example.

This Kung Flu should have given you some insight into what states you should look at. Some governors and state governments have shown rather poorly.

My governor missed a few licks, but probably did pretty good considering. I chose a market town that is also the county seat. Itís very rural, but Iím 10 minutes from the hospital and shopping on a 30 acre farm.

Jobs can be hard to come by, but we started our own company several years ago so now we struggle to find trained employees. Many folks here have moved out of state for work, but that trend may be changing.

I can recommend searching for a situation similar where you still have medical and some shopping, but are also rural.

I donít know your situation, but if what I believe is likely headed toward CA actually happens I can not recommend you stay there!

SD
06-03-2020 05:20 PM
sierra skier I saw the way California was going back in the 70's also and made a move to the Eastern Sierra where I spent 41 years skiing , working and raising a family in a lovely area of the forsaken state. DW and I had spoken about moving to the pacific northwest, but not Oregon or Washington because of their progressive politics. Actually, Mogli did some searching in our area around the same time we were looking about 7 years ago, we made the move and haven't looked back besides family visits. Now that mom has passed that will diminish also.

I shared this article on the Mogli thread and will share it here, Coeur d'Alene is less than an hour south of us. We live in a wonderful area.

https://cdapress.com/news/2020/jun/0...oeur-dalene-5/
06-03-2020 03:49 PM
evilwhitey I escaped CA in 2000 after almost 20 years of living there and have never looked back. Parts are nice to visit, but past that, no thanks.
06-03-2020 03:35 PM
IceFire I would also get out of CA. I know the area you're in...I grew up to the east of where you're at, just over the mountains. I saw the direction CA was heading back in the 70's, and joined the Army to GTH out. I only go back to visit my mother, and that's only sporadically. CA has turned into a cesspool. After bouncing around the world, we settled in AZ, and have no plans to leave.

Make your "escape plan." Research areas that you are interested in moving to, and get the information BEFORE you make your move. You can also contact realtors in those areas and let them know that you are considering moving to the area, and what type of property you are looking for (rural, agricultural, etc.) They are great resources for finding out about local conditions, schools, medical facilities, etc. You can also do quite a bit of online "scouting" of properties. That's how we found our current property. You can do your research for months while pawing down/off the mortgage on your current place.

Once you have all your research done, sell up and move out! You will already have a realtor you've been "working" with, will have scouted potential properties for you, so the process should be faster/smoother than if you were coming into it "raw".

Good luck.
06-03-2020 03:09 PM
ClovisMan Here's something to ponder. You could probably out-right sell your home and come here to Texas and get something comparable to what you have for a lot less. You would then have your extra cash on-hand with no mortgage. Guess what else? If you need a job, we have them. Everything is opened or opening here already....
06-03-2020 02:59 PM
Rural Buckeye Guy Ditto. Buy something somewhere that you actually want to be....live your goal.
06-03-2020 01:49 AM
Nomad, 2nd Not collapsing.

Still advise sell and move, do not borrow.
06-02-2020 11:06 PM
Mogli BTW, Thank you for all the great advice. I particularly liked the ideas around looking for opportunities rather than reacting in fear and finding the positive in the negative. Really love those ideas.
06-02-2020 11:02 PM
Mogli So, does everyone still think my gloomy forecast for America is too dark? Or have we had a paradigm shift?

On a personal note, some of those riots are 30 miles from me. Our county now has a curfew which the protesters and rioters are ignoring. A lot of violence and vandalism. Freeways blocked. The largest city in my area, Santa Rosa, Ca, put out a call for help from ALL local agencies. In county and out. I’m almost positive my handicapped daughter will not be going back to her day program. She has asthma and wearing a mask isn’t healthy for her.

I think American in collapse and revolution. I think many of our representatives are encouraging it. Am I still too dark? Seriously wondering.

Still on the fence about the cash out but am getting things prepared because I’ll most likely do it. If people start starving my productive property will be confiscated. They didn’t make all those executive orders for nothing.
05-27-2020 04:27 PM
Stinky You still have a lot to consider.
California's problems are not just going to go away. I think tax hikes are on the way due to the crashed economy, and likely wherever you go.
The homeless problem is not going to go away. How does that impact your security, property values?
Your daughter has medical issues, you are getting older. What are your long term plans for both of your medical needs?
Just moving will take planning, time and money for any move. I am still recovering from my move and it has been 6months. Just ball park I'm guessing 15k in extra expenses for the move and getting settled.

Very important if you move to rural property; know your water rights and what they really mean! It would really suck to have underground rights and then need to pay 20k to punch a well so you could use them. Or have nice looking property with class C rights and only get water once ever 3'Rd or 4th yr.
Water is not something most Californian's think about when moving. Yrs ago I knew a person who got caught by the class C trap.
That land is still sagebrush.
05-27-2020 05:07 AM
surfcast
Quote:
Originally Posted by Mathetes View Post
Do not rush to judge a new situation stay calm and think things thru again and again, America has been they these kind of situations before and declinism appears every time we go through a crisis yet we made it past every time.
If you are almost done with the debt finish it off and then all you have is some taxes that can be put off a while if needed, but most of all you have a place that you own, things will not deteriorate fast save your money and if they are getting worse you can still put a downpayment and buy a BOL from a distressed buyer, plenty of homes with acreage all over this vast country.
Just remember if you had sold in haste during the Great Depression then 10 years later that asset would be higher than ever, real estate is a long term hold, treat it as such and you will be safer in the long run, including having a debt free home to give to your children, the greatest gift of all for them.


Sent from my iPhone using Tapatalk
This is good advice above, if you want to make your self resistant,pay of the mortgage. Before you create a new one.
05-26-2020 09:18 PM
GrizzlyetteAdams I, too, urge you to get out of Dodge ASAP. Also consider that the longer you wait, the more money you will lose to devaluation.

If you don't move now, you may find that any other measures taken would be like rearranging the deck chairs on the Titanic...
05-26-2020 08:50 PM
txprep
Quote:
Originally Posted by rriley View Post
There was a collapse in March, why didn't you buy stock then or are you expecting a more extreme collapse? If so, at what level in the S&P will you be a buyer and what stocks will you buy?
I did buy some. I thought there would be a bigger drop. I do think the worst is yet to come, but Ill be completely happy if things continue to get better from here.
05-26-2020 02:35 PM
francessanne no. with the economy being tenuous, the last thing *I* would do is to put anything at risk that you might not recover from
05-26-2020 10:56 AM
ncbill
Quote:
Originally Posted by Mogli View Post
$48k. I can pay it off in about 1 1/2 -2 years and yes, that is something Iím considering.
I'm a big fan of paying off the mortgage once you get to where you want to be, especially for those retiring.

I just sold a late relative's house...unexpectedly laid off around age 60, had to cash in their pension plan to make it to SS at age 62, which was the only income they had in retirement.

SS retirement income was ~$1,800/month versus a mortgage plus HELOC payment of ~$1,200/month.

Before paying for utilities (electric/water/gas/cable/phone/internet) insurance on home/auto, property taxes, & luxuries like food.

As you can see they had a very lean retirement.
05-26-2020 10:19 AM
rriley
Quote:
Originally Posted by txprep View Post

I took out a mortgage on it of about 350K about a month ago. Im sitting on about 1 million in cash. Fortunes are made when things collapse.
There was a collapse in March, why didn't you buy stock then or are you expecting a more extreme collapse? If so, at what level in the S&P will you be a buyer and what stocks will you buy?
05-26-2020 08:30 AM
txprep
Quote:
Originally Posted by Mogli View Post
Hi Everyone, I’m have a dilemma and would value your insights. My goal has always been to be debt free and I’m almost there having paid off debt with the exception of a tiny mortgage on my home.

I feel like we’ve had a paradigm shift with the national debt, continues QE to infinity, unimaginable unemployment of which many jobs are not coming back, continued assault on small business while promoting large corporations, and the like. I believe we likely are headed for a Venezuela type collapse. I’m worried about a worst case scenario situation.

I’m located in the SF North Bay Area. 90 miles from SF but still with a tremendous Collectivist mindset.

I’m pondering pulling money out so if things continue to degenerate I have a way out. This money would be earmarked for a BOL. I believe real estate values may crash and pulling money out later may be very difficult.

The new loan would be 1% lower than my current interest rate. So that helps especially if we get into hyperinflation later down the road. Or lending may freeze up.

I really see communism taking firm hold in California. The 2nd Amendment is under extreme attack and I believe confiscation is supported by the majority. There’s talk of forced vaccinations and other clearly Authoritarian measures.

I feel like I need to secure a way out and if our situation continues to degenerate at these accelerated rates I may lose this opportunity. I understand this is paranoid thinking but I have a seriously handicapped daughter and I need to be looking at this with my eyes wide open. I can’t afford rose colored glasses with this.

Finally, the division and hostility has increased to a critical level. I see posts on Facebook daily calling for conservatives, or anyone protesting this level of personal liberty assaults, to be gotten rid of. Truly frightening. I’ll leave you this video which clearly states what I’m talking about. Notice the audience doesn’t laugh as if she’s joking or go, “Huh???”, as if they’re shocked. This narrative is something they’re used to hearing. Let that sink in. It’s ‘normal’ discourse to this audience! Acceptable!!!

So my question is, what are the pros and cons to pulling money out of my house? Should I do it? Would you do it?


https://www.youtube.com/watch?v=sVEj...Sw5MInhrPrmWXA
If I did, I wouldnt ever do it out of fear. I would only do it seeking new opportunities. The great thing about a home equity loan, or a cash out refinance, is that you can always put the money back into the mortgage at little cost.

If you arent sitting on cash, I think it is a reasonable time to have cash ready to take advantage of upcoming opportunities.

The caveat is that if you are the type to spend the money on toys or other depreciating items, that is a bad idea. The reason why homes are so useful for most people is that they are incompetent at saving. A home is a way to save a little money that would otherwise be wasted on junk. For most people pulling money out of a home or retirement is a bad idea.

My land was completely paid off. It is worth about 650K, I took out a mortgage on it of about 350K about a month ago. Im sitting on about 1 million in cash. Fortunes are made when things collapse. I wanted to make sure I had as much cash as possible to take advantage of crashing asset prices and to weather the upcoming economic storm.

Im still (relatively) young and so am more aggressive with my investing. A lot will depend on your risk tolerance. My net worth is about 8 million, about 5 million is tied in my business, so it could evaporate in the next year. My goal is to have at least 10 million in liquid assets (stocks, cash, real estate) passively generating about 1 million/year in income in the next 10 years. To get there, I cant just hold cash in an interest account.
05-25-2020 08:17 PM
Mogli
Quote:
Originally Posted by woowoo2 View Post
That is the way I am going.

Currently $17K left on the house, and all three cars are paid for.
New roof went on last week, paid cash.
Congratulations! Wonderful accomplishment!
05-25-2020 08:16 PM
Mogli
Quote:
Originally Posted by DoubleA View Post
You need a Plan. Either stay or sell and move. I was a lifelong Californian, then retired and moved to Florida. Best decision I ever made.

IF you decide to sell, decide to either do so immediately or take your time. Take the proceeds, and pay in full for a new home elsewhere. Settle for less house, with $$ leftover to provide for a few months living expenses. Your daughter’s need’s complicate your planning, but not insurmountably so. Perhaps, she would thrive in a different environment?

If you decide to stay, then either save $$ like your life depends on it, or accelerate paying off your mortgage. Your idea to pull $ out has merit, but also increases your monthly payment, which is not something I personally would consider at this point. YMMV.

Only you can determine what is best for you and your daughter. Decide carefully, but don’t be afraid to move just because of fear of the unknown. Is your daughter old enough or able to participate in the planning? If so, then might giving her the opportunity to be part of the process now reduce stress later?

Right now, crystal balls everywhere are muddy, however, California’s problems are not going to subside even if CV disappears overnight and the economy starts booming. Personally, I think the rest of this year is going to get rocky, especially in CA due to the budget shortfall and other issues already mentioned in this thread. Next year is a crap shoot- could be good or bad, your guess is as good as anyone’s. In the long term, I believe CA is a lost cause.

Good luck, plan carefully, then execute aggressively, and expect challenges- which can also be converted to opportunities. . Be prepared to deal with the FUD, which accompanies any change.

ETA: One other thing, and perhaps the primary consideration: What is in your daughter’s Long Term best interest? Will California be a safe place for her? Do her health care needs dictate you remain in place?

And, please keep us posted as to your decision.


Sent from my iPad using Tapatalk Pro
I think California is a lost cause too. In fact I think we’re flirting with a Venezuela type collapse. Maybe not this year but I believe it’s inevitable.

I love that bolded paragraph. Expect challenges and work to convert them to opportunity. This is just a great idea. I remember, and not too long ago, that I thought things going bad was abnormal. Now I know they’re just a part of being alive and that knowledge and acceptance took most of the pain out of hard life lessons. Still, I really don’t want to experience Venezuela without a solid ‘get out of town’ plan.


Thank you and to everyone for all this valuable input. You all gave me a lot to consider. While I’m still in flux I’ve temporarily taken the refinance idea off the table. Should the deterioration accelerate I will revisit that idea and this thread.
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