(Topic ID: 110193)

Does buying my first house mean the end of pinball?

By eggbert52

6 years ago


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  • Latest reply 6 years ago by rommy
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    There are 230 posts in this topic. You are on page 5 of 5.
    #201 6 years ago
    Quoted from Baiter:

    Using insurance as an investment vehicle usually results in fees eating away gains as compared to low-fee alternatives (e.g., Roth + Term Life). A couple articles by Dave Ramsey and Forbes on the topic:
    http://www.daveramsey.com/article/the-truth-about-life-insurance/
    http://www.forbes.com/sites/financialfinesse/2011/07/19/should-you-use-life-insurance-as-an-investment-3-things-to-consider/

    Not certain lower fee IULs over life of the policy. About 1.5%. And those American funds that he pushes through his slew of paid up non independent advisors are high fee/hidden fee products!

    Dave Ramsey is not independent and is a walking conflict of interest. People will sadly blindly follow everything he says. Save and get out of the debt, the rest is garbage by him

    Read something NOT written by him. Google "Don't invest like Dave Ramsey". Forbes article btw

    Also, if you make too much you can't contribute to a Roth IRA. I put 50ka yr into my Roth IRA alternative. Do you believe the insurance lobby is strong? That benefit never gets taken away

    Term insurance is like renting your house versus owning it. Throw that $$$ away if you like. How do you think insurance companies survive. Term is good to solve a niche need.

    #202 6 years ago
    Quoted from Pinfactory2000:

    +1
    The ONLY people that reccomend these are those that make $$$ off them. I know. I helped pay my way through college by selling insurance!
    They can do OK (and just ok) for you if you CRAM it with cash and you pray, really hard, that tax laws never ever ever ever change.

    You are clueless and have no idea what you are talking about! Who were the fools that bought insurance from a college kid

    Keep jamming money into that 401k and hope they don't change the tax laws, what a joke!

    Or the tax rates when you go to take it out or have to take it out as an RMD. And the double taxation it causes on Social Security. . Then you quickly realize the IRS is your partner in your 401k

    There is Option A, best to educate yourselves to options B and C as well

    GL it's not easy

    #203 6 years ago

    House is definitely expensive and it's very easy to become "house poor" (1st world problems). However, sounds like you are in a good position to me. I'm a young guy, so take my long-term financial advice with a grain of salt, but here is my suggestion:

    - Max out your 401k contribution
    - Build up a house emergency fund (planned & unplanned upkeep: roof, furnace, leaks, etc)
    - Build up 6 months of salary replacement savings
    - Make a savings plan for any renovations/furniture, etc -- it's tempting to do everything at once when you 1st move into a house, like I did
    - Set a modest pinball budget to tide you over until you meet those goals

    #204 6 years ago

    If you can't buy anymore pins once you buy your house than get a cheaper house.

    #205 6 years ago

    You'll have plenty of money for pinball. You'll also have plenty of space. So a word of caution....don't be like me and buy up every pinball coming down the pike since you have the room. I've got like 15 pins now, some still waiting to be shopped, because I bought a bunch of machines at good prices and couldn't stop myself. Now the space is filled up, the wife looks at me with "angry eyes" every time I bring up pinball, and I don't own all the machines I really and truly want. Of course it is an addiction, so I don't really want to sell any either...... Start slow, and try to play a game several times before you buy it. Then add a game at a time, and sell ones you get tired of. Financal management will not be a problem for you, but pinball addiction management could become one!

    #206 6 years ago
    Quoted from Aeolus7:

    House is definitely expensive and it's very easy to become "house poor" (1st world problems). However, sounds like you are in a good position to me. I'm a young guy, so take my long-term financial advice with a grain of salt, but here is my suggestion:
    - Max out your 401k contribution
    - Build up a house emergency fund (planned & unplanned upkeep: roof, furnace, leaks, etc)
    - Build up 6 months of salary replacement savings
    - Make a savings plan for any renovations/furniture, etc -- it's tempting to do everything at once when you 1st move into a house, like I did
    - Set a modest pinball budget to tide you over until you meet those goals

    Good advice from a young guy thanks! You'd be surprised on how much we are on the same page especially on the savings plan for renovations. One thing I should mention which is critical for someone who is busy and isn't a fixer upper type: the house is pretty much move in ready.

    #207 6 years ago
    Quoted from eggbert52:

    Good advice from a young guy thanks! You'd be surprised on how much we are on the same page especially on the savings plan for renovations. One thing I should mention which is critical for someone who is busy and isn't a fixer upper type: the house is pretty much move in ready.

    Good to hear you already have a good plan in place. It's really nothing more than living within your means without going into debt except for the house.

    My kids have grown up under the guidance of "you don't need it if you can't pay cash for it" and I hope it serves them well down the road.

    -1
    #208 6 years ago
    Quoted from iceman44:

    You are clueless and have no idea what you are talking about! Who were the fools that bought insurance from a college kid
    Keep jamming money into that 401k and hope they don't change the tax laws, what a joke!
    Or the tax rates when you go to take it out or have to take it out as an RMD. And the double taxation it causes on Social Security. . Then you quickly realize the IRS is your partner in your 401k
    There is Option A, best to educate yourselves to options B and C as well
    GL it's not easy

    let me guess. You sell insurance.

    You're embarrassing yourself. Read my comments again. I did not say to jam money into a 401k. I said the only way to even begin to make a cash value policy of any sort make any sense is to cram it with as much cash as possible and pray that tax laws don't change (highly likely) that change how those policies are taxed in 10 or 20 years.

    UL/VL et al are not financial instruments reccommended by any serious financial advisor for very good reasons.

    #209 6 years ago
    Quoted from Pinfactory2000:

    I said the only way to even begin to make a cash value policy of any sort make any sense is to cram it with as much cash as possible and pray that tax laws don't change (highly likely) that change how those policies are taxed in 10 or 20 years.

    Totally ignorant, but hey, do whatever you like, I've been a CPA for 29 years, estate planning lawyer for 20 and licensed financial planner for 15 yrs.

    So I know a thing or two about "tax laws" (maybe don't know shit about pinball), and the grandfathering of such changes, if ever enacted.

    I don't "sell" anything, I have a fiduciary duty to do what's in my clients best interest under the 1940 Investment Advisors Act. I "sell" the IUL to myself because I know what I'm doing and don't implement a 401k for my firm

    Like I said, do whatever, its clear you don't have a clue, what are your credentials

    #210 6 years ago

    Keep dancing.

    Can you/do you sell insurance or do you not?

    Is what I said correct or incorrect regarding cramming cash into the policy as the best way to maximize the efficiency of it?

    #211 6 years ago
    Quoted from Pinfactory2000:

    Keep dancing.
    Can you/do you sell insurance or do you not?
    Is what I said correct or incorrect regarding cramming cash into the policy as the best way to maximize the efficiency of it?

    You can't just "cram cash into the policy". Do you have any idea what a "modified endowment contract" is?

    Max cash value, minimum death benefit with a fixed loan rate by contract. Based on age and health rating variables as well.

    Back in 1988 there was tax reform, TAMRA, that set these guidelines because people were "cramming cash" into policies with low death benefits and taking the growth out tax free.

    Guess what, the older policies were "grandfathered". So to say its "highly likely" that tax law will change regarding this issue is wrong, its highly UNLIKELY. More likely is the coming rule changes that will impact IRA/401k/Roth contributions and distributions.

    I don't sell mutual funds because of the hidden fees and inability to do tax harvesting, don't use variable annuities, for the same reasons and the cost of M&E on top of it.

    Pretty simple, low cost "i share" index funds with tactical downside management. Google F Squared. Fully transparent full disclosure fee based.

    Clear it up for you? I hate to bore everybody else here but maybe something will be helpful, it certainly is to all my clients

    #212 6 years ago

    You should get a Hardbody pin to put out by the pool .

    #213 6 years ago

    I thought you had an ability to choose how much you fund the policies beyond the base level that would keep the policy active every month. Maybe that's not true anymore.

    I'm sure you are good at what you do and your clients like you. But any advisor that DOESNT get paid on policies they sell (you still haven't clarified if you ever receive commissions/residuals from an insurance company) would be hard pressed to reccomend such policies due to their limits, restrictions, complexity, high fee structures and limited investment options (I know I know. But some have no real options in some cases).

    Or maybe those that don't get paid by the insurance companies are just dumb.

    #214 6 years ago
    Quoted from Pinfactory2000:

    I thought you had an ability to choose how much you fund the policies beyond the base level to keep it active every month. Maybe that's not true anymore.
    I'm sure you are good at what you do and your clients like you. But any advisor that DOESNT get paid on policies they sell (you still haven't clarified if you ever receive commissions/residuals from an insurance company) would be hard pressed to reccomend such policies due to their limits, restrictions, complexity, limited investment options (no real options in some cases).
    Or maybe everyone that doesn't get paid by the insurance companies are just dumb.

    The way that I do it for myself is to use the Indexed UL, relatively new, compared to the old whole life cash builder. With the indexes you have access to some, not all, of the growth of the S&P 500, Nasdaq, Eurostox, etc., you can lock in gains and rebalance every year.

    I hate Insurance for the sake of buying Insurance, only to cover a short term need (term), this just happens to be a "Roth IRA alternative" that oh by the way has a death benefit.

    So its always about putting in the MAXIMUM amount of cash, for the MINIMUM amount of death benefit under the law, based on age and health ratings and such, avoiding the MEC rules and thus making withdrawals taxable.

    When you do that, you get a long term internal rate of return, net of fees of about 7%. But it is LONG TERM, needs time to work to overcome the cost of insurance.

    Thus, if I can earn 7%, tax free, and have a death benefit that i can use to fund estate taxes, a buy/sell agreement or whatever, its a win win.

    To achieve that, today, I only use Allianz and North American. There are plenty of terrible policies, some great ones.

    But as you pointed out, its complicated and not for everybody. The younger you are the better!

    I NEVER sell term insurance. I do "sell" IUL's to fund a buy/sell agreement (not term) as it builds a sinking fund as well AND I'm using it tomorrow to put into a Life Insurance Trust to pay for estate taxes.

    For people over a $5.34 million dollar estate, each spouse, its a 40% tax rate, so its either pay the IRS or leverage life insurance to help pay the tax.

    Anyhow, I get paid on a fee based level, "assets under management" of .80% annually and get paid on insurance cases like i mention above.

    I also include Wills, Trusts, tax advice and estate planning as part of that fee. No legal fees. Integrating legal, tax and financial in one.

    Everybody should understand the "power of compounding" and avoiding big losses like 2008. If you do, you win! And you have more $$$$ to buy pins. Now I've given myself a headache.

    Take care

    #215 6 years ago
    Quoted from iceman44:

    Not certain lower fee IULs over life of the policy. About 1.5%. And those American funds that he pushes through his slew of paid up non independent advisors are high fee/hidden fee products!
    Dave Ramsey is not independent and is a walking conflict of interest. People will sadly blindly follow everything he says. Save and get out of the debt, the rest is garbage by him
    Read something NOT written by him. Google "Don't invest like Dave Ramsey". Forbes article btw
    Also, if you make too much you can't contribute to a Roth IRA. I put 50ka yr into my Roth IRA alternative. Do you believe the insurance lobby is strong? That benefit never gets taken away
    Term insurance is like renting your house versus owning it. Throw that $$$ away if you like. How do you think insurance companies survive. Term is good to solve a niche need.

    Post edited by pinnyheadhead: Got it.

    #216 6 years ago

    What is the airspeed velocity of an unladen swallow? European, of course.

    #217 6 years ago
    Quoted from swampfire:

    What is the airspeed velocity of an unladen swallow? European, of course.

    It’s a simple question of weight ratios
    A 54-year survey of 26,285 European Swallows captured and released by the Avian Demography Unit of the University of Capetown finds that the average adult European swallow has a wing length of 12.2 cm and a body mass of 20.3 grams.4

    Because wing beat frequency and wing amplitude both scale with body mass,5 and flight kinematic data is available for at least 22 other bird species,6 it should be possible to estimate the frequency (f ) and amplitude (A) of the European Swallow by a comparison with similar species. With those two numbers, it will be possible to estimate airspeed (U).

    In order to maintain airspeed velocity, a swallow needs to beat its wings forty-three times every second, right?
    Actually, wrong. By comparing the European Swallow with bird species of similar body mass, we can estimate that the swallow beats its wings 18 times a second with an amplitude of 18 cm:

    Species Body mass Frequency Amplitude
    Zebra Finch 13 g 27 Hz 11 cm
    European Swallow 20 g ≈ 18 Hz? ≈ 18 cm?
    Downy Woodpecker 27 g 14 Hz 29 cm
    Budgerigar 34 g 14 Hz 15 cm
    Note that even the tiny Zebra Finch flaps its wings no more than 27 times a second while cruising.

    If we ignore body mass and look only at bird species with a similar wingspan, we can estimate an average frequency of 14 beats per second and an amplitude of 23 cm:

    Species Wingspan Frequency Amplitude
    Budgerigar 27 cm 14 Hz 15 cm
    European Swallow ≈ 28–30 cm ≈ 14 Hz? ≈ 23 cm?
    Downy Woodpecker 31 cm 14 Hz 29 cm
    European Starling 35 cm 14 Hz 26 cm
    By averaging all 6 values, we can estimate that an average European Swallow flies at cruising speed with a frequency of roughly 15 beats per second, and an amplitude of roughly 22 cm.

    Skip a bit, Brother
    Last month’s article on The Strouhal Number in Cruising Flight showed how simplified flight waveforms that graph amplitude versus wavelength can be useful for visualizing the Strouhal ratio (fA/U), a dimensionless parameter that tends to fall in the range of 0.2–0.4 during efficient cruising flight.

    For a European Swallow flying with our estimated wingbeat amplitude of 24 cm, the predicted pattern of cruising flight ranges from a Strouhal number (St) of 0.2:

    ... to a less efficient 0.4:

    If the first diagram (St = 0.2) is accurate, then the cruising speed of the European Swallow would be roughly 16 meters per second (15 beats per second * 1.1 meters per beat). If the second diagram (St = 0.4) is accurate, then the cruising speed of the European Swallow would be closer to 8 meters per second (15 beats per second * 0.55 meters per beat).

    If we settle on an intermediate Strouhal value of 0.3:

    We can estimate the airspeed of the European Swallow to be roughly 11 meters per second (15 beats per second * 0.73 meters per beat).

    Three shall be the number thou shalt count
    Airspeed can also be predicted using a published formula. By inverting this midpoint Strouhal ratio of 0.3 (fA/U ≈ 0.3), Graham K. Taylor et al. show that as a rule of thumb, the speed of a flying animal is roughly 3 times frequency times amplitude (U ≈ 3fA).5

    We now need only plug in the numbers:

    U ≈ 3fA
    f ≈ 15 (beats per second)
    A ≈ 0.22 (meters per beat)
    U ≈ 3*15*0.22 ≈ 9.9
    ... to estimate that the airspeed velocity of an unladen European Swallow is 10 meters per second.

    Oh, yeah, I agree with that
    With some further study, it became clear that these estimates are accurate, though perhaps coincidental.

    An actual study of two European Swallows flying in a low-turbulence wind tunnel in Lund, Sweden, shows that swallows flap their wings much slower than my estimate, at only 7–9 beats per second:

    “Compared with other species of similar size, the swallow has quite low wingbeat frequency and relatively long wings.” 7
    The maximum speed the birds could maintain was 13–14 meters per second, and although the Lund study does not discuss cruising flight in particular, the most efficient flapping (7 beats per second) occurred at an airspeed in the range of 8–11 meters per second, with an amplitude of 90–100° (17–19 cm).

    And there was much rejoicing
    Averaging the above numbers and plugging them in to the Strouhal equation for cruising flight (fA/U = 7 beats per second * 0.18 meters per beat / 9.5 meters per second) yields a Strouhal number of roughly 0.13:

    ... indicating a surprisingly efficient flight pattern falling well below the expected range of 0.2–0.4.

    Although a definitive answer would of course require further measurements, published species-wide averages of wing length and body mass, initial Strouhal estimates based on those averages and cross-species comparisons, the Lund wind tunnel study of birds flying at a range of speeds, and revised Strouhal numbers based on that study all lead me to estimate that the average cruising airspeed velocity of an unladen European Swallow is roughly 11 meters per second, or 24 miles an hour.

    #218 6 years ago

    ummm.... finish the basement to make a nice game room. Buy some Em and SS games, learn to fix/adjust them. Enjoy. (No, I did not read the past 2+ pages of this thread when it got all lame.)

    #219 6 years ago

    A basement in florida is called a well

    #220 6 years ago
    Quoted from Noahs_Arcade:

    A basement in florida is called a well

    Thanks...I was going to point that out. You know I've been thinking. Rather than worry about the next machine I'm going to buy once everything is established financially:

    1. Emergency fund back to 8 months (January 15th goal)
    2. 401K at least at 6% with company match at 3%
    3. Roth IRA established
    4. Emergency repairs savings account to be funded at a minimum rate of $200 per month
    4. Acura paid off at $16K at 1.99% (Some may disagree with this and I'm open to the advice. However, not having the $405 car payment would make the mortgage as the only large expense.

    I think I will donate to three charities of my choice. I'm not going to go crazy but I think given the circumstances and having a good job, $500 to $1,000 is not out of the question. I've already given $100 a year to the ASPCA but thinking about Wounded Warriors, etc.

    Let me know your thoughts on good charities.

    #221 6 years ago
    Quoted from eggbert52:

    I've already given $100 a year to the ASPCA but thinking about Wounded Warriors, etc.

    Congrats Egg, good for you, you have earned my total respect with the "wounded warriors" donation

    Do 401k up to company match only and then Roth/alternatives

    #222 6 years ago
    Quoted from Noahs_Arcade:

    A basement in florida is called a well

    Yet another reason why Pirates of the Caribbean is better over here...
    Let the boat- mmm................DrrrrOOOOop!

    07_history_drop.jpg

    #223 6 years ago

    you know what's even better than having a $400 car payment? Only buying a car you can buy with cash and never having car payments. ;P I had car payments once...once. Never again. If I can't pay cash for something I don't buy it. (except the house). I found that not paying interest on anything, really makes your money go a lot farther. Plus if you fall on hard times, it takes very little to stay afloat and you don't lose everything you have. A part time job at mc Shittles, would be enough to make the little payments I have in life if worst came to worse.

    #224 6 years ago
    Quoted from CaptainNeo:

    Only buying a car you can buy with cash and never having car payments. ;P I had car payments once...once. Never again.

    I agree. I probably didn't need to trade in my 2007 Acura TSX because it only had like 60,000 miles on it. However, my current 2013 Acura TSX which I bought in May, 2013 has under 11,000 miles on it. I think you are right on two fronts.

    1. Paying 1.99% may be a low interest rate. However, you are still paying money you don't need to pay.
    2. NOT having a car payment gives you greater flexibility when trying to buy something like...oh let's say...a HOUSE!

    #225 6 years ago

    Good Job!

    Maxing out all available Retirement accounts is very important.
    If your employer matches your 401K and you don't max it out, you are loosing money

    Only thing I will add, is that 6-8mos of salary saved is great, but you can drain that quick in an emergency - if you can save a years salary in a liquid account, you will have much more security.

    Accelerate your mortgage payments and pay off additional principal every month.
    If you have a 30 year mortgage, you don't want to still be paying it in your 70's

    Quoted from eggbert52:

    Thanks...I was going to point that out. You know I've been thinking. Rather than worry about the next machine I'm going to buy once everything is established financially:
    1. Emergency fund back to 8 months (January 15th goal)
    2. 401K at least at 6% with company match at 3%
    3. Roth IRA established
    4. Emergency repairs savings account to be funded at a minimum rate of $200 per month
    4. Acura paid off at $16K at 1.99% (Some may disagree with this and I'm open to the advice. However, not having the $405 car payment would make the mortgage as the only large expense.
    I think I will donate to three charities of my choice. I'm not going to go crazy but I think given the circumstances and having a good job, $500 to $1,000 is not out of the question. I've already given $100 a year to the ASPCA but thinking about Wounded Warriors, etc.
    Let me know your thoughts on good charities.

    #226 6 years ago

    D.I.N.K here

    (Dual Income No Kids)

    House + Pinballs works

    #227 6 years ago
    Quoted from CaptainNeo:

    you know what's even better than having a $400 car payment? Only buying a car you can buy with cash and never having car payments. ;P I had car payments once...once. Never again.

    Same here. The only vehicle I ever made payments on was the one I got in high school. Every vehicle since then, I bought with cash. $3500 is the most I've ever spent on a car/truck (often a lot less) and they typically last at least 5 years. Then when I sell them, I still get a decent chunk of my money back even if they are going for parts. A lot of my friends are making $400 payments and wonder how I can afford pinball machines.

    #228 6 years ago

    I am middle class. I have some decent retirement investments. I love pinball so I have pinball machines. Pinball machines can sell if needed. I convinced myself that they are like investments. I may profit, I may loose, or I might break even. I find that planning is important but over planning is stressful for me. My wife and I have no kids and don't have the $3500 monthly disposable income that you have between the 2 of us. I do feel that budgeting fun into my life is very important (vacations also) as I could drop dead tomorrow or get creamed on the highway at any time. Life is short and I have to enjoy it as much as I can. BTW I too support the ASPCA.

    #229 6 years ago
    Quoted from Strummy:

    I am middle class. I have some decent retirement investments.

    I am no class, and most of my money is tied up in pinball machines. Couldn't be happier!
    Worrying about the future is not for me.

    #230 6 years ago

    Don't ever give money to some random but popular and well known world "charity". IMHO you should help your family out - even extended family before you try giving money away. But if you must give away money, go local. People in your area are in need. Local shelters for battered women and food banks are a good place to start.

    There are 230 posts in this topic. You are on page 5 of 5.

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