Comments on: My close journey to riches in high-tech stocks and options http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/ A site to share my tips, tools, and humble thoughts on the journey to wealth Sun, 02 Oct 2011 19:26:45 +0000 hourly 1 http://wordpress.org/?v=abc By: Frugal http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/comment-page-1/#comment-1427 Frugal Wed, 27 Sep 2006 05:44:48 +0000 http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/#comment-1427 Novice, I will move your comment and my reply after a week to <a href="http://www.1stmillionat33.com/2006/08/payment-shocks-from-option-arm-and-interest-only-arm/" rel="nofollow">Payment Shocks from Option ARM and Interest-only ARM</a>. My personal opinion is that interest rates won't be around this low rate in another 20 years (I could be wrong though). I think a better deal is to lock into a 30 or 15 year fixed mortgage. If you ever go with ARM, I think MTA should be the best index, especially when interest rates are going up because MTA is behind the curve. However, Fed will be lowering interest rate early next year. You will need to see how it unfolds to decide the best index. Locking into a fixed rate is the similar to locking your inflation rate. Inflation rate has been low in recent decade due to globalization and immigration, and I don't think it will be low going forward. When inflation rate goes up, bond yield goes up, and then all mortgage rates go up. At the current rates, I will definitely not go with ARM. Novice, I will move your comment and my reply after a week to
Payment Shocks from Option ARM and Interest-only ARM.

My personal opinion is that interest rates won’t be around this low rate in another 20 years (I could be wrong though). I think a better deal is to lock into a 30 or 15 year fixed mortgage. If you ever go with ARM, I think MTA should be the best index, especially when interest rates are going up because MTA is behind the curve. However, Fed will be lowering interest rate early next year. You will need to see how it unfolds to decide the best index.

Locking into a fixed rate is the similar to locking your inflation rate. Inflation rate has been low in recent decade due to globalization and immigration, and I don’t think it will be low going forward. When inflation rate goes up, bond yield goes up, and then all mortgage rates go up. At the current rates, I will definitely not go with ARM.

]]> By: Novice http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/comment-page-1/#comment-1424 Novice Tue, 26 Sep 2006 21:46:08 +0000 http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/#comment-1424 True novice here. Why is an ARM preferred to a 30 year fixed mortgage? Question coming from a person wanting to buy a single family residence in a year or two. True novice here. Why is an ARM preferred to a 30 year fixed mortgage? Question coming from a person wanting to buy a single family residence in a year or two.

]]> By: Frugal http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/comment-page-1/#comment-1419 Frugal Tue, 26 Sep 2006 13:14:43 +0000 http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/#comment-1419 Larry, Thanks for your link. Lots of stuffs for reading. I don't know much about 1990 real estate peak, and I think it really varies with individual circumstances. In 2000/2001, my household salary is close to $50K, while the SFR is about $550K. Affordability is really a serious issue for me. Even today, my household income at about $100K, with SFR at about $800K, it is still very tough for me to make such purchase. What was your ratio of price to income? I think you cannot refute the fact that affordability is a serious issue. It's only apparently easier because of the exotic mortgages. Larry,
Thanks for your link. Lots of stuffs for reading.

I don’t know much about 1990 real estate peak, and I think it really varies with individual circumstances. In 2000/2001, my household salary is close to $50K, while the SFR is about $550K. Affordability is really a serious issue for me. Even today, my household income at about $100K, with SFR at about $800K, it is still very tough for me to make such purchase. What was your ratio of price to income?

I think you cannot refute the fact that affordability is a serious issue. It’s only apparently easier because of the exotic mortgages.

]]> By: Frugal http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/comment-page-1/#comment-1418 Frugal Tue, 26 Sep 2006 13:03:28 +0000 http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/#comment-1418 Fin_Indie, Turn $67K to $500K is great for you. Wish the same was true for me. Fin_Indie,
Turn $67K to $500K is great for you. Wish the same was true for me.

]]> By: Larry Nusbaum http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/comment-page-1/#comment-1411 Larry Nusbaum Sat, 23 Sep 2006 19:53:11 +0000 http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/#comment-1411 Please delete in favor of: http://millionairenowbook.blogspot.com/2006/09/how-heck-can-i-even-think-about-making.html (but, those are the topics) Please delete in favor of: http://millionairenowbook.blogspot.com/2006/09/how-heck-can-i-even-think-about-making.html (but, those are the topics)

]]> By: Larry Nusbaum http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/comment-page-1/#comment-1409 Larry Nusbaum Sat, 23 Sep 2006 18:40:40 +0000 http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/#comment-1409 "The real estate was already beyond the previous peak on the inflation adjusted in 2000/2001, and I was afraid to buy into the peak. It turned out that it is the most gigantic boom/bubble in the human history in terms of dollar." OK, Frugal, here it is, the pattern keeps repeating over and over again. Your observation is perfect, it was fear that held you back. The numbers told the truth, as it did in 1990, onlt to blast to new highs. THE LESSON: IT'S NOT ABOUT THE REAL PRICE OF REAL ESTATE. The media, as well as so many who want housing to crash are confused. I have said over teh past 5 years that rising prices is no reason for declines ahead. It's not the NASDAQ. When I bought my SFR in San Francisco (1990)it was at the very peak of the market (May) and the recession hit 2 months later and went full blown on August 2nd when Iraq invaded Kuwait and oil hit the unheard of price of $40 per barrell. I paid $325,000 of a 3 BR house with a panoramic view of the pacific ocean. My landlady and own mother thought I over paid. The value probably declined over the next two years by about 10%. I DIDN'T CARE! I WASN'T SELLING. Today it's probably worth $1 million and I still don't care! I put down 20% and have have never refinanced the original loan, now in it's 17th year. (ARM) I always put down 20% and I never take money out. “The real estate was already beyond the previous peak on the inflation adjusted in 2000/2001, and I was afraid to buy into the peak. It turned out that it is the most gigantic boom/bubble in the human history in terms of dollar.”

OK, Frugal, here it is, the pattern keeps repeating over and over again. Your observation is perfect, it was fear that held you back. The numbers told the truth, as it did in 1990, onlt to blast to new highs. THE LESSON: IT’S NOT ABOUT THE REAL PRICE OF REAL ESTATE.
The media, as well as so many who want housing to crash are confused. I have said over teh past 5 years that rising prices is no reason for declines ahead. It’s not the NASDAQ.

When I bought my SFR in San Francisco (1990)it was at the very peak of the market (May) and the recession hit 2 months later and went full blown on August 2nd when Iraq invaded Kuwait and oil hit the unheard of price of $40 per barrell. I paid $325,000 of a 3 BR house with a panoramic view of the pacific ocean. My landlady and own mother thought I over paid. The value probably declined over the next two years by about 10%. I DIDN’T CARE! I WASN’T SELLING. Today it’s probably worth $1 million and I still don’t care!

I put down 20% and have have never refinanced the original loan, now in it’s 17th year. (ARM) I always put down 20% and I never take money out.

]]> By: fin_indie http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/comment-page-1/#comment-1408 fin_indie Sat, 23 Sep 2006 17:53:23 +0000 http://www.1stMillionAt33.com/2006/09/my-close-journey-to-riches-in-high-tech-stocks-and-options/#comment-1408 Man, I can relate to this post. I graduated university in '94 and rode the tech boom until today. Unfortunately, I haven't really been lucky enough to be at the right place at the right time. I have done ok, but I haven't struck it rich like some have. On another note, I did do pretty well in the real estate boom: 4 properties in 11 years and have moved from a $67k condo to a $500k townhome. I'm happy with that. Man, I can relate to this post. I graduated university in ’94 and rode the tech boom until today. Unfortunately, I haven’t really been lucky enough to be at the right place at the right time. I have done ok, but I haven’t struck it rich like some have. On another note, I did do pretty well in the real estate boom: 4 properties in 11 years and have moved from a $67k condo to a $500k townhome. I’m happy with that.

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