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Comment: Re:Not me, not in California (Score 1) 937 937

by whoever57 (#49983289) Attached to: The Vicious Circle That Is Sending Rents Spiraling Higher

Sigh. I do understand leverage. Perhaps I phrased it wrong above. You can purchase shares with "other people's money" as described in your quote, hence you can leverage.

Sigh, not as well as you think.

Yes, you can use other people's money to buy shares. But not with the same ease and to the same extent as you can on a home mortgage.

In addition to this you have the opportunity cost of having a 400k loan. While you have a debt of 400k on the mortgage you will have to forgo other investment opportunities. This is because as your debt level rises, and hence your leverage rises, your risk as an borrower increases and institutions are less likely to lend you money.

Credit scores don't work like that. When you take out a mortgage and establish a history of paying it, your credit rating goes up, not down.

Realestate is good for some people and not good for others. If you move around a lot then realestate has risks that other asset classes do not, shares being one of those classes.

If you are leveraged on the purchase of shares, your risk is much greater. There are lots of protections for home buyers that don't apply to purchases of shares. That's why I suggested buying a house, living there for a while, then leasing it when you want to move. Also, you should factor in the rent that you are not paying.

I think that, if you think you can use a few thousand dollars to buy a few hundred thousand dollars worth of shares, you are likely to be disappointed. Of course, today, the amount of leverage that I got on my house purchase is not possible or, very unlikely.

As you point out, though, house purchases are unlikely to work as a short-term investment (although there are people who flip houses for profit). Run the numbers assuming the same yearly increase in value over a 5-year period.

Comment: Re:Not me, not in California (Score 1) 937 937

by whoever57 (#49983031) Attached to: The Vicious Circle That Is Sending Rents Spiraling Higher
You don't understand leverage. If you want to make money from investing, I suggest that you understand it properly. This looks like a reasonable starting point Here is an explanation of how home mortgages provide a leveraged investment.

Consider the common real estate purchase requirement of a 20% down payment â" or $100,000 on a $500,000 asset. The buyer is essentially using a relatively small percentage of his or her own money to make the purchase, and the majority of the money is being provided by the lender. Real estate investors often refer to the remainder of the purchase price as "other people's money," since persons other than the borrower provided the money needed to make the purchase.

Assuming the property appreciates at 5% per year, the borrower's net worth from this purchase would grow to $525,000 in just 12 months. Comparing this gain to the gain from an unleveraged purchase highlights that value of leverage. For example, the same borrower could have used the $100,000 to make an outright, paid-in-full purchase of a $100,000 property. Assuming the same 5% rate of appreciation, the buyer's net worth from the purchase would have increased $5,000 over the course of 12 months versus $25,000 for the more expensive property.

Comment: Re:Not me, not in California (Score 1) 937 937

by whoever57 (#49982731) Attached to: The Vicious Circle That Is Sending Rents Spiraling Higher

The property market is just one form of investment and for many people it is a good investment. Not because it has particularly good or safe returns, though it often does, but because it FORCES people to invest.

No, the reason that property can be such a good investment for individuals is the opportunity for leverage. I put down only a few thousand dollars (5%) on my house when I bought it, yet its increase in value is very large (several hundred thousand dollars). Of course, with leverage comes risk. Many people lost out dramatically in the recession when house prices dropped. My house value never droppped below its original purchase price.

Comment: Re:Not me, not in California (Score 1) 937 937

by whoever57 (#49982193) Attached to: The Vicious Circle That Is Sending Rents Spiraling Higher

When you move from career to career, or take promotions within a company that move you around a state or country - you don't buy and sell a house every 2-3 years, you lease.

The really smart buyer buys at the first opportunity in something other than a bubble market and then, if there is a need to move, lease out the house. I bought my house some years ago, and its increase in value is greater than every penny I have paid in maintenance, taxes, mortgage, etc.. When I made an international move, I made sure that I stayed in the property market at home by buying a rental property. I now have two and my profit on those properties is far greater than I would have got from any other investment (because of leverage).

Comment: Re:Wow ... (Score 1) 289 289

by whoever57 (#49977869) Attached to: Samsung Cripples Windows Update To Prevent Incompatible Drivers

Some years ago, at my office, we had a laptop on which the hard drive failed, so I re-installed XP on it. I did not have an OEM image to work from.

I never did get sound working properly. The manufacturer had drivers on its website for that laptop model, but they were for different hardware. I tracked down drivers from the chipset manufacturer, and I could get sound partially working -- it worked through the built-in speakers, but not through the headphone jack, or the other way round.

The manufacturer: no surprises here: eMachines.

Comment: Re:I think it is the fear of being sacked (Score 1) 380 380

by whoever57 (#49974601) Attached to: Who Owns Your Overtime?

Teachers' unions have been under brutal attack for over 30 years now and there are today very few teachers with "strong" union protection left.

CA: very strong union. In fact, the CA Teachers Association has one of the largest political funds in the nation. From Wikipedia:

According to the California Fair Political Practices Commission, the CTA is number one on the "Billion Dollar Club", a list of the top spenders in California politics.

I see that an "advocacy group" is suing, in effect, to strip the teachers association of much of its political fund. If they are successful, many teachers may rue this.

Comment: Re:A more accurate summary might be: (Score 1) 192 192

Changing OS would also require rewriting (and testing) all those specially apps.

Re-writing and testing the apps to ensure that they continue to run on a fully supported OS should have been in the original contract.

EOL for Windows XP was a known event (if anything, it happened later than expected). Those people who failed to plan for this known event in the acquisition process failed to do their jobs properly.

Comment: Re:A more accurate summary might be: (Score 1) 192 192

Eh, my experience is that a lot of things in the military are sold as systems, and that includes the OS that goes along with it.

So fire, or demote, the idiots who did not plan for a known future event (EOL of XP) when purchasing these systems. That includes the Generals, Admirals, etc..

Comment: Re:A more accurate summary might be: (Score 1) 192 192

The US Navy paid $9.1M to insure that critical systems running an older OS are still supported while they continue to transition away from said older OS, a process that anyone with IT experience knows cannot happen overnight, and sometimes can take years,

It's not as if anyone knew years ago that XP would go EOL and a migration would be needed .... oh wait!

More seriously, while this may represent a rational and cost effective solution in this instance, what about the future in which Microsoft will release new versions of Windows more frequently, with consequently shorter lifetimes and less time to migrate than the time available to migrate off XP? What's the plan for more rapid migrations?

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