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Strategy for saving for downpayment

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oldguy
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quote:
Too bad they don't have a tax deferred home down payment savings account.


Mine is! Very Happy

quote:
(from post above) My way of buying houses is a bit unconventional, I build up the money in our Taxable SP500 Index fund. And then I don't use it for a DP,
Post Fri Mar 22, 2013 5:54 pm
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coaster
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Originally posted by slasher
... are you telling me when we hit rock bottom in 08 that you didn't realize that we had hit a low point?

Every day is a new low point when every succeeding day is rock bottom and you have no way of knowing whether today's rock bottom will not be exceeded by tomorrow's rock bottom until well after it's happened.

Heck, if I could call bottoms and tops I'd put 100% of my money into SP futures contracts. I would be a multi-billionaire in a couple weeks. It's just not that easy.

Typically, a top or a bottom is not recognized until the markets have retraced roughly 50% of the move.

~Tim~
Post Fri Mar 22, 2013 11:15 pm
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coaster
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Originally posted by slasher
When I can get stocks for below their REAL value.

You can do that *anytime* because that's my main investing strategy and I do it all the time regardless of what the market is doing. But that takes method and research and buying individual stocks when their market price is less than what my research tells me their "fair value" really is. You can't do that with an index fund.

~Tim~
Post Fri Mar 22, 2013 11:19 pm
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slasher
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quote:
Originally posted by oldguy
quote:
Too bad they don't have a tax deferred home down payment savings account.


Mine is! Very Happy

quote:
(from post above) My way of buying houses is a bit unconventional, I build up the money in our Taxable SP500 Index fund. And then I don't use it for a DP,



I was thinking about your strategy last night actually...

So just to clarify you invest the money wait until it doubles in the market thanks to compounding and pay the mortgage off?
Post Sat Mar 23, 2013 1:50 am
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coaster
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Cash: $ 1626.30

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Joined: 11 Oct 2005
Location: Wisconsin
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Slasher. Sigh. I'm worried about ya, man. The way you talk about the stock market makes me think you don't understand how it works. Stock market gains are *not* a sure thing. You use the word "compounding" in conjunction with the stock market and that's not appropriate.

I should have said this at the very beginning of this conversation: in my opinion, and the advice most financial advisors will give you, is that any money you're hoping to use for a down payment within the next five years should not be in the stock market. It should be in an investment vehicle where the term "compounding" IS appropriate. That is, something with a guaranteed principal and a fixed rate.

~Tim~
Post Sat Mar 23, 2013 6:30 am
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