Home Forums Hunting & Shooting Hunter's Campfire Investment Advice

I'm always impressed by the knowledge on the campfire so, once again, I come here seeking wisdom!

Given the current economic circumstances, what would you do in this scenario. In our 60's. I'm retired (medical)/wife still working (good job with good Bennie's). She plans to work five more years. House paid for. No debt.

Almost all our money is invested in stocks, mutual funds, etc. House is small, one car garage. It's our starter house, bought in '84.

I'm thinking we should pull out some of the money we have invested and put it towards more house and maybe a little land. When inflation gets REALLY bad and the economy TANKS I'd rather have house and land vs. devalued cash. We could get double the house we currently own and still have a nice nest egg of several hundred $. Maybe it would be better to take out a loan? Thoughts?

With low interest rates on mortgages, you'd be better off leaving your money in investments that give you a return higher than your mortgage.
If your investment is big enough use the interest earnings to pay your monthly house payment, that way you don't touch the principal, and maybe you still have a little interest left each month for growth.
If things go south, you can always use your investments then, but for now, let it work for you.

A tax guy can tell you if using your investment earnings to pay the mortgage can be balanced against the income tax hit versus the home deduction, if any.

Personally, I am a huge fan of any hard commodities you can own and ride upward with inflation. Especially stuff you know. (i.e. If I was a trailer builder and had stockpiled a massive amount of steel and parts before steel when stupid... I would be looking brilliant about now. But I am not a trailer builder).

Personally I see real estate as overly inflated. People are mortgaged to the hilt. Owning outright is a HUGE WIN. SUPER SMART FOR YOU AND YOUR WIFE. Especially a modest home.

Investments... (Theoretically if a man invested $200k in Exxon 5 weeks ago... that risk would be $245k today.). But half of the world plays that investment game so be extremely careful.

In short, there are no good answers.

I’m a little confused. You say your money is invested in mutual funds, but then you say you’re afraid of devaluing cash.... unless your mutual funds are bond funds, you don’t really have cash. Stocks only go one way over the long term: up. Short term it may have some Maalox moments, but it always goes up in the long term.

That said, the bottom line is that a house does not produce income, while investments produce income. To answer the question if you can afford more house you simply have to answer the question: if I exchange investments for house, does that jeopardize my future living standard.

How you go about financing the upgrade doesn’t really matter. Either way, you have to pay for it. Not selling investments and getting a mortgage is really no more than pretending you didn’t really spend the money, and simply trades risk for returns. if I had no mortgage and money, I couldn’t see myself signing up for another one. It may technically (on paper, on average) be the better play, but the price in peace of mind is too high for me.

Put a chunk of it in specie.

If you're wanting a new house, I would lean more towards a modern "smaller" ranch house built to your specifications (rather than a larger house) to keep you both happy and comfortable for the next chapter in your life and maybe buy more property rather than more house.......Just my opinion.....

This would be such an unwise move bordering on plain foolishness.

The house you've been in for 36 years has been fine, up to now, and is paid for. Surely you don't suddenly need debt and a house twice as big.

IDouble post

I'd agree, why go into debt?

Fixed rate debt wouldn't be a bad move at the dawn of a hyperinflation. Variable interest rate debt would be disastrous.

He did say a little more land. Nothing wrong w having room for a big garden, enough room to grow a calf to butcher, a few chickens

He’s retired, a guy has to have something to get up & do everyday.

For those not raised on a farm this probably has very little appeal

But for a guy like me it smells like heaven & cow chit & chicken chit, of course

You’re retired due to medical problems, yet you want more land and house to take care of? Knock yourself out I guess.

First response nailed it.

I see a couple of things.

Like Gregintenn mentioned, you retired due to medical reasons, are you able today and going forward able to take care of acreage?
Chainsaw, polesaw, tractor work, lawn mowers, controlled burns, fencing projects and a host of other things.

With regards to financing, I'm a fan of fixed low interest debt on assets like real estate.

First post stated: House paid for. So, no, first response didn't nail it.

If he buys a new house he should leave the investments alone and take out a mortgage.

Hold your cash, wait for the next crash. Current environment for real estate (at least around here) is hugely over-valued. Basic starter homes are going for $250 per sq. ft. 1 ac lots in County subdivisions are going for $100K+

Or............just enjoy your success, your savings, your investments, your paid off home, etc. and go fishing.

There is also that chance that a new home, won't feel like home. Especially after being in your current one for nearly 40 years....

Every choice has a risk / reward tradeoff.

Investment counselors will advise diversity and caution.

I am personally brave in the stock market, but fearful of the work involved in new real estate projects.

So... Cash is not king?