cash vs mortgage

 

Quantitative tightening ended right when the PCE managed to fudge a 2 handle.  It ended at 7.7 tril.  The fight now returns to creating housing inflation to offset the decline in chinese prices.  It always feels like you're missing out but lions are numerically as exposed to stonks as they intended.  

The media loves to predict the end of easy money, but lions don't see how the easy money can ever end, based on how inflation targeting works. As long as China innovates, the government has to drive up housing prices to reach 2%.  The next big thing is chinese electric cars.  If chinese electric cars became available, no-one is going to afford a Tesla.

The problem with buying now is the 401k automatically buys, prices are at a peak, & it leaves less cash to buy a dip. 

Part of the FOMO feeling is because all the lion stonks are in IRAs while all the lion cash is taxable.  Cash has gone nowhere while stonks have lifted off.  1 experience selling a monster growth stonk in the taxable account was a disaster.

There's going to be a huge initial expense when leaving Calif*, followed by a slow burn.  The initial expense is going to drain the taxable account at a rate which would cause a huge IRA tax burden.  The slow burn is going to drain the IRAs at a rate which should avoid taxes. 

 Lions have waffled on a down payment & a mortgage on a house which costs less than their net worth. The mane problem is the cash left over needs to grow faster than the mortgage interest.   The mortgage interest tax deduction helps with this.

It seemed like a good idea during that interest rate blip in 2023.  It would have to be 100% invested in stonks, otherwise.  Lions don't plan to have less cash than the value of a mortgage so it will most certainly be growing less than the mortgage interest. 

On the other paw, if the house is a small enough part of the lion kingdom's net worth, it could be argued that you'll always have a larger stonk position with a mortgage than by draining all the cash.  There's always going to be a cash position yielding less than the mortgage interest but there's also going to be a bigger stonk position with the mortgage.

There's a nonzero chance that it's cheaper to buy a tract house or prefab house in the middle of nowhere than develop the lion property.  It's too big for what a lion will ever need.  The game will be recovering capital from the property.

Being gifted a house would bring retirement many years forward.

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Calif* is paradoxically the most conservative culture anywhere, because the cost of living is so high & there's so much wealth, a secretary or school teacher can't survive without a breadwinner & infinite wealth is always a first date away.

It would take a dramatic reversal in social preferences which isn't going to happen for Calif* to ever approach even the most conservative vision of a liberal utopia.

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Got really close to 400m at 10mph.  300m was pretty comfortable, relatively speaking.  Lions seem to max out at 2.4 miles of cumulative speed, manely from time. 

#	dist	sec	min/mile
1	205	50	6:24
2	201	43	5:43
3	203	45	5:54
4	311	67	5:59
5	302	68	5:59
6	309	71	6:6
7	310	71	6:7
8	312	67	5:56
9	308	71	6:7
10	306	71	6:9
11	306	70	6:4
12	300	112	9:56
13	307	71	6:7
14	300	66	5:53

The truck is definitely a hair slower when carrying the shirt. The nose might have made the difference between burned out motor windings. 

With the protein supplements speeding up recovery, there's potential to go a lot faster, but lions expect to intentionally slow down for photographs. 

Dec was a paw crushing 265 miles, partly due to vacations.  Lions won't achieve that in Jan.