ChrisB

I've witnessed four real estate corrections. Calgary Alberta 1979, Toronto Ontario 1988, Honolulu Hawaii 1992, Vancouver BC 1995.

In each one I would have loved to have owned three homes with minimum down. In the long run the best is to sell before the bubble shrinks.

Using your figures, even if you bought with 0% down you have apreciated enough equity for 3 x 75% of the original price = 225% of the original price. You should be able to buy a house now worth 175% of the original benchmark price with cash from the sale of three homes. Afford a 28% increase in house size ... or have cash left over to pay for inceidentals.

Being mortguage free provides a great peace of mind.

jeffreyy

Chris,

I think there are two sides. If you are young and have a high income, then having a house or two to pay off (in the US) as a tax break is a good thing, and I would argue that having the $ to pay off the house in liquid or near liquid assets is preferable in that situation to paying off your house given the tax break and not having one's assets locked inside a property.

If however, you are nearing retirement, then perhaps paying off the house makes more sense for more peace of mind.

In my mind, I am at peace whether I have the house paid off or could pay it off at a moment's notice if necessary.

Jeff

tiggerfink

It really depends on what people want to do with their resources and what stage of life they are at. Some people just do not like to pay interest so they pay cash for their houses and cars. Some people want to make their money grow by investing in other areas like real estate, businesses, and the stock/bond market. So these folks may have leases or loans on their cars and just pay the mortgage each month, because their money makes more in their investments.

Read the book poor man rich man and that will help you get on your fortune.

jettie1767

Just turned 38 here.

ChrisB

You are right, in the artificial environment of intrerest wright offs that the US government endorses.

I am left thinking, the bigger the bubbel the harder the fall.

Demographics will eventually rule. Wealthy baby boomer aside ... who will eventually (say in 10 years or less) want to not own property (maintenance).

Who in the Boom-bust generation can aford to suport high real estate prices?

WIldcat465

That is correct (give or take a few percent). For example, one home purchased two years ago for $700k has been appraised for $1.3M today and has comps to support the value. Another purchased for $497,000 two years ago has appraised for $1050000, and the 3rd purchased for $455,000 has appraised for only $850k. In each of these cases, these home are some of the most affordable in each area. Even if the market softens in San Diego, and I think it will (a little), these results (for me)are far better than having a home paid for. By the way, all will be sold within the next two years so I can build and pay off a house.

LovinMercedes

I'd say a very smart way to do it. Sounds like some great results to me.

Congrats.

WIldcat465

That's an interesting point. I've actually become disenchanted with these very high priced cars. When I factor in medicore deealer service, spotty reliability, poor resale value I don't know if I'll spend this much again. My CL, which I enjoy more than the SL, is at the dealer every two or three weeks for minor problems. I'm tired of the hassle. When I was in college, we had an Accord and I never had a single (even minor) problem with it. The only time it went to the dealer was when I discover it was leaking a lot of oil. The result was that I didn't tighten the filter enough a the last oil change. Dealer changed the oil and put on new brake pads. Total cost = $89.

Of course, it doesn't have the feel of a the more expensive MBs, but I'm finding that I value a combination of reliability, value, performance, and good looks. Of these 4 criteria, MB has only two. There are 18 months left on my CL lease and I'm keeping my eyes peeled for its replacement.

WIldcat465

ChrisB, you seem to have a pessimistic outlook. I'm not sure what you mean by "artificial interest write-offs," but they're very real. San Diego's bubble burst 10 or 15 years ago; however, it recovered because we have a unique combination of circumstances: rising population, no land to build, mild weather year round, and a strong job base. I don't see the gloom and doom that you predict. Granted, not everybody can afford a million dollar home or a $500k condo, but there are many who are willing and able to pay the price and make the sacrifices to live here.

NeilC123

Yes I agree with you about the high priced Mercs (see my other respoonse on the Vanquish thread in this forum). I would only go for the lowest of the SLs if I ever did - as I would be really gutted if I bought a high end merc and it would have reliability problems.

rager2700

Just turned 27.

-Black 911
-Black SL55

benzboy

I bet you want that '56 Gullwing back!!!

dilanja

29 30 in March
280 SEL '83 131k

seattlecarfreak

wow this is an old post, someone must be reading every post on here
i think i'm the youngest 230 owner here.. 25 here.. (we'll i've had the same cars for 3 years now.. so i guess even younger back then.. so much for delayed gratification in life.. me = business owner and nobody to spend money on but me me me! that's not selfish now is it? :P) ahh to be young, dumb and not thinking about your future.. remember the time all? :P

giffSCPA

I'll be 75 next month.

I've first owned a new Mercedes, in 1962. Black 220SEb- HYDRAK shifting (auto. clutch on shifting lever switch at steering wheel) + USA installed A/C with hugh trunk unit-- air coming up TWO large adjustable ports behind the rear seat.

The dashboard notably featured a tall pod directly in front of the driver outfitted with thermometer-style instrumentation (imagine a speedometer that fills up like a fund-raising drive's poster as the car's speed increases).

The idea behind the automatic clutch technology is to provide an experience that requires driver input, and therefore is interactive rather than passive, but also eliminates the need to disengage the clutch repeatedly in city traffic. The name Hydrak itself comes from the German words hydraulische kupplung (hydraulic coupling). The Hydrak was co-developed by Fichtel & Sachs and Daimler-Benz AG for use in the 6 cylinder Mercedes-Benz Ponton sedans, coupés and cabriolets. It was a factory-original, extra cost option which consisted of a synchronized, column-shifted, four-speed transmission with an automatic clutch. Furthermore, the clutch, control valve assembly, and the servo unit were made by Fichtel & Sachs. The fluid coupling was made by Daimler-Benz. The system served to bridge the gap between having a fully manual and a fully automatic transmission. The Hydrak option originally cost DM450 (450 Deutsche Marks).
The Hydrak never became an equipment detail that was particularly liked, which made the Stuttgart engineers distance themselves from further development after using it in the W111 Heckflosse (fintail) models Type 220b / 220Sb / 220SEb (1959-1961). Because the system depends upon a combination of vacuum and electrical components to function properly, the potential for wear and other problems is fairly high. Many owners became dissatisfied with the systems when they began to develop problems, and because of this, converted the cars to manual transmissions.



Giff Albright, State College, PA, USA

giffSCPA

*************************************************
For those interested, read all about the Hydrak system:

http://www.mbzponton.org/valueadded/...nce/hydrak.htm

Giff Albright, State College, PA USA

SLcharger

50 here

So you guy´s think you have Tax problems. Well think again.

I have payed for 3 supercars, but only got one. In Denmark we have a VAT ( value added tax ) of 25%, a Car Tax of 180% ( calculated on basis of value of car +VAT+Fee ) when registered first time, Income tax at 62% for annually income above 51K$.

A new SL55 comes at around 465 K$

If you drive a company car, and want to use it for private driving as well, you will have a added tax of about 15% of cars value, annually.

To many taxes and rules to be mentioned here.

I think you schould consider yourself lucky, to live in Country´s where tax policy is more humane, although there are benefits by living in Denmark ( especially when you have low income ).

So you see, i am happy that i am able to affort just ONE nice car.

I have considered to move to California, when i get older and have passed on my company to my son´s.

PS. Realestate price have gone sky high as well over here, over the last 5 Years.

blueSL

Horrendous, though I think Norway may be even worse. I don't subscribe to the European social handouts model. You make your way in life by getting out of bed in the morning and working.

MD750

29...30 in March. Don't own yet, but looking...

I agree on the owning a house "out right" thing...it doesn't make good tax sense for me to own a house out right at my age. I wouldn't have ANYTHING to write off at that point! I do also agree that I do not like to pay interest on vehicles...or any interest I can't deduct at least a portion of for that matter. I own my vehicle and we are currently leasing my wife vehicle that we will turn in at the end and purchase her something with cash.

I am surprise by some of the ages, but it makes sense if you think about it...21-30ages may not have any kids and 45+ may have older kids. My friend that has an SL is 27 or 28, no kids, lives by himself, and makes decent money. I have a wife and 2 young kids so it really doesn't make practical sense, but I do drive everyday to work alone...so there's my time to drive right there! Just like seattlecarfreak mentioned...it's A LOT easier to afford things like this when you only have to spend your money on the things YOU want.

Juice it

It may make sense to pay cash for a house in a trailer park but in the real world and most any decent market the only way you are paying cash for a house is if you have worked your whole life and paid it off or if your family gave you the money. Starter homes in most big markets in the country are at least 500k and around here that gets you a 2 bedroom condo in a sorry building. I would like to know where all the $$ comes from for the people that pay cash for their houses or better yet what kind of house they live in. Unless you have FU money there is no reason to pay cash for a house.

blueSL

You can argue that the ability to borrow large sums of money to fund a home purchase, especially in a market with limited supply (quality, space), simply fuels local house price inflation. Lots of people with big loan facilities chasing a limited supply of houses.

The only time house price inflation works to your advantage is if you move down-market. For the rest of the time, your next house is moving away from you.

I had a loan for about 6 years in my 20's and paid it off. I've paid cash for everything ever since. There's a real feeling of being in control when you don't have the bank breathing down your neck.

seattlecarfreak

the problem is, that when you make BIG money or show you have BIG money, you are a walking defendant in a lawsuit waiting to happen.. whether everyday living or from an employee citing 10 million in damages for discrimination, etc.. or some other crap.. when everything is paid for cash, and all of a suden you start liquidating and putting cash overseas, the paper trail will all be left and you'll look as guilty as a three dollar bill, and chances are the judge will make you go "get" your money and throw your in jail until you do if he or she wants to be a jerk about it.. now if you had your money overseas before you were sued, and have been nicely paying your payments monthly.. and barely have any equity in your house/car before being sued.. then that's a different story..

this isn't a problem as much for european residents, but there are over 15 million lawsuits currently pending in the US.. 1 out of every 4 people making over $100,000 have a chance of being sued for more than their worth in the next 10 years... thanks to lawyers and people that don't want to work for their money, having a huge abundance of cash assets sitting around for the taking isn't always the smartest idea all the time..

paying for everything cash, is a give and take, depending on your line of business and how "big" you live... and some high risk businesses that we own can potentially wipe us out in a few months due to a lawsuit from some greedy minimum wage worker and a ******* lawyer that doesn't want to work for their money... welcome to the good old us of a...

BiTurboBenz

I have had my car for 1 month now and 4 different people have said the same thing to me "Where do go from a V12 twinturbo hardtop convertible Benz?" :v

blueSL

I'd move away from New Jersey as a start...

Chris 45971

You're right there Blue. Some of the roads here in central Jersey are better than most might think, but every time I head out to Penn or Maryland, I realize I'm missing something here.

I will be moving to Maryland in the next couple years. The driving will certainly be more pleasant.