If you're thinking of buying a new house, consider doing it now before prices rise - a lot!

Even moving my mobile home onto a private lot is going to soar in cost.

I probably should have already done it, instead of rent, but I actually had hoped to get out of debt this year with a bit of luck, and was concentrating more of that.

RogerNC

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Hi, Dr. Bill.

Usually home prices fall when interest rates rise, because folks only have so much purchasing power for the payments.

-- Dave K, Speakeasy Moderator
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The opinions expressed above are my own,
and do not necessarily reflect those of CNET!

really taking a big hit before we moan too much about higher rates.

Hi, KP.

The key number is the difference between the inflation rate and the interest rate -- though it doesn't look like it in numbers, the elderly are probably better off getting less $ in interest but losing less to inflation. If you're only "making" 0.5% while losing 2% to inflation, your net loss is 1.5%. If you're "making" 8% while losing 12% to inflation, your net loss is 4%!

-- Dave K, Speakeasy Moderator
click here to email semods4@yahoo.com

The opinions expressed above are my own,
and do not necessarily reflect those of CNET!

.5% instead of 5%, that's a big problem even if inflation is only 1%. Has it, within memory, ever been less than 1%? Of yah, I forgot. Low rates were Clinton's brainstorm weren't they? I wonder how many people remember that.

As one of those elderly who is getting 1% interest, I haven't griped because (gasp!) I know it is a bad time with the recession, etc.

Thing is, as food, milk (I like milk), and gas prices are reaching all-time highs, I'm starting to think about inflation.

BTW, during the Clinton years, I never got less than 6%.

Y'see, folks of my age have to be very conservative, so, unless the estate is large, can't take a chance in the stock market. It's CD's for us.

Angeline
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I'm not all that financially savvy, but if I understand what little I have read when looking at 401K investments, a general rule of thumb is that you should have enough for the next 5 years outside the stock market.

Then you don't have to cash out when market takes a dive. You can regularly move a bit out of market into something else when market is doing well, and wait out any downturns.

There is a tier approach I read too. Everything not needed next 5 years in stock market. Money needed in next 2 years should be in guareenteed forms, CD's or regular accounts.

The money you expect to need in between 2 to 5 years may do better with less than stock risk in a bond market fund. Generally when stock funds go up, bond funds go down, and viceversa. So one or the other should be available for withdrawal without taking drastic losses, except for very short periods of change.

So that's why have 2 years worth of guareenteed money.

Now someone that probably does understand better than me can probably point out all sorts of fallacy with that general stragedy.

RogerNC

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That's pretty much as I understand it, as well/

The health care for my husband decimated the Booher funds. So I don't have enough to split.

As it is now only me, I bought Long Term Care insurance, which should make it easier on my kids. Sold my house, so the state can't "take it", gave the kids what money I didn't put into this place. At my age it ain't easy to project how much I will need x number of years from now.

Now younger folks are ccharged with having x number of months in reserve in case they get laid off, save for their kid's education, save for retirement, et cetera.

BTW, we bought 2 brand new houses, but then opted for one built in 1926. This one was built in 1930. Of course, I am an old house fan. They are usually larger for the money, and unless a lot of renocation or remodeling is needed, IMO, there are a better buy considering the rising new building costs.

Angeline
click here to email semods4@yahoo.com

Clinton began phasing out long term government debt and focused instead on short term debt. This reduced gov't borrowing costs, but also eliminated some long term investment opportunities. 30 year treasuries, for example, have been eliminated. Thus, you are left with choices like CDs which may not pay all that well because they are short term instruments.