Am I the only one without a "budget"?

[chimo2u]

Disneylicious: that is all fine and dandy for living in the moment, and I can see what you mean about never knowing if you will have tomorrow, however, what I would be scared of with your way of thinking is.....What about when tomorrow DOES come? And I am too old to keep working/making an income....and I am at a time where I HAVE to retire.....what do you/I do then with no retirement savings? Live on the street because I never looked that far ahead? retirement comes before you know it, and I am 41, and have a little retirement savings, and thank goodness my husband also has his military pension and is working on his second career pension, but I am still worried that I have left heavy retirement savings too late to get compound interest working for me! I definitely could not see ignoring retirement saving altogether. It is something we need to do to ensure our own well-being and future living expenses, as for most without a pension, the govt. Sure is not going to take care of us when we are elderly and not part of the active workforce anymore!

 

[dvcgirl]

However, the way the word "budget" was used in the OP did not capture this broad definition. The OP was talking about a detailed budget that gives line items for things like groceries, etc. This is what most people were responding to.

I agree that there are all sorts of ways to "budget." I work best in a three category "budget": savings, fixed expenses, everything else. This is not what most people would consider a "real" budget though. It works for me, and always has -- even when my paycheck was barely covered food and rent.

Some people do better when they don't need to think about money all the time -- a detailed budget lets them set up categories once a year (or some other broad time period) and then they can go on autopilot. When grocery money is gone, it's gone. When their insurance comes due, they have been saving each month for it and the money is there.

For me, that kind of budget is stressful. I know how much money can be spent on "not savings/fixed expenses" and don't worry about how it falls month to month. I know this system would stress other people out. Structure is a comfort to some and claustrophobic to others.

This is exactly right. For some, a very structured budget brings comfort. That's me. Other's can be a bit more loose about it, and be fine.

Having said that....both are still living within in a budget.

Here's exactly what we do each January.....

At the top of the page, we put our estimated after-tax income. That number isn't set in stone, DH may get a raise, I may earn more than I previously anticipated....but we generally come very close.

From that number we deduct the amount we plan to save for the year. 401Ks are maxed out. For me, with a self-employed 401K we add an additional 20% of my profits. The majority goes to taxable accounts. We discuss what money to put into what funds. And we also look at the performance of our funds and determine if we need to make any moves in that department.

Having done that, we total up all of our monthly bills. Utilities, all insurance costs, a set amount of vehicle maintenance, pet spending, property taxes, groceries. And that's it. We don't like having 50 categories...that would drive me nuts. There's not too much fluctuation from year to year on these items, but we usually bump each category up a bit from year to year to allow for some inflation....giving up a cushion. We multiply that number by 12....those are our monthly bills for the year. Deduct from our net income after savings.

Having done that, we ended up with about 54,000 this year, This year we decided on a two week trip to France....with the Dollar in the toilet, we allotted $16,000 for that trip. That leaves us with 38 K. We deduct $6,000 for my husband's hobby.....the guitar. $2,400 for lessons and $3,600 for "musical toys". This is a passion of his, and it makes him very happy....it's in the budget.

That leaves 32,000. We have a cleaning person who comes every other week. Deduct 2,600. That leaves $29,400

$29,400 divided by 12 is $2,450....and that's our "monthly spending money" for each month. We don't break that down any further. That's for eating out...gifts....clothing....splurges of any kind.

And so the only number I care about each month is $3,250....our grocery spending ($800) plus our discretionary income. I keep an eye on it monthly. Almost all of our spending goes on AMEX....so I can see the running total. If we have a particular big thing coming up....for example, my cousin will get married next year and we'll give him $1,000 for a gift (he's like a nephew), so I'll mention that to DH ahead of time, and we'll likely pull $350 a month a few months ahead of time so it doesn't all hit in one month....that kind of thing.

We keep a $5,000 "mini-emergency" fund for major car repairs and household expenses. It's kept in checking and so it also acts as a "cushion" in case bills need to be paid before DH's check hits our account...that kind of thing. But at the end of the year, that 5K is there. If we have a major repair and that can't be paid out of discretionary income, and we dip into the 5 K, we set a plan to pay the money back until we get to 5K again. And we keep a year's expenses that is never ever touched.... Only to be used if absolutely necessary.

And that's it. It's quite easy really. The money comes in and moves to various investment accounts, gets paid to bills, or builds up in money market funds for upcoming trips.

That's how we run our household budget. Once it's set, I don't even have to think about it.....other than to keep an eye on the two categories I mentioned. Having a budget brings an extraordinary amount of peace to your financial life.

 

[Swan4Me]

Having done that, we ended up with about 54,000 this year, This year we decided on a two week trip to France....with the Dollar in the toilet, we allotted $16,000 for that trip. That leaves us with 38 K. We deduct $6,000 for my husband's hobby.....the guitar. $2,400 for lessons and $3,600 for "musical toys". This is a passion of his, and it makes him very happy....it's in the budget.

.

So $22k of your $54k living expenses is spent on Frivolity?

That is 40 %!!

But your Uncle is reckless because he wants to buy his wife a $500 electronic thingy?

 

[Planogirl]

I dont have a budget and never have. I dont have a savings account, retirement account and dont have one dollar put back for retirement.

I watched my parents work their whole life to secure a comfy nest egg of real estate and now watch them as they struggle to pay their bills (and they still have the real estate, which is worth nothing these days). They have rental homes and renters dont have jobs. Renters cant pay, my parents dont "get paid". On top of that it costs an average of $200 per renter to go through the courts to have them evicted, then there are repairs to the homes, etc.

I dont have any bills other than my utilities and a cell phone. I pay my bills and dont do much else. We take a very nice trip to Disney every 2 or 3 years, that I am able to do with my income tax return. I am a single mother with no money to set aside for anything.

Sure I could set that income tax money back in a savings account....for the possibility the economy collapses, or that I die and cant take it with me. But for me, I'd rather spend it now, with my kids...fulfilling their wishes and seeing them enjoy their childhood for we never know when they will no longer be with us.

I have a very carefree life and as a family we enjoy it very much. I live on a farm and grow most of our food (vegetables, fruit, and meat). I guess one could see that as budgeting but to me its a way of life. Its just normal. Its what you do, when give the chance. It was my opportunity in life to be blessed with never having to buy meat and rarely vegetables. Many others are blessed with great jobs they worked hard for. Living from the land is my 'job' and I feel very fortunate at the life it gives me. Money isn't a 'staple' in our life. Its not a priority.

Sure we have hard days, weeks, months. But we know that down the road the 'Magic' is coming. (We all love Disney). We dont go out to eat very much, we never go to the movies (2 trips to the movies could buy us a Disney park ticket), and we shop very thrifty.

I understand my lifestyle isnt for everyone. But for me, having no money is one thing. Having no money and bills due is another. I dont have either and I still feel very fortunate.

As a single mom I make less than $10 per hour and my kids just asked for a 2 week trip to Disney. We'll be there. Mom will make the magic happen and they know it. Life is truly wonderful. My oldest will be 18 this year. It will probably be the last vacation I take with my boys before my oldest ventures into a life of his own. I want those memories more than I want money in the bank. Im greedy. Im selfish. Im a MOM.

For those who do save, I admire and respect you all a great deal. Someday I may do the same, but not today.

Do you own your farm? I can see the lure of living off your land and how having that option could help a person not need as much money. However there is still that catastrophic event possibility.

For example in just the past month, my car lost its starter and DH's car lost its air conditioner compressor. The A/C had to be repaired because the belt system was all interconnected. A couple of thousand dollars later, my emergency "right now" amount that I had set aside is pretty much wiped out.

I'm not the best saver and we've had more of these catastrophic events (layoffs, medical issues) than we should have had but it is definitely more difficult when you have nothing to back you up. I did and even though most of it was wiped out, I'm grateful that we found a way to get through it. I guess that's really what we all need, some way to get through it.

 

[Marionnette]

So $22k of your $54k living expenses is spent on Frivolity?

That is 40 %!!

But your Uncle is reckless because he wants to buy his wife a $500 electronic thingy?

You either misread dvcgirl's post or you chose to misrepresent her numbers to make her look bad.

That $54K is what is left AFTER SHE PAYS HER LIVING EXPENSES AND PUTS MONEY INTO SAVINGS.

It's fun money. She gets to do what she wants with it. If she wants to spend 40% of her fun money on "frivolity" then that's her prerogative. She earned it. She gets to spend it.

And the uncle who wants to buy his wife a $500 electronic thingy burns thru his earnings to the point where he has to finance the darn thing instead of paying for it outright. Yep, I'd call that reckless spending too.

 

[dvcgirl]

You either misread dvcgirl's post or you chose to misrepresent her numbers to make her look bad.

That $54K is what is left AFTER SHE PAYS HER LIVING EXPENSES AND PUTS MONEY INTO SAVINGS.

It's fun money. She gets to do what she wants with it. If she wants to spend 40% of her fun money on "frivolity" then that's her prerogative. She earned it. She gets to spend it.

And the uncle who wants to buy his wife a $500 electronic thingy burns thru his earnings to the point where he has to finance the darn thing instead of paying for it outright. Yep, I'd call that reckless spending too.

Thank you.

 

[dvcgirl]

Disneylicious: that is all fine and dandy for living in the moment, and I can see what you mean about never knowing if you will have tomorrow, however, what I would be scared of with your way of thinking is.....What about when tomorrow DOES come? And I am too old to keep working/making an income....and I am at a time where I HAVE to retire.....what do you/I do then with no retirement savings? Live on the street because I never looked that far ahead? retirement comes before you know it, and I am 41, and have a little retirement savings, and thank goodness my husband also has his military pension and is working on his second career pension, but I am still worried that I have left heavy retirement savings too late to get compound interest working for me! I definitely could not see ignoring retirement saving altogether. It is something we need to do to ensure our own well-being and future living expenses, as for most without a pension, the govt. Sure is not going to take care of us when we are elderly and not part of the active workforce anymore!

Tomorrow will come. Disneylicious' plan isn't carefree under any definition of that word. It's reckless. And I'm not picking on Disneylicious, just her plan. She seems just fine with her plan.

In the real world though, there are so many holes in it....it's mind boggling. Just because your parents planned poorly, doesn't mean that you have to plan in the same way. It sounds like they purchased too many rental homes and held far too little in cash. Rental home heavy and cash poor. They had no liquidity. And so when the real estate market crashed, and renters stopped paying, they didn't have the funds to cover the expenses. Perhaps they purchased a lot of the rentals with debt, and so they were reluctant to sell....or they just can't bring themselves to sell because they believe that their rental properties are "worth more" than current market values. But those rentals are worth only what someone else is willing to pay. That's what makes a market.

They had a plan, but they executed it poorly.

But that doesn't have to be your plan.

The plan you have works....until something goes wrong. Any little thing....or even worse, a major thing....like a disability, and you'd be in trouble. What if you can't farm the land. What if you have a bad crop. What if a disability brings massive medical bills (even just co-pays can wipe people out these days with a major illness)......then what?

A lot of Baby Boomers hold this same assumption....that they'll never be able to save enough, so why bother. They figure that they'll just have to keep working. Until they can't. Anyone over 40 knows that these mysterious little aches and pains start to appear around that age....by 50, it's a bit worse. 60 might be the new 50, but it's not the new 40.

And listen, I'm not picking on you. We're all adults and we do what we think is best for our family's situation. But I've always structured my financial life in a way that "covers my negatives". All of those "what ifs" that are out there....that can strike us at any time. I know we can't plan for everything, but we can act responsibly enough to at least try.

That's the only way I can put my head down on my pillow at night and get a good nights sleep.

 

[S. C.]

There is a reason that GM and Chrysler went bankrupt... and why municipalities are in trouble now... Pensions and Retiree Medical.

These obligations are not cheap.

And for a person in the NY area without a traditional pension plan saving several million dollars will be the only way one can truly exit the workforce.

PS - I am not bashing GM and Chrysler... in fact, I am an avid fan of GM cars (in a part of a country where GM is not all that popular). In fact, I just bought a brand new Buick Regal Turbo this week - and I LOOOVE it!

So the bankruptcies had nothing at all to do with CEO's getting millions and millions in bonus's and huge benefit packages year after year? And tons of mis managing funds? Why is it always the struggling worker that gets the blame?

And to answer OP's question. We do not have a paper budget but are very careful with how we spend our money.

 

[dvcgirl]

I don't do a written-in-stone budget either, but I'm still on the No Buy thread. It gives me a direction, and, budget or no, knowing where your money is going is the key.



And I must add, I love when dvcgirl posts. She has her head on straight and tells it like it is-even when others don't want to hear it. Disneysteve (I think that that is right) was another poster that did so, although I don't think that I've seen him around much anymore.

Disneysteve is great. I see him around here from time to time. He's a physician and gives great financial advice. He posts on another board that is more dedicated to saving and investing....can't remember the site. But he's great.

Others on here who have been around for a long time who are very good....Crisi, Mrs. Pete, Eliza61, Punkin.....there are others I may be forgetting, but I'm not around as much as I used to be. But those names come to mind....people who have their financial acts together.

Those posters, like me, are more interested in the deeper threads when we get into discussions about savings and investing and the state of the Average American. That's not to say that there aren't lots of other valuable threads here, but all of those savings threads and CVS threads....or how to get a deal on this or that....I never read that stuff.

I got picked on a bit on this thread....and I don't mind. I'm a big girl, I just didn't recognize that poster at all. Again though, I haven't been posting much lately....so, clearly there is a new cast of characters here.

 

[travelbug]

Disneysteve is great. I see him around here from time to time. He's a physician and gives great financial advice. He posts on another board that is more dedicated to saving and investing....can't remember the site. But he's great.

Oops, I came back to edit. I forgot that I shouldn't post a link. Anyway, Disneysteve posts over on the saving advice forums and I enjoy his common sense approach to finances.

 

[bumbershoot]

Just because your parents planned poorly, doesn't mean that you have to plan in the same way. It sounds like they purchased too many rental homes and held far too little in cash. Rental home heavy and cash poor. They had no liquidity. And so when the real estate market crashed, and renters stopped paying, they didn't have the funds to cover the expenses. Perhaps they purchased a lot of the rentals with debt, and so they were reluctant to sell....or they just can't bring themselves to sell because they believe that their rental properties are "worth more" than current market values. But those rentals are worth only what someone else is willing to pay. That's what makes a market.

They had a plan, but they executed it poorly.

But that doesn't have to be your plan.

I totally agree.

Our landlady is great, but even she got in over her head coming up to 2008. She went in with her brother on a place that was supposed to be a townhouse, but condo papers were handed over at closing. BIG difference between the two...we'd already signed on to rent it from her, but left after a year because the things that made a townhouse sound good weren't possible with a condo (mainly a fence around the backyard...the other condo owners refused to sign permission). And they bought at the WORST time.

But she had enough cash, and she owns her own home outright, that it was just *tight*, not devastating. When DH got news of a layoff in '09, and we went looking for less expensive places, she was able to *lower our rent* without it hurting her too much.

She's doing it right (she also only owns 4 properties). She's also still only in her 40s, just about 5 years older than me (oh the shame, LOL).


Your parents gambled in the wrong way. I don't want you to do that, too. (and we're just in the beginning of doing things the right way...we are NOT perfect, I'm coming from a very flawed model (mom was single without any possibility of savings and never had the time to teach us how to do things right, which is something that has become very obvious as I get older and think more about my childhood) as is DH, and we're learning together here)

 

[bumbershoot]

That's how we roll in my family.

Just wanted to let you know that you are probably having a good effect on the family members that don't/can't-quite live the lifestyle you do. DH and I are in a very different financial situation than my brother and his wife, but they are such a good example it's hard for it to not rub off. They are incredibly generous and non-judgmental of their family members, and somehow that just results in people wanting to do better in their own financial lives.

You're probably having a ripple effect just like my brother and sis in law. Just wanted you to know that.

 

[SaraJayne]

It's fun money. She gets to do what she wants with it. If she wants to spend 40% of her fun money on "frivolity" then that's her prerogative. She earned it. She gets to spend it.

And the uncle who wants to buy his wife a $500 electronic thingy burns thru his earnings to the point where he has to finance the darn thing instead of paying for it outright. Yep, I'd call that reckless spending too.

If that opinion applies to dvcgirl, then it applies to her Uncle.

It's his money...he earned it and can spend it however he wants, regardless if others think it's reckless.

 

[Where'sPiglet?]

Although I don't usually post I have spent a lot of time reading this board because I like finding money saving ideas. I am intrigued by all of the discussions on strict budgets, down to the penny spending tracking, and even people following "methods". Recently a friend mentioned something about her grocery budget, and I said that we don't budget and she seemed truly confused. So, I have been wondering....am I really so unusual in my money habits? I have no budget and I track nothing--I frankly couldn't tell you what I spend on groceries or anything else. I am just naturally thrifty(some might say "cheap") and we spend less than we make. Maybe being "cheap" is the best budget you can have?

I have a budget. The way I see it, the budget my spending plan. I make decisions about where I plan to spend my money before I get it.

I also track my spending. I do it because the tracking holds me accountable to how well I am following my plan.

I know that not everybody has a budget or tracks their spending. I do it because I have found a system that works for me at this point in my life.

 

[Swan4Me]

You either misread dvcgirl's post or you chose to misrepresent her numbers to make her look bad.

That $54K is what is left AFTER SHE PAYS HER LIVING EXPENSES AND PUTS MONEY INTO SAVINGS.

It's fun money. She gets to do what she wants with it. If she wants to spend 40% of her fun money on "frivolity" then that's her prerogative. She earned it. She gets to spend it.

And the uncle who wants to buy his wife a $500 electronic thingy burns thru his earnings to the point where he has to finance the darn thing instead of paying for it outright. Yep, I'd call that reckless spending too.

So what exactly is the point of learning DVCgal's income and budget?
I really want to know?

She is an atypical American

No Mortgage
**********No KIDS********
Huge income


I could have a triple investment portfolio if we hadn't done 12 years of private school & 4 years college x3

 

[Disneyliscious]

Tomorrow will come. Disneylicious' plan isn't carefree under any definition of that word. It's reckless. And I'm not picking on Disneylicious, just her plan. She seems just fine with her plan.

In the real world though, there are so many holes in it....it's mind boggling. Just because your parents planned poorly, doesn't mean that you have to plan in the same way. It sounds like they purchased too many rental homes and held far too little in cash. Rental home heavy and cash poor. They had no liquidity. And so when the real estate market crashed, and renters stopped paying, they didn't have the funds to cover the expenses. Perhaps they purchased a lot of the rentals with debt, and so they were reluctant to sell....or they just can't bring themselves to sell because they believe that their rental properties are "worth more" than current market values. But those rentals are worth only what someone else is willing to pay. That's what makes a market.

They had a plan, but they executed it poorly.

But that doesn't have to be your plan.

The plan you have works....until something goes wrong. Any little thing....or even worse, a major thing....like a disability, and you'd be in trouble. What if you can't farm the land. What if you have a bad crop. What if a disability brings massive medical bills (even just co-pays can wipe people out these days with a major illness)......then what?

A lot of Baby Boomers hold this same assumption....that they'll never be able to save enough, so why bother. They figure that they'll just have to keep working. Until they can't. Anyone over 40 knows that these mysterious little aches and pains start to appear around that age....by 50, it's a bit worse. 60 might be the new 50, but it's not the new 40.

And listen, I'm not picking on you. We're all adults and we do what we think is best for our family's situation. But I've always structured my financial life in a way that "covers my negatives". All of those "what ifs" that are out there....that can strike us at any time. I know we can't plan for everything, but we can act responsibly enough to at least try.

That's the only way I can put my head down on my pillow at night and get a good nights sleep.

I understand what you are saying, but I don't have $54K a year 'play money'. Thats not a stab, I just dont have it. I earn less in 2 years than your play money is for one year. Its a LOT easier for you to save than I.

For those who questioned the "what if an emergency" happens, I have livestock. If a car breaks down, you take livestock to the market. I'd rather have cattle in the field producing more livestock than money in the bank drawing low interest. One cow can easily net me a $1k calf per year (if I let it grow for 6 to 8 months). I wont get that in interest on $1200-$1500 the sell of the cow would bring me, so its better left in the field.

When I get too told to farm, I'll sell all my livestock and my farm (its a small farm) and live off that money. It may not be enough to get me through to my death.....but when is death?

Im not going to go out on a limb and say that a catastrophic event will happen in this world economy we have, but I will say that you haven't seen the worst of it yet and I do believe that when the time comes, you will have those who have saved nicely and those who have survival skills. They will inevitably assist each other. I hope the economy straightens out and people will get back to their lives, but I dare say it wont before it gets much, much worse.

Regarding my parents. I disagree that they gambled the wrong way. They have 6 properties and all are paid for. Their home is paid for. They purchased the land in the 80's and put homes on them when their money allowed (a few had homes on them already). It's not their fault that renters don't have jobs. Its not their fault that the law allows them nearly 60 days in most cases before they can be evicted without paying any rent. Its not their fault that renters destroy property which costs money to upkeep. If you say they are at fault for even choosing the path of rentals, then I guess the guy who worked at GM for 25 years before getting laid off with no pension/retirement was at fault as well. The stress of rentals is not worth the money and thus I don't want to follow in their footsteps.
As I said, I know my lifestyle isn't for everyone. I just enjoy the stress free way of it. I hope this posts clears up a few questions that others had.

 

[Marionnette]

If that opinion applies to dvcgirl, then it applies to her Uncle.

It's his money...he earned it and can spend it however he wants, regardless if others think it's reckless.

The difference being that dvcgirl spends less than what she earns and has savings to fall back on. I don't think that's reckless. No matter how much you don't like her. It doesn't make her a reckless spender when she spends a small portion of her annual take home pay on a trip or guitar strings.

Her uncle spends everything that he earns and then some. That's irresponsible and reckless, IMO. He spends money that he doesn't have.

 

[Marionnette]

So what exactly is the point of learning DVCgal's income and budget?
I really want to know?

She is an atypical American

No Mortgage
**********No KIDS********
Huge income


I could have a triple investment portfolio if we hadn't done 12 years of private school & 4 years college x3

So, because she makes more than the typical American, her opinion and ideas have no value?

I'd rather get financial advice from a rich person than from a poor person any day.

And BTW, no one held a gun to your head and forced you to pay for 12 years of private education when public school is free.

X3

Those were your financial choices in lieu of that triple investment portfolio.

 

[pixiechick]

The difference being that dvcgirl spends less than what she earns and has savings to fall back on. I don't think that's reckless. No matter how much you don't like her. It doesn't make her a reckless spender when she spends a small portion of her annual take home pay on a trip or guitar strings.

Her uncle spends everything that he earns and then some. That's irresponsible and reckless, IMO. He spends money that he doesn't have.

exactly, and we all pay the price for reckless spending.

 

[dvcgirl]

I understand what you are saying, but I don't have $54K a year 'play money'. Thats not a stab, I just dont have it. I earn less in 2 years than your play money is for one year. Its a LOT easier for you to save than I.

For those who questioned the "what if an emergency" happens, I have livestock. If a car breaks down, you take livestock to the market. I'd rather have cattle in the field producing more livestock than money in the bank drawing low interest. One cow can easily net me a $1k calf per year (if I let it grow for 6 to 8 months). I wont get that in interest on $1200-$1500 the sell of the cow would bring me, so its better left in the field.

When I get too told to farm, I'll sell all my livestock and my farm (its a small farm) and live off that money. It may not be enough to get me through to my death.....but when is death?

Im not going to go out on a limb and say that a catastrophic event will happen in this world economy we have, but I will say that you haven't seen the worst of it yet and I do believe that when the time comes, you will have those who have saved nicely and those who have survival skills. They will inevitably assist each other. I hope the economy straightens out and people will get back to their lives, but I dare say it wont before it gets much, much worse.

Regarding my parents. I disagree that they gambled the wrong way. They have 6 properties and all are paid for. Their home is paid for. They purchased the land in the 80's and put homes on them when their money allowed (a few had homes on them already). It's not their fault that renters don't have jobs. Its not their fault that the law allows them nearly 60 days in most cases before they can be evicted without paying any rent. Its not their fault that renters destroy property which costs money to upkeep. If you say they are at fault for even choosing the path of rentals, then I guess the guy who worked at GM for 25 years before getting laid off with no pension/retirement was at fault as well. The stress of rentals is not worth the money and thus I don't want to follow in their footsteps.
As I said, I know my lifestyle isn't for everyone. I just enjoy the stress free way of it. I hope this posts clears up a few questions that others had.

I completely understand your point about not having 54 grand of "play money".....I didn't take it as a stab either. I know we work hard, but I also completely understand that we're fortunate. And I also understand that you work very hard.....not knocking your $10 an hour job...not at all.

We've have many, many discussions on this board about it being far easier for higher income earners to be able to save and still have fun....to find that "balance". Finding "balance" between fun and savings just isn't easy on 20K a year. I get that....I really do.

As to catastrophic events....and all of that. I've got a bit of "doomer" in me too. At times, it's really paid off having that kind of personality. We pulled out of the market in late 2007....near the top, and got back in early in 2009...missed the bottom, but rode it down and it popped back very quickly. It's never a good idea to try and "time" the market, but I had a gut feeling that wouldn't go away....and my DH did too.

Having said that, this latest financial crisis has really frightened a lot of people into serious "doomer" mode....I'm talking "guns/ammo/rice/gold" mode. Just when the pack really gets into gold...the smart money is already moving out. It's just the way things work. Right now the housing market activity is almost all distressed sellers....and the buyers are scooping up these properties....with cash. To be successful, you have to learn to go against the grain.

I don't think that there's anything wrong at all in having "paid for" rental property.....but they sound like they're illiquid. And that's an issue when you're running rental properties to produce income. You need a hefty cash position. Good idea, but poor execution. I would have sold half the properties to free up some cash....beef up the nest egg, and wait for the values to return on the others before unloading it all.

The people who were laid off at GM after 25 years with a pension that wasn't what was promised....well, that's a whole different story. I feel sick for those people...same as I felt sick for the Bethlehem Steel workers, the Delta Pilots, the Delphi employees...on and on and on.