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mexipat

Feb 26, 2012, 6:43 PM

Post #51 of 76 (5098 views)

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Re: [morgaine7] This is too much.

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I don't understand why owning in Mexico is a safety net, especially for those of us over the age of sixty. . Safety from what? I've just rented a condo for a year for 600 dollars a month. If I live here for ten years, it's still a lot cheaper than a house. Several years ago, I might have agreed but, with rents so low, I think it pays to hold onto my cash and rent.


morgaine7


Feb 26, 2012, 8:28 PM

Post #52 of 76 (5073 views)

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Re: [mexipat] This is too much.

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Well, $600 a month is $72K over ten years, even assuming your rent stays the same. I spent about $90K buying and remodeling my house, so if I can sell it for $18K at the end of ten years, I'm even with you. If I can sell it for more, I come out ahead.

By "safety net" I meant safety from suddenly finding myself on the street if I run into cash flow problems, and safety in having something to work with if my circumstances change permanently. That to me is more important, not less, as I get older. When I was younger and working, I valued mobility above all else. Now in my 60s, I don't want to worry about rent increases or leases not being renewed. Mexico really has little to do with it, except that ownership without debt was a viable option here.

Kate


CanuckBob


Feb 27, 2012, 6:26 AM

Post #53 of 76 (5021 views)

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Re: [morgaine7] This is too much.

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Kate, you forgot to factor in what your 90K would have earned you invested somewhere else. At 5% per annum your 90K would earn you $45,000 +, over that 10 year period. Given the current economy and crime situation it would be doubtful you could sell your place for much more than you paid for it 10 years ago (and maybe less) so the difference between owning and renting is not that far off. You also need to factor in all your maintenance costs, etc. etc.........

Bob
Inside Lakeside
http://www.insidelakeside.com


morgaine7


Feb 27, 2012, 9:24 AM

Post #54 of 76 (4967 views)

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Re: [CanuckBob] This is too much.

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Bob, I see your point, but crime isn't much of an issue in my location, and you seem to be assuming I'd have to sell to a foreign buyer, which isn't the case. Since the house is newly remodeled, upkeep costs are minimal: fideicomiso fee, tree trimming, and property tax probably total about $500 per year.

I was making a simple (simplistic, really) comparison, and it's true that I didn't factor in the cost of withdrawing from other investments. But remember, the cost of renting has to come off that mythical 5% earnings each year. Adding 5% to my $90K house money, in the first year I'd have $94.5K. Subtract $5K I'd have paid in rent (probably a realistic figure), and we'd have $89.5K. In the second year, adding 5% makes that $93,975 minus $5K or $88,975K … and so on. Arguably, it could work out so that the invested $90K would remain at $90K over the years, but it wouldn't accumulate and compound at 5% per year because I'd be paying about 5% or more each year in rent.

In real life, of course, my $90K would have tanked by 30% or more the first year if I'd left it in retirement mutual funds instead of withdrawing it for the house in 2007. The rest of my money is still recovering. That was coincidental, though, and certainly didn't involve any foresight on my part!

Kate


Vichil

Feb 27, 2012, 11:21 AM

Post #55 of 76 (4924 views)

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Re: [CanuckBob] This is too much.

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I wish I made 5% on my investments.... Give me a house any day.


(This post was edited by Vichil on Feb 27, 2012, 11:21 AM)


cbviajero

Feb 27, 2012, 12:26 PM

Post #56 of 76 (4908 views)

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Re: [Vichil] This is too much.

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Me too Vichil,the recession has had a very negative effect on alot of folks retirements,mine included,I like the sense of security that owning our home gives my family and me,when I retired in 2005 I figured a 5% return would be easy to achieve without risking your principal,did'nt happen.
Chris


YucaLandia


Feb 27, 2012, 2:50 PM

Post #57 of 76 (4870 views)

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Re: [cbviajero] This is too much.

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The mythical 5% per year guaranteed return - would that it were true.

People who quote Dow Jones averages over time to show a 5% per annum return, conveniently forget that when Bomark, or Wang, or National Lead Co, or General Motors go out of business and their stock values go to ZERO $$$ in our portfolios - the Dow Jones folks simply delete the bankrupt company from their index and plug in a new "equivalent" company into their mix - substituting a new full $$ values stock in place of the zero$ company - deleting the clunker dead-horse company from their calculations as if it never existed. The stock indexes are also not actual averages of the stock prices, they are weighted values - scaled averages - adjusted to try to maintain a constant valuation for a group of 30 big companies - not even actually industrial companies.

So, out of the whole mix of actual Dow Jones Industrial companies, there is only 1 firm remaining: General Electric.
All of the others have disappeared. So, to get a 5% return in the markets, you must keep changing horses to get the claimed returns - timing your sells to dump the clunkers before their losses are too big, and picking and buying the latest "strong reliable" company. This kind of market timing is tough to do successfully over the long term - requires research, persistence, and work.

If you bought the Dow Jones Industrials at 11,500 back in January of 2000, you would have an inflation adjusted return of 27,048 on the Dow Jones to get the proposed 5% real return . and yes, the markets have currently recovered from the 2008 crash. But since the Dow Jones is actually at 12,800, the stock market is still 3,500 points behind inflation for the past 12 years - which means if you did a simple buy and hold strategy back in 2000, you would be at a 28% loss due to inflation...

Has Mexican land lost a net 28% over the past 12 years?

Re land in Mexico:
It's tempting to use US experiences to try to draw conclusions about Mexican land/property ownership, but this can be a pretty shakey approach. Property taxes and capital gains taxes are very very different beasties NOB and SOB. Home property taxes here in Yucatan weigh in at around $25 USD per home versus $1,000's per year in USA. This means that if you don't like the selling prices this year, it costs almost nothing to wait a year or 2 for the prices to recover in Mexico, while in the USA the taxes, insurance and utilities costs for a few years waiting can cost more than a US home's equity.

Mexicans also seem to view land very differently than Americans. Some Americans change properties as often as they change cars. The Mexicans I know keep land in the family for generations, buy small undeveloped properties very cheaply (as little as $500 inside the municipalidad in the 1990's), and now said properties are worth $30,000 to $35,000 dollars - a bit higher real returns than the 5% per year return quoted above. Mexican also tend to pay cash on the barrel-head - because mortgages cost so much - making Mexican property markets far far more stable than US markets.**

US costs generally include wicked minimum monthly charges for water, gas, electric, and sewer whether you use them or not. We pay about $120 a month on our US home - using no water and basically no electricity - for the privilidge of being connected to the services- This means that we pay about $3,500 dollars to have a US house sit empty - while an equivalent Mexican home costs $25 a year to sit empty.

Insurance needs and costs are also very different NOB and SOB. A typical wood house in the US really should be insured for storm or fire damage, vs negligible risks for concrete & tile Mexican homes. yada yada yada

For all these reasons, simple 1 for 1 comparisons between US and Mexican reasons just do not track, whether the choice is to rent or buy - invest in stocks or real estate.

If you choose well, buying Mexican real estate can pay off very nicely (due to inherently more patient stable markets**) or real estate investments can go stinko, if you choose some trendy area that later has problems or goes out of favor.
steve


**Because Mexicans pay cash on the barrel-head - the markets here really are more stable because there is none of the ubiquitous USA BS of mortage resale markets, negative interest loans, 30X-40X margin borrowing on bundled mortgages, credit default swaps, junk mortgages, second mortgages, no money down purchases, Adjustable Rate Mortgages, balloon payments, etc etc. All of that junk really does make US home ownership very very different from Mexican home ownership. Simplicity really can be better sometimes.
-
Read-on MacDuff
E-visit at http://yucalandia.com

(This post was edited by YucaLandia on Feb 27, 2012, 3:41 PM)


CanuckBob


Feb 27, 2012, 2:58 PM

Post #58 of 76 (4860 views)

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Re: [Vichil] This is too much.

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Fortunately for me I was still investing right through the crash and picked up some really good deals in 08/09. My average ROI from 2007 to present was/is 6%. I guess everyone has a different story and you really need to stay on top of things during these turbulent times. I do fee sorry for those that didn't see it coming and/or didn't have a good portfolio manager to minimize the damage to their retirement funds. The bright side is the DOW is back to the highs of early 2008 so most should have a lot of their losses back.

On the other hand those that bought real estate around Lake Chapala in 2007/08 have seen their investment decline by a significant amount and unfortunately I don't think it is even near the bottom yet. By the time the dust settles those people could be down 30%-50% should they choose or need to sell within the next few years.

Bob
Inside Lakeside
http://www.insidelakeside.com


CanuckBob


Feb 27, 2012, 3:01 PM

Post #59 of 76 (4857 views)

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Re: [YucaLandia] This is too much.

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you must keep changing horses to get the claimed returns.


Absolutley correct.

Bob
Inside Lakeside
http://www.insidelakeside.com


cbviajero

Feb 27, 2012, 3:42 PM

Post #60 of 76 (4839 views)

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Re: [YucaLandia] This is too much.

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There's a good reason mexicans view property ownership differently than nob,it's been the safest investment you could have here ,"el patrimonio", in my case I sleep better at night knowing that my wife and son will always have a roof over their heads.
Chris


YucaLandia


Feb 27, 2012, 3:52 PM

Post #61 of 76 (4835 views)

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Re: [CanuckBob] This is too much.

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If you go back and see the edit I was making while you were writing your good reply, the market would have to be at 27,000 now to get an inflation adjusted 5% annual return for investments in the Dow Jones Industrials made in January of 2000.

Tough to do.

** GOOD FOR YOU make such good choices!
-
Read-on MacDuff
E-visit at http://yucalandia.com

(This post was edited by YucaLandia on Feb 27, 2012, 3:55 PM)


robt65

Feb 27, 2012, 4:12 PM

Post #62 of 76 (4824 views)

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Re: [morgaine7] This is too much.

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Hi Kate,

I agree with you 100% Home ownership without debt is a really good and comfortable feeling. Canuck Bob speaks about how you forgot about one thing . . . .investing your money . . . . . . now there's a really safe haven that we are all reminded about daily in the news (tongue in cheek)! I'm with you . . . . . All I have to do is pay my taxes and utilities and I am very comfortable. If something should happen to social security and it goes by the by and by or if my military pension go’s poof, I still only have to pay my utilities. Also like cbviajero, I sleep a whole lot better knowing my daughter will have a home bought and paid for after I pass through the pearly gates!

robt6t5


(This post was edited by robt65 on Feb 27, 2012, 4:18 PM)


mexipat

Feb 29, 2012, 8:00 PM

Post #63 of 76 (4687 views)

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Re: [YucaLandia] This is too much.

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I'm more comfy keeping my cash and renting in Mexico. For most folks, holding property for many years is as unrealistic as holding the stocks. Health reasons send a lot of people back to the home country with big real estate losses when they have to sell immediately.

As to the stock analogy, very few go directly from the Dow to a value of zero. Usually, they lose the Dow status on the way down. You don't have it's value reduced to zero. Also, did your analysis include dividends?

I think we all end up doing what allows us to sleep at night.


CanuckBob


Mar 1, 2012, 9:14 AM

Post #64 of 76 (4613 views)

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Re: [mexipat] This is too much.

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Agreed. I have not had any problems maintaining a 5% average return right through 2008/09. Yes, I am including dividend payments. Those that lost a lot in the crash either didn't react in time (or their financial people didn't) and/or were heavily invested in the riskier side of things. At the worst point, I was down 24% but by moving some money around and purchasing some "deals", that loss was easily recovered and then some, by 2010.

Bob
Inside Lakeside
http://www.insidelakeside.com


yTABDGdW

Mar 10, 2012, 4:02 AM

Post #65 of 76 (4412 views)

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Re: [CanuckBob] This is too much.

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More fear from CBC:

http://www.cbc.ca/news/canada/story/2012/03/08/mexico-canadians-killed.html?cmp=rss

http://www.cbc.ca/news/world/story/2012/03/06/mexico-resort-security.html

http://www.cbc.ca/news/yourcommunity/2012/03/what-is-your-story-of-mexico.html


(This post was edited by Memo on Mar 10, 2012, 4:05 AM)


YucaLandia


Mar 10, 2012, 6:36 AM

Post #66 of 76 (4386 views)

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Re: [Memo] This is too much.

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This quote from the first CBC article seems to sum it all up:


Quote

Wathelet is one of at least 35 Canadians murdered in Mexico since 2000, according to data from the Department of Foreign Affairs and media reports. Three have been slain this year alone, and a Calgary woman was severely beaten in January at a Mazatlan resort. An estimated 1.6 million Canadians travelled to Mexico last year


This rate works out to roughly ~ 0.25 : 100,000 Canadians per year killed in Mexico. Do others find this shocking ?

Canada's most recent official annual murder rate is XXX 1.9 per 100,000 .


This means that ~ XXX 266 Canadians would have to be killed in Mexico during the 10 yr period when 35 actually died,
to match Canadian homicide rates..


Which seems to say Canadians are roughly XXXX 7.6 times safer visiting Mexico than staying back home?


So, Memo's point seems to be: Canadians, COME TO MEXICO ! ~~ It's SAFER in Mexico! ~~

==========================================
**Note: The XXX's are inserted to show that I inadvertently pulled the Canada's Violent Crime rate data, from one row above Canada's Homicide rate in the original post. This version has the correct official Canadian Govt. data from "Canadian Crime Data 2006", Statistics Canada, March 7, 2008. ... My apologies for extracting the wrong number.
-
Read-on MacDuff
E-visit at http://yucalandia.com

(This post was edited by YucaLandia on Mar 10, 2012, 8:00 AM)


sioux4noff

Mar 10, 2012, 7:10 AM

Post #67 of 76 (4368 views)

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Re: [YucaLandia] This is too much.

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Quote
Canada's annual home murder rate is 951 per 100,000 .


Maybe I'm missing something, but that is roughly 1,000 out out every 100,000 people. Using basic math, that is 1 out of 100. Really, 1% of the population of Canada is murdered yearly?
Where did that statistic come from?


yucatandreamer


Mar 10, 2012, 7:36 AM

Post #68 of 76 (4348 views)

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Re: [sioux4noff] This is too much.

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According to a Canadian Government website http://www4.hrsdc.gc.ca/.3ndic.1t.4r@-eng.jsp?iid=57 the figure of 951 refers to violent crimes but not homicide. The homicide rate at its highest in 1975 was 3.03 per 100,000. Actually Canada is a pretty safe place.


YucaLandia


Mar 10, 2012, 7:40 AM

Post #69 of 76 (4346 views)

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Re: [sioux4noff] This is too much.

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In Reply To

Quote
Canada's annual home murder rate is 951 per 100,000 .


Maybe I'm missing something, but that is roughly 1,000 out out every 100,000 people. Using basic math, that is 1 out of 100. Really, 1% of the population of Canada is murdered yearly?
Where did that statistic come from?


Perfect !

I pulled data from one line too high in the Canadian Govt report - accidentally using "Crimes of Violence" rates vs. "Homicide" rates. Thanks for the correction!

I'm fixing/editing the post above to correct the error - as I don't want to falsely contaminate future reader's perceptions about Canada's reported 1.9 homicides per 100,000 Canadians.
"Canadian Crime Data 2006". Statistics Canada, March 7, 2008.

Doesn't this still mean that ~ 266 Canadians would have to be killed in Mexico during the 10 yr period to match Canadian homicide rates, while 35 actually died ?
steve
-
Read-on MacDuff
E-visit at http://yucalandia.com

(This post was edited by YucaLandia on Mar 10, 2012, 8:05 AM)


arbon

Mar 10, 2012, 7:44 AM

Post #70 of 76 (4339 views)

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Re: [sioux4noff] This is too much.

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This is too much.
~~~~~~~~~~~~~~~~~~~~~~~



(This post was edited by arbon on Mar 10, 2012, 7:48 AM)


arbon

Mar 10, 2012, 9:18 AM

Post #71 of 76 (4302 views)

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Re: [YucaLandia] This is too much.

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Son of Duff,

Canadians spend more time in Canada, than in Mexico per year.

¿Does that help you understand, how safe Canada is?
~~~~~~~~~~~~~~~~~~~~~~~



Reefhound


Mar 10, 2012, 9:43 AM

Post #72 of 76 (4287 views)

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Re: [arbon] This is too much.

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Yep, you spend 51 weeks in an area you're probably more likely to experience crime in a given year than if you spend one week. So let's multiply the tourist rate x 51 and compare.


Gringal

Mar 10, 2012, 11:37 AM

Post #73 of 76 (4252 views)

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Re: [Reefhound] This is too much.

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"Safety"is an interesting question. For one thing, most of the people posting on here are going to die from one cause or another within the next decade or two. Some, because they didn't take care of their bodies and died from the results. Some, because they just drew the bad luck card. Of all of them, very few are going to die due to the violence which seems to increase daily in Mexico.
Without playing the "Appointment in Samarra" scenario.........none of us are going to get out of this alive.

Let's say that even the "safe" areas of Mexico become unsafe and there's a narco nest in every town. Where, oh where, do you think you can go to escape violence? I'm reading stories in the U.S. papers about teenagers in small Midwestern towns where people used to leave their doors unlocked. Now, their kids are getting mowed down in the local school. These aren't inner city schools where violence has traditionally been focused. This is something new......and rightfully scary.

So ............where you gonna go, anyway? Back to the fifties? Sorry all; time and the culture has moved far, far away from those days.

Buying or renting gets down to an economic question. One thing about owning a house: you can take in boarders if you need to. No landlord's permission to do that, or just about anything else you've a mind to. Here's another one: Your landlord is entitled to raise your rent 5% per year. If said landlord does so, you're going to have an unhappy landing in 5 or more years.

In conclusion.......this mobility some seek for the sake of "safety" is ephemeral. There really is no place to hide.

At the same time, I believe that renting when first moving to an area makes more sense than buying. Takes awhile to find the right spot.


(This post was edited by Gringal on Mar 10, 2012, 11:39 AM)


arbon

Mar 10, 2012, 1:00 PM

Post #74 of 76 (4229 views)

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Re: [Gringal] This is too much.

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n' then there's the relatives from California, and Mexico that think peaceful places in Canada should advertise.

(some things don't change)
~~~~~~~~~~~~~~~~~~~~~~~



careyeroslib

Mar 10, 2012, 5:09 PM

Post #75 of 76 (4166 views)

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Re: [barnowl] This is too much.

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I just skimmed this thread, so forgive me if my comments are superficial, but a few things leaped out to me as a Canadian. I shall be as brief as possible.

1) Some people on this Forum seem to be confusing Canadian Media comments with what real Canadians think. I was trying out an Internet TV program the other day so I happened upon a "lovely" CBC documentary on violence in Mexico. I was disgusted and turned it off. I don´t know why CBC is so fixated on this but I can do nothing about but try to talk to my friends and neighbours.

2) Canadians are as diverse in every way as Americans, and perhaps more so. So, surveys may not tell all accurately.

First, Canada is officially bilingual (French and English) so, not unexpectedly, there is much resentment that a person can´t be part of the federal government in Canada, politically or as a senior bureaucrat or diplomat without speaking at least functional French and English. One entire province is like another country (Quebec). You need to speak French to feel at home there. Many signs are in French only. There have been violent separatist movements there in the past which, from my perspective, I am glad have so far failed. I like Quebec. Also, so many Quebeckers come here to Mexico. They know how to adapt. They are willing to speak another language which is what they have had to do in Canada.

Secondly, Canada is diverse in most other ways. In the city where I was born and raised (Toronto, Ontario), well more than half were born outside of Canada. Toronto is also a city that pioneered gay rights, including gay marriage. But there are also vast areas where everybody speaks English. They are ranchers and fishermen, townspeople in picturesque villages, not quite understanding what is happening in Canada. We also have Indians and Eskimos feeling totally disenfranchized. Our current Prime Minister (Stephen Harper) is extremely right wing. Extremely. But even he has to speak French. Canada spans from sea to sea to sea (Artic Ocean as well).

My point is that Canadians do not speak with one voice. Please don´t tar us all with the same brush. (Is that the correct expression?)
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