The Big Short

PHeller wrote: I think the tough thing is for many young professionals we're told that the best way to move up the salary ladder is to switch jobs, and yet we're told not to buy unless we're stable for 5+ years. We want to stay mobile as to pursue the best opportunities, but are we losing money by not owning? Long term, are we better to search out the best paying job with 5 year terms and rent, or stay content with our salaries and buy?

Similar situation here. Could probably make more money climbing the ladder, but at what cost? For now I've decided I am content to make a "comfortable" living in an entry level type job with lots of stability and security vs chasing career advancement and increased likelihood of job loss or having to uproot my life.

My advice would be to find a place where you're happy and comfortable and build a life there. To each there own, YMMV, etc.

I'll have to check out the movie when I get a chance

STM317 wrote:

PHeller wrote: I think the tough thing is for many young professionals we're told that the best way to move up the salary ladder is to switch jobs, and yet we're told not to buy unless we're stable for 5+ years. We want to stay mobile as to pursue the best opportunities, but are we losing money by not owning? Long term, are we better to search out the best paying job with 5 year terms and rent, or stay content with our salaries and buy?

Similar situation here. Could probably make more money climbing the ladder, but at what cost? For now I've decided I am content to make a "comfortable" living in an entry level type job with lots of stability and security vs chasing career advancement and increased likelihood of job loss or having to uproot my life. My advice would be to find a place where you're happy and comfortable and build a life there. To each there own, YMMV, etc. I'll have to check out the movie when I get a chance

Do you want your job to pick your life or do you want your life to pick your job? (I'm not trying to be facetious here).

Its a honest question that I think everyone should consider early in their careers. As you have already noted, sometimes a bigger salary comes with unintended consequences.

BTW - I still think job hopping is "short term gain long term loss". Sure, you may feel like you get faster salary increases at first, but 20 years in when you have worked 10 different jobs it gets hard to be hired since everyone knows your plan is to jump ship at the first intriguing offer. Even if it isn't your plan anymore, they will still think it. Also, it generally takes businesses usually about 1-2 years to figure out someone isn't successful in a role, so if you have a string of 2 year roles on your resume that can actually look like disaster.

I'm not talking job hopping for 20 years, I'm talking about job hopping earlier on to find that good employer.

In my current case, in 5 years I might be looking to move up, and that means either switching within corporate entities or moving to a new company.

I actually don't mind moving, I'm excited by it. What I hate is renting a small little apartment. If I could move to a new city every 5-10 years and increase my salary while renting sweet houses, that'd be awesome.

Sorry, wasn't trying to say you were or were planning to do what I described. Just trying to voice a bit of what I have started to see with peers who have moved around a lot.

I suppose I'm letting my life shape my career more than I'm letting my career shape my life. That may change in the future if I become unhappy with my situation. Everyone has to choose their own path. Ultimately for me it boils down to happiness. I say if you're happy now, then keep doing that for as long as you're able. If you're not happy, then it's time for a change.

Anyway, weren't we talking about banking and movies and movies about banking?

STM317 wrote: I say if you're happy now, then keep doing that for as long as you're able. If you're not happy, then it's time for a change.

That's good advice about most life decisions

pinchvalve wrote: All I know is that I bought a house years ago, well before the bubble burst, and I was approved for a mortgage that was well above what I could afford. I said "that is 2.5x more than I can afford per month" and they kinda shrugged at me....

Furious_E wrote: In reply to pinchvalve: I don't know how much better that's gotten since the market crashed. I was pretty stunned at how much the bank was willing to lend me when I first went through the whole mortgage pre-approval process a few months ago.

I used to think it was just enough rope to hang yourself, which is what it is. Banks have no problem lending you enough money to send you into bankruptcy.

Consider this, you buy too much house. You work your butt off for 5 years or so and barely afford it. Something happens. You then start selling assets to make the payments. You finance other bills and extend yourself further to make the house payment because you have to have a place to live. Then, you reach the end of your rope...let's say 8 years out.

Consider the situation. You purchased a house 8 years ago. You've probably maintained it. In the meantime it's value has gone up as real estate is wont to do. So you've made payments on a house for 8 years that has gone up in value since purchase. All that equity? It's gone the minute you're foreclosed on.

Where's the bank? They're out the original purchase price of the house but you've been paying to the tune of right around 100 payments of whatever price you agreed to. They pretty up the house and sell it. Unless the market has really cracked, like in 2008, they're still making money on the deal as the house has appreciated and payments were made. Even if the house sells for that 8 year old price you purchased it for they have the 100 or so payments you made in the meantime. Multiple this times a nation of homeowners. It's good money.

Be careful out there folks.

The message in this movie that has gone unheeded is the same one that almost sunk the protagonist.

The market was never unaware or incompetent regarding the housing market situation, what they were was crooks. The growth and eventual collapse of the pyramid scheme was not unforeseen and it certainly could not have been a surprise, it was fully planned right up to the point where they knew that their Washington DC division would step in and drop the bill on the taxpayer in order to complete the perfect ponzi scheme.

Zero interest rates were simultaneously enacted in order to prepare for the next spin. I give it two years.