Stock market or home improvements?

[KBScobravert]

Open for discussion. For hypothetical circumstances let’s say I have $50,000 in stocks (GE & JNJ split down the middle in value) and $10,000 in cash. I am thinking about cashing out the stocks and putting that money into home improvements.

The house is a 15-20 year home for my wife and I and the place where we are planning on raising our kids. With that said we do not foresee selling for quite some time.

If we left the stocks alone and let the ride the roller coaster of this economy or do we pull the stocks and compile the cash on hand to do some home modifications.

We are thinking:
Approximately 1,000 sqft of hard wood flooring ($6,500-7,000)
Retile the fireplace to match the kitchen and add a granite mantle ($800)
A back patio/deck around 400 sqft with a outdoor kitchen (grill, sink bar, fridge) and fire pit ($15,000)
Pulling up the paint on the garage floor and going with an epoxy ($4,000)
Adding a circular drive way to the front of the house 15’w x -200’L (no idea on cost yet so let’s say $15,000)
-----------------------------------or----------------------------------------------------------------
Building an additional building on our lot for a man cave, storage, recreation room, spare living quarters, garage (w/ in ground lift). By playing around on Punch Landscape it comes out to 32 x 42. And still doing a patio but bring its budget down to $7,000. Building will have to be bricked and trimmed to resemble the house.

I figure the building will eat the entire $60,000. If we go with the above listed improvements we will have money left over for savings or to use to play the market with.

I figure the addition of the second building will add more value to the home then the other improvements and we can always do the other improvements with savings later down the road.

For the purpose of discussion, saving increases by $2,000 a month.

[Broncojohnny]

You forgot a few things, how much did you pay for the shares and how long have you held them?

[slow99]

Cshd

[LANTIRN]

One thing you have to remember is when you put money into a house, you rarely ever get that back out of it when you sell. So if you spend $60,000 on upgrades, it will not add $60,000 value to the house. The only good thing is it will likely make it sell faster in a competitive market. That being said, the stock market isn't that great of a choice, either. But, I'll be the first to say I have a 401k, even though I don't trust the economy, because if I am wrong, it will pay off when I retire. If I am right, though, I loose the money. Or, you could buy physical gold and silver if you are wanting some kind of financial stability than the "awesome" dollar. Or buy Chinese yen; hell in 15 years we'll all be getting paid with that, anyway.

Also, don't forget about the taxes you'll be paying when you cash in the stocks. The govn't will probably take a good 40% of it so you really don't have as much as you thought to do home improvements on.

Honestly, if I had that amount of money at my disposal, I would see how much I'd have after taxes, and look at all my debts including the house. You could probably be debt free except for the house if you did that. Hell, if you've had the house a while you might be able to pay off the mortgage and use the mortgage payments to wipe out car and credit debt. Can't beat having a house paid for, that is for sure. Yep, this is the route I'd go.

[Broncojohnny]

One thing you have to remember is when you put money into a house, you rarely ever get that back out of it when you sell. So if you spend $60,000 on upgrades, it will not add $60,000 value to the house. The only good thing is it will likely make it sell faster in a competitive market. That being said, the stock market isn't that great of a choice, either. But, I'll be the first to say I have a 401k, even though I don't trust the economy, because if I am wrong, it will pay off when I retire. If I am right, though, I loose the money. Or, you could buy physical gold and silver if you are wanting some kind of financial stability than the "awesome" dollar. Or buy Chinese yen; hell in 15 years we'll all be getting paid with that, anyway.

Also, don't forget about the taxes you'll be paying when you cash in the stocks. The govn't will probably take a good 40% of it so you really don't have as much as you thought to do home improvements on.

Honestly, if I had that amount of money at my disposal, I would see how much I'd have after taxes, and look at all my debts including the house. You could probably be debt free except for the house if you did that. Hell, if you've had the house a while you might be able to pay off the mortgage and use the mortgage payments to wipe out car and credit debt. Can't beat having a house paid for, that is for sure. Yep, this is the route I'd go.

Sale of the shares will mean he pays his marginal rate, probably 25 to 28% for short term gains, if any, if he has held them less than a year. If he has held them more than a year the gains would be taxed at 15%.

Upgrades to the house can add value but only in certain areas. Real estate Nate would be a good source for statistics in this area of residential real estate but generally speaking, money spent in the kitchen offers a great return, while money spent on frivolous shit like swimming pools will net you close to nothing.

[slow99]

One thing you have to remember is when you put money into a house, you rarely ever get that back out of it when you sell. So if you spend $60,000 on upgrades, it will not add $60,000 value to the house. The only good thing is it will likely make it sell faster in a competitive market. That being said, the stock market isn't that great of a choice, either. But, I'll be the first to say I have a 401k, even though I don't trust the economy, because if I am wrong, it will pay off when I retire. If I am right, though, I loose the money. Or, you could buy physical gold and silver if you are wanting some kind of financial stability than the "awesome" dollar. Or buy Chinese yen; hell in 15 years we'll all be getting paid with that, anyway.

Also, don't forget about the taxes you'll be paying when you cash in the stocks. The govn't will probably take a good 40% of it so you really don't have as much as you thought to do home improvements on.

Honestly, if I had that amount of money at my disposal, I would see how much I'd have after taxes, and look at all my debts including the house. You could probably be debt free except for the house if you did that. Hell, if you've had the house a while you might be able to pay off the mortgage and use the mortgage payments to wipe out car and credit debt. Can't beat having a house paid for, that is for sure. Yep, this is the route I'd go.

Well, thank god the values of gold and silver never fluctuate! Also, if you figure out where to get some of that Chinese Yen, let me know.

[Broncojohnny]

QUOTE=LANTIRN;203411]Well, thank god the values of gold and silver never fluctuate! Also, if you figure out where to get some of that Chinese Yen, let me know.

See now, I wasn't going to say anything, it's Friday, I'm being cool over here, but there you go!

[LANTIRN]

Well, thank god the values of gold and silver never fluctuate! Also, if you figure out where to get some of that Chinese Yen, let me know.

Gold and Silver hold their value against inflation. If you are holding dollars and the economy tanks your money can suddenly be worth alot less. That can happen with metals too, but not as often. More often than not it works out to where you don't loose anything, or at least as much as you would with fiat money. And you can get chinese yen at most banks. Might have to give them notice but it's not hard; you get it the same way you would if you are traveling overseas and want to exchange money before you get to the other country so you have cash in hand.

[KBScobravert]

You forgot a few things, how much did you pay for the shares and how long have you held them?

I have held them for almost 20 years. All the capital gains have been paid and I think right now I am at a loss anyways. I am waiting don't have access to the statement right now to be 100% positive though.

This is just something I am brain storming and would not happen until at least the end of summer when work here dies down and I have more free time.

One thing you have to remember is when you put money into a house, you rarely ever get that back out of it when you sell. So if you spend $60,000 on upgrades, it will not add $60,000 value to the house. The only good thing is it will likely make it sell faster in a competitive market. That being said, the stock market isn't that great of a choice, either. But, I'll be the first to say I have a 401k, even though I don't trust the economy, because if I am wrong, it will pay off when I retire. If I am right, though, I loose the money. Or, you could buy physical gold and silver if you are wanting some kind of financial stability than the "awesome" dollar. Or buy Chinese yen; hell in 15 years we'll all be getting paid with that, anyway.

Also, don't forget about the taxes you'll be paying when you cash in the stocks. The govn't will probably take a good 40% of it so you really don't have as much as you thought to do home improvements on.

Honestly, if I had that amount of money at my disposal, I would see how much I'd have after taxes, and look at all my debts including the house. You could probably be debt free except for the house if you did that. Hell, if you've had the house a while you might be able to pay off the mortgage and use the mortgage payments to wipe out car and credit debt. Can't beat having a house paid for, that is for sure. Yep, this is the route I'd go.

That is good advice, thanks. The stocks have been paying their own taxes and have very little gains to speak of at this point. 3-4 years ago that would be a different story. The stocks are left over from a trust I set up in my name 15 years ago (long story how that happened) and the trust has held a tax number paying on gains/loss all along. It should be pretty close minus broker's fees. I also max contribute to my Roth IRA each year.

Like I said we will be in the house for years to come so it is less for investment and more for enjoyment. That and I am the in the bottom 10% as far as home value goes in my neighborhood. All the houses around me are roughly valued at 20-30% more than I am. I see that as a good thing if we ever DID have to sell. But I don't see that.

As far as debt, our mortgage is all the debt we have. No car or truck payments, no credit card balances, no revolving debt at all, just mortgage, vehicle insurance and utilities. That $60,000 would not go very far in paying the house off put we do contribute $5,000 extra a year to the mortgage to reduce our payment months off the back end.

I kind of like the sitting on gold idea and if was going to go that route I should have really done it back in 2007 when it was $650+/- an ounce. I actually considered casing out and buying straight gold and looking at the numbers today I want to punch myself in the sack.

[slow99]

Gold and Silver hold their value against inflation. If you are holding dollars and the economy tanks your money can suddenly be worth alot less. That can happen with metals too, but not as often. More often than not it works out to where you don't loose anything, or at least as much as you would with fiat money. And you can get chinese yen at most banks. Might have to give them notice but it's not hard; you get it the same way you would if you are traveling overseas and want to exchange money before you get to the other country so you have cash in hand.

Thanks for the lesson! I would bet anything that you can't get Chinese Yen.

[Hmbre97]

white people problems

[LANTIRN]

I have held them for almost 20 years. All the capital gains have been paid and I think right now I am at a loss anyways. I am waiting don't have access to the statement right now to be 100% positive though.

This is just something I am brain storming and would not happen until at least the end of summer when work here dies down and I have more free time.



That is good advice, thanks. The stocks have been paying their own taxes and have very little gains to speak of at this point. 3-4 years ago that would be a different story. The stocks are left over from a trust I set up in my name 15 years ago (long story how that happened) and the trust has held a tax number paying on gains/loss all along. It should be pretty close minus broker's fees. I also max contribute to my Roth IRA each year.

Like I said we will be in the house for years to come so it is less for investment and more for enjoyment. That and I am the in the bottom 10% as far as home value goes in my neighborhood. All the houses around me are roughly valued at 20-30% more than I am. I see that as a good thing if we ever DID have to sell. But I don't see that.

As far as debt, our mortgage is all the debt we have. No car or truck payments, no credit card balances, no revolving debt at all, just mortgage, vehicle insurance and utilities. That $60,000 would not go very far in paying the house off put we do contribute $5,000 extra a year to the mortgage to reduce our payment months off the back end.

I kind of like the sitting on gold idea and if was going to go that route I should have really done it back in 2007 when it was $650+/- an ounce. I actually considered casing out and buying straight gold and looking at the numbers today I want to punch myself in the sack.

No problem. Hindsight is a bitch, that is for sure. I keep doing the same thing when I think of old gold and silver prices and all the crap I used to spend money on. Oh well.

In that case if it won't go far in paying off the debt, and the upgrades are for enjoyment, I'd either do the upgrades or buy some physical silver, or a combination of both. I mean if you are going to be living there for a long time might as well make it what you want it if you can afford to.

[LANTIRN]

Thanks for the lesson! I would bet anything that you can't get Chinese Yen.

Chinese currency, you dick.

[KBScobravert]

Sale of the shares will mean he pays his marginal rate, probably 25 to 28% for short term gains, if any, if he has held them less than a year. If he has held them more than a year the gains would be taxed at 15%.

Upgrades to the house can add value but only in certain areas. Real estate Nate would be a good source for statistics in this area of residential real estate but generally speaking, money spent in the kitchen offers a great return, while money spent on frivolous shit like swimming pools will net you close to nothing.

I have owned them for roughly 20 plus years. I am okay at 15% but would have to get with Patrick to run the actual numbers for me.

Nate is a great source for stats ecspecially since he sold us the house. LOL He knows exactly where we are. Since we moved in I have upgraded all appliances in the kitchen to Bosch/Jenair etc, installed granite counters and tile backsplash. We have put in over 450' of wrought iron fence and a bunch of other little upgrades like A/C in the garage etc. Not that I want the house reappraised since we are not looking to sell but I am confident we have done well so far.

There will be no swimming pool if I can help it. The wife wants one but I just don't see it. I would rather have my man cave instead.

[SVT Lurch]

white people problems