Sorry about you losing your stuff. That blows. I see you are in NJ. Is it from Sandy or just the way it always is?
As I just told Jill, I was going by one house I love in PBC. It's pretty much the only house in S. FL that I could conceivably be even vaguely interested in spending $10M on so that was my model. I forgot to state it was just for this one home.
But while I can make an argument for getting a $10M house...barely, it chafes me to even attempt to make an argument for paying $200K for property taxes. Not. Happening!!!!!!
I will not willingly hand over a ridiculous amount of money just because Florida is warm. For $200K a year I can buy a couple extra heaters and put in radiant flooring. Problem solved. For 200K I can buy someone a house!!
As for inflation, the milk and steak comments were jokes. Because here's the thing., my dad was a partner at PWC until he retired. I took accounting to understand it better and because I knew it would be helpful whether or not I followed his footsteps. The only subject I found more boring than accounting was calculus and perhaps geology. I think if I had to sit and stare at numbers all day I'd have killed myself. And taking the course didn't make his stories any more exciting...only vaguely interesting. Haven't gotten up the nerve to ask him why PWC missed Madoff. That at least should be interesting.
Anyway, he would tell me what you're saying now, you're losing money if you do not meet X, Y,Z%. My way of doing it would be only marginally better than keeping it under a mattress, in his eyes. And probably yours.
I'm aware of the facts...to some extent. Currency devaluation and inflation are going to erode your net worth if you aren't smart about it. What I'm saying is, rightly or wrongly, I don't care. Will I die with less money than I could have had. ABSOLUTELY. But as long as there was enough coming in to cover my expenses, make me have a little fun, take care of loved ones and leave college funds for their kids, I'm okay with that. My reasoning might give him a stroke, and because of that, I may change my mind about that later.
If the interest payments cover my expenses and inflation rates, great. If it's more, I'll be ecstatic. If it's less, I'm okay dipping into the principle once in a while to cover the net loss. As long as I am reasonable about it, and I don't have to worry about being 80 and destitute, that's all I ask.
Warren Buffet I am not.
I accept my limitations and my hatred of accounting I've made allowances for that.