John T. Reed’s news blog

Rehab is really big among individual real estate investors. It is almost total bulls***. It is almost never profitable, almost always causes a loss on the cost of the rehab. In the typical case, the investors pays, say, $350,000 for the property then spends another, say, $8,000 fixing it up. Then he sells it two or three years later for $395,000 and says he made $37,000 profit on his $8,000 rehab. What a financial genius! In fact, The $45,000 appreciation almost certainly came from inflation and marketwide appreciation. In other words, probably all similar buildings, including those that were not rehabbed at...

CA homestead exemption increased On page 24 of my book  An American Principal Residence is the Most Advantaged Investment On Earth: Maximize Yours! I said that the homestead exemption for CA bankruptcies was $175,000 for seniors. It used to be. Now it is $600,000 for everyone. That is the highest state dollar amount in the nation. But seven states have potentially higher limits because they have acreage limits rather than dollar limits. DC has no limit at all.  The advantage of no prepayment penalties on principal residence mortgages Bonds other than US Treasurys have a clause named a call premium. That is what...

This is about using various legal entities for the purpose of avoiding having to pay a lot of money if you lose a lawsuit. It is called “asset protection,” although I note that appears not to be a recognized legal specialty. Here is how Investopedia (an investment, not a legal, site) defines it: What Is Asset Protection? Asset protection is the adoption of strategies to guard one's wealth. Asset protection is a component of financial planning intended to protect one's assets from creditor claims. Individuals and business entities use asset protection techniques to limit creditors' access to certain valuable assets while...

WSJ has another article on protecting your net worth from inflation. It is as dumb as the prior ones. . 1. WSJ seems to have a policy against mentioning the word hyperinflation. The only inflation that they acknowledge is possible is the 1970s-1980s rates in the teens. This may be because they are afraid of being thought kooky or afraid of being blamed for it as a result of having mentioned it. If you SEE the problem, you ARE the problem. 2. WSJ seems incapable of thinking outside the securities-Social Security-treasurys box. Since Social Security and Treasurys are USD-denominated, recommending...

One of the big disconnects between me and the various experts in the book In Pursuit of the Perfect Portfolio is I take an INSURANCE approach, NOT a yield-optimization approach.  (Those experts are Harry Markowitz, William Sharpe, Eugene Fama, John Bogle, Myron Scholes, Fischer Black, Robert Merton, Martin Leibowitz, Robert Schiller, Charles Ellis, Jeremy Siegel.) . In insurance, your COSTS are LOW (like a homeowners insurance premium) and your RISK of losing money is very LOW. For example, if you buy gold to hedge against inflation, it will do fine until the inflation ends, which it always does. At that time,...