Yes, I can write a check and I know how to buy stamps. But I do appreciate the convenience of working online, and I like knowing my payment will be received almost immediately.
That’s why I prefer making online payments and handle all of my bills this way. Plus, with online setups, there are a lot more bells and whistles to check out when it comes to your accounts.
Take, for instance, our mortgage. I can go online to USAA and not only see at a glance all the information I could possibly want to know about our home loan, but also take a variety of actions in order to manage my account.
One of the coolest features about USAA’s online system is that I have access to some nifty tools — including a Home Value Tracker gadget.
Yes, this is totally addicting.
Of course, it’s unlikely to be 100% accurate and if I wanted to get a precise number I’d probably need a professional home appraisal. But that costs money and since I’m not planning on selling anytime soon, I’m happy to use USAA’s reasonable estimate.
I’m even happier to use it when it tells me that our home value has increased by thirty thousand dollars since we bought two years ago.
And realistically, between the teensy amount of our 30-year mortgage that we’ve paid off in that time, the improvements/updates we’ve made to the house, and what we’re watching comps in our neighborhood sell for, we probably have closer to $50,000-$60,000 worth of equity in our home.
All because of when we bought. Thank you, excellent luck in timing the market.
How Tracking My Home Value Makes Me Want to Keep Timing the Market…
As some of you may know, we scored a ridiculous deal on our home when we bought it — which is the only reason we bought a house when I was 22 and a few months before my spouse and I were actually married.
We didn’t want to miss out on a good opportunity. Or good timing. And we got lucky in this case because we were able to time the market brilliantly.
It’s amazing to me that markets can work this way. When we bought, the housing market was so bad in our area that we not only got a very low price on the home, but the sellers also did additional work on the property per our request after the home inspection and paid every bit of the closing costs.
They did all this even though they were already underwater on their mortgage. Even the real estate agents made concessions by lowering their fees on the sale.
Talk about a buyer’s market.
Tracking our home value over the last two years has made timing the market in other ways, with other investments, so tempting. I can completely understand why people talk about doing this when buying stocks, bonds, and other assets now that I’ve seen first-hand how exciting it is to get lucky enough to get it right.
But that’s just it. Ultimately, we just got lucky. The stars just so happened to align in such a way that we were in the right place at the right time.
…And Why I’m Ignoring the Temptation to Do So
That’s exactly why I would never purposely attempt to time the market with any other investment. There is no way to accurately predict — 100% of the time — what any market will do next.
Which is why I say we got lucky with our timing when it came to buying a home. The market could have taken another dive and just like that, we would have been underwater with our own mortgage. And who knows? The market can — and will — plummet again in the future and wipe whatever equity I have today completely away.
I get the temptation to time the market. You’re looking at a huge, easy payoff if you get it right. But that’s the trouble: it’s impossible to get it right time after time after time.
So if you happened to get lucky once, as we did, be thankful for it and then stick with the sensible plan when it comes to your investments: don’t get caught up in timing the market.
Instead, make steady, regular contributions to things like your investment and retirement accounts. If you want to get into real estate, consider other important factors before you start trying to time your purchase.
You know, stuff like… do I actually have a sizeable down payment? Can I afford a monthly payment? If I want to rent this home out, do I have any idea what I’m doing when it comes to rental properties?
We Bought Low — Can We Sell High?
The hope is that we’ve done a fantastic job of buying low. The next step is to sell high.
It’d be awesome to time the market juuuust right again, where I’d see this house sold at a market peak and our ROI turns out to be as good as it could possibly get. Am I going to actively try to do that?
As tempting as that is, no way.
Like I said, we got lucky and I’m happy with the fact that we were able to buy a nicer home in an area we never would have been able to afford had the market not been so depressed. Sure, I’d love to see some sort of return for the money that was put into the house, and I think we will see just that — some sort of return, but not necessarily the greatest return possible.
I can’t time the market on a regular, ongoing basis. Neither can you. And neither can the experts who claim they can.
So my plan is to ignore the market when it comes to my investments, whether that’s in my Roth IRA or in my home. It’s tempting to try timing the market, but logically I know it’s a losing game.
Whatever the market doing this month is going to be insignificant in 40 years, and I’m investing for the long term.
Are you ever tempted to time the market or are you happy to automate investment contributions and ignore the market completely? Have you ever gotten lucky with timing the market?