Archive for October, 2017

On being ‘liquid’

We were walking along the Boise greenbelt last weekend and happened to run into the couple that live across from the home we just sold. (As much as that seems like a strange coincidence, folks in Boise have come to expect that sort of thing, there’s some kind of weird nexus here.)  One of them commented on us being “completely liquid”, referring to our financial situation in which absolutely none of our assets were tied up in real estate. Other than two modest vehicles and the contents of a 10×15 storage unit, he’s right. Our entire net worth exists only as investments — essentially pieces of paper that we trust to be worth something.

And, like most investors, we don’t actually have the physical pieces of paper (like share certificates and the actual physical bonds) — no those exist somewhere else (I think). We get regular statements with annotations like “unrealized gains” (or losses) and ‘share price’.  All of which can be converted (we trust) to more spendable cash at a couple days notice.

But man, am I the only one who marvels at the level of trust all this requires? And I know the answer to that question is: Absolutely not!, as my insightful spouse has brought up this very topic  on several occasions.  We have to place immense faith and trust in our institutions like TIAA-CREF and our financial adviser/broker to not just be making decisions that are in our best interest, but to not outright steal our money!

Even when we were homeowners, the majority of our wealth was tied up in these ‘instruments’ (doesn’t that make them sound a little less virtual?) yet there was some satisfaction in home ownership.  Here was something real — a house — a piece of land — that was ours. We could grow food on it, we could shelter our children, we could live there no matter what.

It takes great faith in our society, at a time when such faith seems to be in short supply, to jump out of the home-ownership game, at least for a while.

One more point worth making here. Our move to walk away from hour house was ours — very voluntary and thought out. In that same conversation with our former neighbors, he related that his parents just lost everything in the Napa Valley wildfire. They saw the fire across the valley, decided it was worth leaving the area for a while but didn’t really believe it would come that far. They came back to the horrific scene of ash and destruction we’ve now seen on the evening news.  My heart goes out to them, and to all the folks who face the destruction of wildfires, hurricanes, floods and all the somewhat biblical plagues with which our fellow men have been visited this past few months.

More than once, I’m reminded that we are incredibly lucky.

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October 26, 2017 at 1:59 pm Leave a comment

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