Adjusted for Inflation

[joanmcq]

When I bought my house in 2000, a good interest rate was 6%.  The rentals were 6.75%.  Why the fed couldn't raise interest rates slower, I don't know.  I do remember the 80's interest rates!  I got over 8% on a CD.

[Lee B]

When I bought my house in the early 80s, I was excited because I go a state VA mortgage at 10.5 %.

I had an 11 % CD from Lincoln Saving & Loan.

I was able get 19% interest on overnight repurchase agreements on the surplus funds at the wholesaler where I was the controller.

 

[joanmcq]

I worked with someone that had a 15 yr 14.5% CD.  He was so sad when it matured.  I think it was 1993.  The bank it was with was offering every incentive to cash it out early, but he wouldn't.  Would you?

[Corduroy Frog]

23 hours ago, joanmcq said:

Sacramento; bought in 2000, 2001, 2003.   Lucky

Lucky indeed Joan.  Since you have sold out in Sacramento and moved to Nevada, I've got a good friend who did exactly the same thing.  If you live in Reno, you may know CPA Richard Schively.  He couldn't stand Sacramento and now lives on the Truckee River.  Schively was partner at Arthur Anderson before the disaster.  Arthur Anderson was huge at the time, and lots of good people ended up on the outs, not just the guilty ones.

I did note that you were in NV, maybe Reno, Carson City, or Vegas.

[mcbreck]

In the financial meltdown of 2008, Berkshire Hathaway loaned Goldman $5b at a 10% interest rate. In an interview he said the company kept calling wanting to pay him back but he was always busy when they called because they were making almost $10m each week in interest.

My dad sold his business in the mid-80's and put it all in CDs because the interest rate was all at 10-11% and since long term stock market yields are 10%, he decided he didn't need to take the risk. I started selling investments in 92 and it was exceptionally common to find people who had never owned a stock in their lives - today it's exceptionally common to find people who've never owned anything but stock. In 92 we could sell a 6% tax free bond when the alternative was a 4.5% CD. You didn't have to be much of a salesman to make that sale.

[BulldogTom]

Love the Berkshire story.   That is why Buffett is Buffett.   On the flip side, I will never take a loan that does not allow pre-payment.   I found this out the hard way on my first home purchase.   I wanted to refinance and I had to pay a pre-payment penalty to the lender.   Never again.

Tom
Longview, TX

[joanmcq]

Frog, I don't know him but I live about an hour outside of Reno.  Carson is beautiful, right up against the Sierra.  And I'm about an hour's drive from Tahoe.

[mcb39]

On 3/20/2024 at 10:39 PM, joanmcq said:

I worked with someone that had a 15 yr 14.5% CD.  He was so sad when it matured.  I think it was 1993.  The bank it was with was offering every incentive to cash it out early, but he wouldn't.  Would you?

No!  I am actually in the process of laddering CDs right now and making more interest money since we did in the late 80's and early 90's.  Unfortunately, in those early years, we had very little money to  invest.  Now that our wants and needs have decreased dramatically, it is sort of fun.. Just always remember to keep a cushion.

[Abby Normal]

1 hour ago, mcb39 said:

No!  I am actually in the process of laddering CDs right now and making more interest money since we did in the late 80's and early 90's.  Unfortunately, in those early years, we had very little money to  invest.  Now that our wants and needs have decreased dramatically, it is sort of fun.. Just always remember to keep a cushion.

Same. I don't want interest rates cut too much, too soon. I consider these current rates, normal.