Acknowledgments xix

    About the Authors xxi

Introduction 1

Chapter 1 The Million-Dollar Question 5

    Our Homes Are Our Castles 7

    An Engine to Prosperity 8

    Uncle Sam Wants You to Be a Homeowner 10

    The Million-Dollar Question 13

    Slow and Steady Wins the Race 15

    The Bottom Line 15

Chapter 2 Your Home is an Investment 17

    Investment Versus Speculation 17

    Your Home Dividend 19

    The Nifty Fifty 23

    Waiting to Buy 24

    It Is Hard to Time the Stock Market and Housing Market 24

    Taking the Long-Term View 25

    Don’t Day Trade Homes 26

    Your Home Is an Investment 29

    A Home to Call Their Own 29

    Look at the Whole Picture 30

    What Am I Supposed to Look at Again? 31

    The Bottom Line 32

Chapter 3 Now is a Good Time to Own a Home 33

    A Home in Fishers, Indiana 34

    Cash is King 38

    The Lynch’s Southern California Home 43

    Your Home Is Not an ATM 46

    The Millionaire Paupers 47

    Housing as a Portfolio Decision 49

    Homes North, South, East, and West 51

    The Bottom Line 54

Chapter 4 Finding a Home and Closing the Deal 55

    How Much Home Can You Afford? 55

    How to Choose a Home 59

    How to Choose a Realtor 61

    Is the Price Right? 63

    This House Will Be Sold on November 11 63

    The 6 Percent Fortress 64

    Moving Merchandise 67

    Happy Clients 69

    The Closer 70

    The Times They Are a Changing 70

    Match This 72

    Realtors: Can’t Live With Them or Without Them 72

    Negotiating Boldly 74

    Good Things Come to Those Who Wait 75

    Regression to the Mean 76

    The Bottom Line 78

Chapter 5 Debt Doesn’t Have to Be a Four-Letter Word 79

    Using Loans to Live Beyond Your Means 80

    How to Invest Like Warren Buffett 81

    Loans Create Leverage 82

    Leverage + Compounding = Wow! 84

    Loan Payments 85

    The Unpaid Balance 85

    Comparing Loans: The Total-Payments Error 87

    The Right Way to Think About Loans 88

    Bad News, You Won the Lottery 89

    Can You Make Money Borrowing at 12 Percent to Invest at 7 Percent? 90

    The Bottom Line 91

Chapter 6 Choosing the Right Mortgage 93

    Finding a Lender 93

    Getting Preapproved 95

    Saving for Your Down Payment 97

    Mortgage Terms 101

    Mortgage Rates 102

    Anchoring 103

    Mortgage Points 107

    Sure, I’ll Lend You Money 109

    30-Years, 15-Years, or ? 109

    Adjustable Rate Loans 110

    Creative Financing 113

    Buying a House with Creative Financing 114

    Biweekly Mortgages 115

    Graduated Payment Loans 116

    The Bottom Line 119

Chapter 7 Refinancing and Home Equity Loans 121

    Heads You Win, Tails I Lose 121

    Prepayment Penalties 123

    Does Refinancing Pay? 123

    The Break-Even Refinancing Rate 124

    Wake Up, Little Susie 126

    The Time Value of What? 126

    Mental Accounting 128

    You Can Sell Your Home Without Selling Your Home 129

    Say No to Credit-Card Debt 130

    One Way to Pay for College 131

    The Bottom Line 132

Chapter 8 Remodeling  133

    Sunk Costs 133

    Does Remodeling Pay for Itself? 135

    Remodel Sooner, Not Later 139

    Make It Bigger, Not Better 140

    What’s a Remodeling Project Really Worth? 141

    Leaky Windows 144

    I’d Rather Do It Myself 145

    Paying By the Job or By the Hour? 147

    The Big Job in Waltham 147

    The Bottom Line 148

Chapter 9 Rental Properties and Vacation Homes 151

    You Used to Pay the Landlord, Now You Are the Landlord 151

    Adverse Selection 152

    Moral Hazard 152

    Long-Distance Landlords 154

    Ah, the Tax Code 156

    Fishers, Indiana, Again 156

    If I Bought It, It Must be Worth the Price I Paid 160

    A Home with Two Rentals 161

    Those Darn Taxes 162

    The Investment Value of a Vacation Home 163

    The Bi-Coastal Renkens 165

    The Bottom Line 166

Chapter 10 Letting Your Home Take Care of You 167

    HRAs 167

    Life Is a Journey: From Porterville and Indio to Thatcher 170

    Should You Raid Your IRA to Pay Off Your Mortgage? 171

    Reverse Annuity Mortgages 173

    Grandma Ford 173

    What Do I Owe You? 175

    RAMed by a RAM? 176

    The Bottom Line 177

Chapter 11 Selling Your Home 179

    Home Dividends, Again 180

    Curb Appeal 181

    Clean It Up! 182

    Pictures on the Wall 183

    Loss Aversion 184

    Waiting for the Right Price 186

    Our Price Is Firm, But the Terms Are Negotiable 187

    The Bottom Line 187

Afterword 189

Appendix A An Owner-Occupied Home in Fishers, Indiana 191

Appendix B A Rental Home in Fishers, Indiana 195

Appendix C Your Home 199

Index 205