Fleeing NJ: Tepper's Move May Affect New Jersey Budget Forecaster Warns

[mikeyjones 88]

My kids have / had a one way trip to college and then their own place. They were given the gift of education with no debt, thus no excuses or reliance on daddy. So far so good. However, I'd only pay for majors that I thought would be useful after many years in the workforce. My oldest has an accounting degree from the Smeal School of Business at Penn State and the younger is in engineering at Cornell. My third will be an enigeer as well. Other than that I'd rather save the money and send them into a trade education.

 

I was unfortunately without anywhere to go at the age of 15 so my kids no I'm not screwing around when it comes to the school of hard knocks.

This is exactly what I was driving at.

 

I paid for the majority of my own education but I chose a major with which I could make a decent living.

 

While there are places for the soft sciences and other liberal arts majors, earnings are commensurate.

 

Sent from my ONE A2005 using Tapatalk

[mikeyjones 88]

Currently, no. Which is why were looking in the Jackson Newton area. I want nice property and privacy, 2 acres would be nice with a 4 or 5 person home. Bergen county is to expensive for what you get passiac is even worse with taxea. I will commute an hour no problem to get that. We can afford to live in any town, but it's what were looking for that pushes us West.

Only so many places like that in NJ.

 

I love the area we live in. We have 3+ acres and closest neighbor is 50 yds on one side and 300 on other. That's yds not feet.

 

All of this still in Morris County - which was a requirement when we were looking.

 

Sent from my ONE A2005 using Tapatalk

[Howard 538]

My kids have / had a one way trip to college and then their own place. They were given the gift of education with no debt, thus no excuses or reliance on daddy. So far so good. However, I'd only pay for majors that I thought would be useful after many years in the workforce. My oldest has an accounting degree from the Smeal School of Business at Penn State and the younger is in engineering at Cornell. My third will be an enigeer as well. Other than that I'd rather save the money and send them into a trade education.

 

I was unfortunately without anywhere to go at the age of 15 so my kids no I'm not screwing around when it comes to the school of hard knocks.

I'm with you, mostly.  My daughter spent two stints of a few months back with us after college and a first job, my son was out as soon as he graduated.  She did not stick with her major and as such did not start on the best career path, but has done well and is now with the largest property management company in the world.  My son wanted to major in Finance but I refused to pay for that and insisted on Accounting.  You can work in the finance department with a finance degree but in any business field with an accounting degree.  We ultimately "compromised" with him earning a double major in Finance AND Accounting.  He got an internship with one of the big four accounting firms in M&A after his Junior year and never even interviewed for a job after that and just went to work for them on graduation.  Stayed there a couple of years and is working in M&A for a big company for their own acquisitions now while he studies to pass the last exam to get his CFA.  Worked out well but you never know.  I graduated in 1980 as a Chemical Engineer and if you did not have at least a couple of job offers something was wrong with you, and if you were a woman in that field you had the pick of anything.  My wife graduated from the same school with the same degree in 1982 (recession) and could not find a job as was the case with over 50% of her class - so you just never know.  It ultimately worked out fine for her as she never worked a day as an engineer and became an Actuary instead.

[Zeke 5,504]

That may be the case with many my age. Not so with me. I live in Parsippany, which works fine for me, but it's not exactly Hoboken. You can't walk around anywhere, there are no hot spots as far as bars or clubs, and it's not exactly around the corner from NYC.

 

But even a place like Montclair, which is the closest thing to Hoboken that's not actually Hoboken, is quite expensive, too. You pay dearly for having everything you need within walking distance, and every apartment being built these days is considered a "luxury rental." If you want affordable living around here, in my experience, you need to go west. If you can shell out $2,000+ a month to live in Hoboken/JC, most likely in a tiny bedroom with multiple roommates, then lucky you, but I can't do it.

Thank you.

I almost feel that friends and how I met your mother have had an influence on a generation. Maybe it is just an age shift. I.E. 20 is the new 30 is the new 40...

[Zeke 5,504]

Currently, no. Which is why were looking in the Jackson Newton area. I want nice property and privacy, 2 acres would be nice with a 4 or 5 person home. Bergen county is to expensive for what you get passiac is even worse with taxea. I will commute an hour no problem to get that. We can afford to live in any town, but it's what were looking for that pushes us West.

At 29 your an oddball. More like us oldheads that enjoy " mowen da lawn".

I see dirt as an investment, we don't make anymore dirt( China is, but, well).

Thank you for your insight

[Zeke 5,504]

As far as the OP

My client base is leaving. I will be forced to follow.

[Howard 538]

Not sure I buy the concept of there not being people to buy houses.  Where I live houses don't stay on the market long at all.  All the people moving in are young couples with young kids or those about to have kids.  We are talking about homes at a half million or more too, not sure where these people are coming up with the money.  But they probably said that about me and my wife when we bought our house at 26 & 28.  

[Zeke 5,504]

Not sure I buy the concept of there not being people to buy houses. Where I live houses don't stay on the market long at all. All the people moving in are young couples with young kids or those about to have kids. We are talking about homes at a half million or more too, not sure where these people are coming up with the money. But they probably said that about me and my wife when we bought our house at 26 & 28.

Low to middle will always sell. The problem is with what is today's low and middle. High sells in a good state!

[Kevin125 4,772]

At 29 your an oddball. More like us oldheads that enjoy " mowen da lawn".

I see dirt as an investment, we don't make anymore dirt( China is, but, well).

Thank you for your insight

 

Too much of the dirt out west is "owned" by the Federal gov't,  It needs to be sold to the people (of this nation only) at a very modest price.  Would be a decades long endeavor.

[Rob0115 1,105]

I'm with you, mostly.  My daughter spent two stints of a few months back with us after college and a first job, my son was out as soon as he graduated.  She did not stick with her major and as such did not start on the best career path, but has done well and is now with the largest property management company in the world.  My son wanted to major in Finance but I refused to pay for that and insisted on Accounting.  You can work in the finance department with a finance degree but in any business field with an accounting degree.  We ultimately "compromised" with him earning a double major in Finance AND Accounting.  He got an internship with one of the big four accounting firms in M&A after his Junior year and never even interviewed for a job after that and just went to work for them on graduation.  Stayed there a couple of years and is working in M&A for a big company for their own acquisitions now while he studies to pass the last exam to get his CFA.  Worked out well but you never know.  I graduated in 1980 as a Chemical Engineer and if you did not have at least a couple of job offers something was wrong with you, and if you were a woman in that field you had the pick of anything.  My wife graduated from the same school with the same degree in 1982 (recession) and could not find a job as was the case with over 50% of her class - so you just never know.  It ultimately worked out fine for her as she never worked a day as an engineer and became an Actuary instead.

I don't see the compromise with him double majoring, you clearly won!

 

My friends son graduated last May from Carengie Mellon in Chemical Engineering. He had many offers settling on Exxon Mobile in Houston with a 10k signing and a 120k salary. He's a very bright kid but the CE jobs are in abundance for good candidates these days.

 

I have my daughter doing her penance at E&Y because it will be good pedigree. She's doing fund accounting work and it'll help her get into one of those gigs directly is she should so desire.

[NJGF 375]

The rest of my peers who worked minimum wage jobs growing up have all that to worry about PLUS paying off loans.

But paying off loans is so old fashioned. The smart people stop paying and are waiting for HRC to forgive their debt. And that is how the dems win elections.

[Barms 98]

Regarding dirt as an investment. If you are buying outright with cash. Yes. If you are taking out a mortgage its the worst investment ever period. So many people think making 10% or 20% or 30% on a house was a "gain" for them as they are clueless that the mortgage COST them 50%.

 

My clueless mother: "my house has doubled in value since we bought it". Okay mom what is the sum of all the payments (interest payments) over that 25 years? Guess what. You paid for your house 2x over.

 

Don't ever buy a house (with a mortgage) as an investment. Investing in the stock market (unborrowed money) always beats investing in a house with Mirtgage money, total return vs total return all the time. Google it.

[NJGF 375]

Its a complicated trade-off to make. She had no rent for 25 years (which keeps going up) but she did have R/E taxes (which also go up). Then there is upkeep.

[mikeyjones 88]

Regarding dirt as an investment. If you are buying outright with cash. Yes. If you are taking out a mortgage its the worst investment ever period. So many people think making 10% or 20% or 30% on a house was a "gain" for them as they are clueless that the mortgage COST them 50%.

 

My clueless mother: "my house has doubled in value since we bought it". Okay mom what is the sum of all the payments (interest payments) over that 25 years? Guess what. You paid for your house 2x over.

 

Don't ever buy a house (with a mortgage) as an investment. Investing in the stock market (unborrowed money) always beats investing in a house with Mirtgage money, total return vs total return all the time. Google it.

If it's on the Internet it must be true...

 

So many factors at play here. What's the initial cost of the house? Apr on the mtg? Structure of mtg? Appreciation of property value? Inflation rate? Term of mtg? Return on other assets?

 

Not as simple as saying she paid 2x over. Might be true in notional terms but not necessarily in real or even when compared to other asset classes.

 

Sent from my ONE A2005 using Tapatalk

[Howard 538]

Regarding dirt as an investment. If you are buying outright with cash. Yes. If you are taking out a mortgage its the worst investment ever period. So many people think making 10% or 20% or 30% on a house was a "gain" for them as they are clueless that the mortgage COST them 50%.

 

My clueless mother: "my house has doubled in value since we bought it". Okay mom what is the sum of all the payments (interest payments) over that 25 years? Guess what. You paid for your house 2x over.

 

Don't ever buy a house (with a mortgage) as an investment. Investing in the stock market (unborrowed money) always beats investing in a house with Mirtgage money, total return vs total return all the time. Google it.

Well I sort of agree with you, but not totally.  I agree that financial assets are generally a better way for most to invest.  As for the house, for most people it is a good "investment" unless they significantly over buy.  What you are saying about paying for it twice with interest is true, but the vast majority had they not done that would have just frittered away that money.  Thus, for the vast majority of working stiffs if they buy a house they are effectively just paying themselves rent versus paying a landlord and at the end of the mortgage they have an asset whereas they would have had nothing.  Sort of like buying a car versus leasing, except that a house hopefully appreciates in nominal terms while a car's value typically approaches zero over time.

[siderman 1,137]

Only Conn.#50 works longer than NJ#49   Americans Have to Work 114 Days Just to Pay Taxes

Business Review Board · Apr. 7, 2016

 

   

 

Most people don’t know how big a bite taxes take out of their paycheck. According to the Tax Foundation, Tax Freedom Day will arrive on April 24 this year. That’s just about the same amount of time Americans had to work last year in order to fill the government maw. Tax Freedom Day marks when the whole nation has worked long enough to pay off all federal, state and local taxes — 114 days for a collective 31% tax rate. After that, the fruits of our labor are ours to keep. And statists think they’re being generous to “give” you that much.

The visualization, the Tax Foundation says, is to help Americans understand the true cost of taxes so they can have an informed discussion about “what we pay for a civilized society,” as the inscription on the IRS building in Washington reads. However, these taxes are used for such things as funding for Planned Parenthood and barrels of pork spending, all while the agency collecting those taxes is targeting nonprofit conservative groups for scrutiny. Government on all levels takes in about $5 trillion in taxes. That’s more than Americans are expected to collectively spend on housing, food and clothing combined this year.

Of course, state taxes are a factor here, and each state celebrates different Tax Freedom Days depending on how far the state is dipping into its residents' pockets. Mississippi residents were free of their tax burden on April 5. Meanwhile, workers in Connecticut will be toiling for their state coffers until May 21. See where your state stacks up on the infographic below.

 

[silverado427 10,682]

Have a wonderful Idea Lets pass a law that states only  taxpayers can vote. Lets see how the politicians like that !!!!

[Barms 98]

Howard I hear what you are saying but the fact of the matter is it's a myth that it's a good investment. I would argue a little with your assertion that "you have an asset" at the end. But at what cost? My example was even too simplified with my moms "double" on her house. In reality a 30 year mortgage is really like paying 3x for your house.

 

I do agree that you have an asset and your best hope would be to "break even" total return over some time period. But let's put some real numbers behind that asset. Let's say you were lucky enough to find a house you like for same as your rent (don't forget about real estate taxes and insurance). Nowadays you need to fork up 20% down payment. On a $300k house that's $60 grand. If you still rented and invested the $60k I'd say you'd have quite a big "asset" at the end of whatever term you want relative to the house.

 

Look, I own a house too. It just gets me going when kids nowadays say they want to buy instead of rent "as an investment". It's a

Terrible investment.

 

I have a friend who who was paying $4500 a month mortgage back in 2006. Lost his job defaulted on the mortgage. Now he rents a huge colonial in Harrington Park for $3200. His credit is coming back and I asked him if he would buy the place and he said he loves renting. Taxes going up? Not my problem. Furnace breaks not my problem. Oh an ice dam leaking water in? Not my problem. The only risk he runs is if the owner doesn't want to renew and he'd have to leave. People need to get it out of their head that renting is a bad thing. The home ownership thing is then entire country is only like 60% anyway.

[MLArmory 33]

I plan to leave this state ASAP.  My entire family hails from PA, and I have no idea why my parents chose to move from PA to NJ over 40 years ago...My parents live in a nice quiet section of SJ, and my house is in a nice enough area as well, but this State is a cancer.  Too many people fighting over too few resources and jobs.  Got my eyes set on PA, just have to scope out which cities are the nicest and also have reasonable cost of living.

[gleninjersey 2,139]

Owning a home is most certainly an investment. "Good" is a relative term. Will you most.likely have better rate of return if you put that money in the stock market. Probably. Deoending on what invrstment you choose and how stocks in general performed during that time period. But there are plenty of stocks that go to zero, are worth less years or decades after purchasing or you just break even or keep up with inflation.

 

Owning a home shoukdn't be viewed as "an investment". It's a place to raise your family, make memories etc. The fact that it is forced savings is an added bonus. Should everyone own. No, of course not. But for those that it sense for (not moving every few years, relatively stable availability of finding work in that area, etc) it makes sense.

 

Not to completly high jack this thread with owning versus renting. To get back to article, Tepper leaving NJ and how it affects tax collection in NJ.

 

It is indicative of a larger problem in NJ. As mentiond NJ taxes the wealthy at a largely disproportionate amount relative to the general population. The amount of wealthy people is a small finite pool. They can't fight back all that well. They can try to use money to influence politicians but the rich are a small voting block. The politicians must keep the poor and working class voting for them if they want to keep their jobs. So they sock it to the wealthy to pay the highest burden of taxes.

 

The wealthy in NJ are getting tired of paying more than their share. They are voting with their feet and moving. Just like in Atlas Shrugged the producers are disappearing. This will require the remaining population to pay more, and more, and more as the wealthy and their businesses move away. Eventually,.maybe, the democrats will be voted out as the tax burden on the remaining populace increases faster and faster. The politicians are slowly committing suicide. Unfortunately they are making the rest of the citizens suffer as we watch NJ slowly implode.

 

Keeo in mind it wasn't just the personal taxes that Tepper paid that will negatively effect NJ tax collection. It's also the taxes his business paid, the taxes the employees who moved with him paid, the taxes generated by the ancillary business services that are no longer required due to Tepper's company leaving (landscaping, repaving parking lot, employees spending money at restaurants during lunch, snow removal servicesetc, etc) that will no longer be collected.

 

As long as NJ continues it's liberal ways the greater the exodus of the wealthy and their business will be. Liberalism IS a cancer. We are watching what happens as the cancer has been allowed to fester, untreated and ignored for decades. NJ is dying a slow, painful death at it's own hand. And it's ashame because it doesn't have to. It was once a vibrant, thriving, healthy area. Such a shame. Probably to late to save it.

[Howard 538]

Howard I hear what you are saying but the fact of the matter is it's a myth that it's a good investment. I would argue a little with your assertion that "you have an asset" at the end. But at what cost? My example was even too simplified with my moms "double" on her house. In reality a 30 year mortgage is really like paying 3x for your house.

 

I do agree that you have an asset and your best hope would be to "break even" total return over some time period. But let's put some real numbers behind that asset. Let's say you were lucky enough to find a house you like for same as your rent (don't forget about real estate taxes and insurance). Nowadays you need to fork up 20% down payment. On a $300k house that's $60 grand. If you still rented and invested the $60k I'd say you'd have quite a big "asset" at the end of whatever term you want relative to the house.

 

Look, I own a house too. It just gets me going when kids nowadays say they want to buy instead of rent "as an investment". It's a

Terrible investment.

 

I have a friend who who was paying $4500 a month mortgage back in 2006. Lost his job defaulted on the mortgage. Now he rents a huge colonial in Harrington Park for $3200. His credit is coming back and I asked him if he would buy the place and he said he loves renting. Taxes going up? Not my problem. Furnace breaks not my problem. Oh an ice dam leaking water in? Not my problem. The only risk he runs is if the owner doesn't want to renew and he'd have to leave. People need to get it out of their head that renting is a bad thing. The home ownership thing is then entire country is only like 60% anyway.

I agree with you on a strictly financial basis it is usually not one of the best investments.  I get into this all the time with people I know that are realtors that send crap out by mail and on the net showing how much better an investment it is versus stocks.  They tell you how great it is the you only put 20% down and can buy five times more to appreciate.  That is where I attack them most, as if a person could buy stocks on 5:1 margin they would make a much bigger killing.  Then there is the fact that most people overbuy housing.  They will move from a one or two bedroom rental apartment to a four or five bedroom house.  They now have a huge amount of space that they don't use or need and have to heat and maintain.  Sure there are lots of hidden costs in a house.  There are lots of day to day maintenance issues as well.  But, you don't have a landlord or a community association that you have to beg with every time you want to do something.  If you want to paint your house purple with yellow dots you are free to do it.  If you want to rip out a wall, well go for it.  Bottom line there is more to it that a financial comparison.  Last, you can't always sell a house when you want to - it is not liquid like a stock or bond.

 

I will tell you I chose my house not for what I thought it would be worth but where and how I wanted to live.  If it makes money great, but I really care more about my quality of live.  When I bought mine in 1986 people told me that I was crazy because I agreed to pay $5,000 over asking - it was a very hot market at the time.  I explained that I planned to be there a long time and $5,000 over many years was chump change.  Since I have now been here almost 30 years that has come out to be $167 a year, less than what some fools spend at Starbucks each month.

[Kevin125 4,772]

In terms of what kind of investment a home is....

 

That would be "safe".

 

But it comes with conditions.  You can't just sit on it like a bar of gold.  So for most people, they can expect to get their money back after so many years. Sometimes with some gains.  Others that eff it up, or unfortunately suffer some financial calamity, lose the house and anything they put in.  Or are forced to sell and barely break even or lose money.  But those are the exceptions. Mostly, its a safe bet that the value of the house will be there when you sell it. Hopefully, you were able to pre-pay some of that 30 yr or convert it to 15  when times got better.

 

We won't talk about property tax.  It's probably too early to open that bottle of single malt.

 

Glen's post above in on the mark in my opinion.

[Howard 538]

In terms of what kind of investment a home is....

 

That would be "safe"....

 

But it comes with conditions.  You can't just sit on it like a bar of gold.  So for most people, they can expect to get their money back after so many years. Sometimes with some gains.  Others that eff it up, or unfortunately suffer some financial calamity, lose the house and anything they put in.  Or are forced to sell and barely break even or lose money.  But those are the exceptions. Mostly, its a safe bet that the value of the house will be there when you sell it. Hopefully, you were able to pre-pay some of that 30 yr or convert it to 15  when times got better.

 

We won't talk about property tax.  It's probably too early to open that bottle of single malt.

 

Glen's post above in on the mark in my opinion.

Well safe is a questionable term.  What if the neighborhood goes to crap?  There were people that owned gorgeous homes in Newark before the riots in the 1960's and many of those homes are worth less today than they were then (well that might be a slight exaggeration).  But look at cities like Detroit, Rochester, York where industry has died and value have plummeted if you can even find a buyer.  There is no certainty.  Then there is crap legislation like the Highlands Act which makes property virtually unusable.  Let's not even get going on zoning changes.  Then there is the money you dump in over time for things like new HVAC equipment, new roof, new driveway, new windows, etc......

[SW9racer 262]

As I am making my exit plans a reality, I am finding out that housing in NJ has been stagnant over the past ten years. My home value had gone up, but between the items you listed: roof/driveway/siding/hvac yada yada, I am in the hole. I could sit here another 10 years and try to break even, but then it would cost me my quality of life with the declining nj climate. Even that aside, I am glad I have my own home as I enjoy the John Deere, and the other elements of the environment I created for myself. Was it a financial investment? Definitely not. But I did live the way I wanted to, and if I had rented a comparable environment I definitely came out ahead financially.

[PK90 3,570]

IMO, land is an investment; a house is a home. Luckily, I had both for 25 years before moving on.

 

Sent from an undisclosed location via Tapatalk.

[Kevin125 4,772]

Well safe is a questionable term.  What if the neighborhood goes to crap?  There were people that owned gorgeous homes in Newark before the riots in the 1960's and many of those homes are worth less today than they were then (well that might be a slight exaggeration).  But look at cities like Detroit, Rochester, York where industry has died and value have plummeted if you can even find a buyer.  There is no certainty.  Then there is crap legislation like the Highlands Act which makes property virtually unusable.  Let's not even get going on zoning changes.  Then there is the money you dump in over time for things like new HVAC equipment, new roof, new driveway, new windows, etc......

 

Intended as a "Relative" term.   ie.. vs investing long in oil in 2015. Or short now.

 

My neighborhood is unlikely to go to crap in the next 20 years.  Location is a factor. Didn't say it wasn't.  If you buy a house in Kearny, NJ, the risk is probably higher for loss.  If you buy a house in Upper Saddle River.. probably not so much of a risk.

[PD2K 115]

Have a wonderful Idea Lets pass a law that states only  taxpayers can vote. Lets see how the politicians like that !!!!

Will never happen but love that idea