Mobs, Messiahs, and Markets

Don't Go Looking for Trouble

Here we are reminded of a recent letter from a reader. We paraphrase:

I know you do not give advice, but I was just curious what you think about my financial position and/or what you would do in it.

I own a 14‐unit apartment building in Huntington Beach, California. I bought it a couple of years ago. There has been about $1 million in appreciation. My wife wants to sell, but I always considered it as my retirement after paying for 30 years.

The problem with selling would be:

1. Capital gains taxes.

2. What to do with the money.

3. We live in the front owner's home of the same property.

I feel stuck because my property taxes are relatively low, as I purchased the building from my father, and I was able to benefit from a California tax law that basically lets me keep his tax rate.

But I have a feeling that the bottom is going to fall out of our real estate market. Would you rather be the owner of an apartment building that has historically always been at 100 percent, or cash out the building and buy a home, or sell and just rent?

In response, we posed an equally absurd question: I am a happily married man. I love my wife; she's beautiful and smart and she loves me. But here's the problem. She is an actress. I've always heard that actresses make bad wives. So I'm thinking about divorcing her. Am I being an idiot?

Answer: Yes, you are an idiot. We don't see what your wife sees in you. You'll be lucky if she doesn't leave you.

In both cases, the real and the hypothetical, ...