[Pops]

IMHO, the "downsize and cash out" concept will not work for the majority because the pool of buyers will not be there. Instead, they will take on boarders or returning children and that type of thing.

You're right, it won't work for the majority but that isn't really the question in this thread. We've become very long on philosophical blather and pontificating on long term effects decades in the future but woefully short on any immediate action.

So, is cashing out and downsizing soon a good plan?

Lots of talk about deflation lately. I'm having a hard time teasing out the part that is good: lower oil prices leads to lower prices for gasoline, food and most everything shipped, along with cheaper 'just-about-everything" due to higher dollar and continuing depressed economics elsewhere.

U6 unemployment is down to 10% but employed percentage is lower than it has been in 30 years, for almost 6 years now. But the fact is, the future, where the home is no longer a store of value, is fast approaching because demand is shifting to investors rather than first-time owners.

"Home prices continue to rise and outpace both inflation and wage gains," said David Blitzer, of S&P Dow Jones Indices. "If a complete recovery means new highs all around, we're not there yet."
First-time buyers historically increase the homeownership rate, but they are still a historically small share of today's buyers. If prices continue to heat up, and more markets hit or surpass their bubble peaks, homeownership will continue to drop.

That's because unlike during the latest housing boom, the mortgage market isn't fueling the prices; instead, it's a lack of supply. Lower- and even middle-class Americans are therefore less and less able to become homeowners. The split between the haves and the have-nots, at least in housing, appears to be widening.

http://www.cnbc.com/id/102627205

[americandream]

Learning to play the game is probably the safest bet as I have said. If you are going to cash out, you will need to be cash rich or have a support structure you can depend on. We are only at the start of the globalisation process which is going to get ruthlessly competitive. The markets are a good indicator and they are no longer for the thrill seekers riding long term trends. Very volatile these days.

[onlooker]

I think as a matter of general principle it is good to cut expenses and/or increase liquid assets. One reason is to be mobile so one can move where ever one wishes quickly. Another is so that you can if you wish retire earlier and get out of the rat race. Also, if the economy in general falters as many think, you want to have as little expenses as possible so you can withstand periods of unemployment or vacancy in your rentals etc.