though i do have to agree with those that said put some away for a rainy day if you haven't already
Posted on 01/10/2016 12:33:51 PM PST by al baby
Yes, but it works.
The point about paying off debt is the same as investing it in a fixed rate investment is good. I never thought of it like that before.
Powerball.
Seriously though....a condo is iffy to me. I’d take the 25k, sell the condo, and find a better arrangement. I’m biased against anything that requires maintenance fees that you don’t fully control.
If it was a single family home, different answer.
Mr. mm and I are debt free as well and you are so right.
We paid off our mortgage several years ago. It was not a high rate and it would have been better to invest the money rather than pay off a low-interest loan, but I just don't like debt. The 30 year mortgage was paid off in 12 years.
That might be hard to move id love to we are still debating on that one. however I have been on the board for over ten years so i kinda have control over stuff
Ok Hi larry how are you Sir Happy New Years Annies mom passed away Jan 2 sad
If you’re pondering a move, keep the cash available to facilitate that. Don’t pay down the mortgage yet.....my opinion
all your great answers have spawned more questions let try to get on Cramers show and see what he says
Pay the mortgage, unless you can earn more than your interest cost. And allow for cost of taxes on any profit from your investment. So if your mortgage is 4% and your investment earns 5%, but you pay 2% in taxes, you’ve lost money.
Paying off a mortgage versus investing the funds is a more complicated formula than X% mortgage versus Y% rate of investment return.
With the mortgage, you have the mortgage interest write-off, so (for example) a 6% rate costs you less than 6%, depending on your tax bracket. Another element ..the annual interest paid declines as you pay down your mortgage...as will your deduction.
With an investment, you may have to pay taxes on your earnings (interest, dividends). If you put the money in stocks, there won’t be any taxes until you sell (and have gains). Another element to the investment side...if your earnings are always reinvested, you’ll be earning returns on your “earnings”.
Money market accounts can pay up to around 1.0% (generaly, credit unions). Dividend paying stocks can pay much higher, but you risk loss of principal.
Another question...are you eligible for a traditional IRA or SEP IRA? These could give you a great tax deduction, plus your earnings still collect untaxed in the IRA until you pull money out.
Cash = flexibility. You can always pay the mortgage down with the same cash anytime, or even over an extended period of time in the future.
Try to become debt-free 1st. If you are under 50, since your mortgage isn’t much, you might try to buy rental property, and again, keep your debt as low as possible. That rental property will go up in value while simultaneously giving you monthly cash flow.
12,500 PowerBall tickets
though i do have to agree with those that said put some away for a rainy day if you haven't already
If you owe 100,000 at 3%, and take 30 years to pay it back, that will cost you fifty thousand dollars! At 5% that will cost you ninety-three thousand dollars!
Ten thousand in a junk bond fund, the rest to pay down some of the mortgage.....
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