When you have debt, you do not have the power to use your greatest tool for creating wealth. That is your income. Think about how much you spend each month for debt/mortgage. What could you do with that money if you could invest or save it? That is why it is smart to become debt free. You will enjoy work much more, because you do not have that pressure.
Pay down Mortgage or invest?
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In Canada, payments on mortgage interest are not tax deductible. So I suppose paying down the mortgage is more attractive? Even at 4.0%??
[ QUOTE ]
In Canada, payments on mortgage interest are not tax deductible. So I suppose paying down the mortgage is more attractive? Even at 4.0%??
[/ QUOTE ] Buy a chunk of land in the U.S. and drag your home across the border.
In Canada, payments on mortgage interest are not tax deductible. So I suppose paying down the mortgage is more attractive? Even at 4.0%??
[/ QUOTE ] Buy a chunk of land in the U.S. and drag your home across the border.
So, what happened to all you great investors?
Did Change help you?
Did Change help you?
To answer the OP question: Most sharps will NOT pay down a mortage, as it is better to keep the cash flow strong for better investments and for emergency.
The only time to pay it down would be if you have go much money that it doesn't matter.
The only time to pay it down would be if you have go much money that it doesn't matter.
Interesting to see all the comments before the financial crisis. It's been an interesting ride the past few years. We're only 2K points away from the pre-crisis highs on the DOW. That's kind of scary when you think 9% unemployment, $14 trillion dollar national debt, and states flat broke. I'm in the market 100%, but being very cautious, as I do expect a substantial correction. Perhaps as much as back to 10K on DOW, from current 12K. The tough times are not behind us, in my opinion. With that being said, my strategy has not changed since prior to the crisis. I live a frugal life, but have it very nice, and I save aggressively, by maxing out 401K, 5K year into 529's, 6 month emergency fund, and I'm making triple payments on my mortgage to have it paid in full in just 4 more years. So, at that time, I'd be 37 with a 350K house paid for, no debts of any kind, 50K liquid savings, and hopefully about 500 - 600K in retirement funds (currently 350K). It's all about having a strategy and game plan. I can see light at the end of the tunnel and can't wait to get there. Like Sir William Wallace in Braveheart, FREEEEEEEEEEEEEEEEEEEEEEEEEDOM!!!!
I agree. The DOW is flawed, with unemployment so dam high. That money must be coming from foregin investors or because people don't know what to do with their money, so, they just throw it in the stock market.
A home is not in an investment by the way, because of the liability associated with a home (repairs, taxes, insurance), so paying it down is just not a good move.
Also, you can't count on your company keeping your around. Getting downsized is a way of American life, so it is best to keep the cash flow strong, and prepare for the worst.
Once Obama is gone, things can do nothing but get better. This guy has done more to destroy our way of life that any other President, with his anti-capitalism policies, his bailouts, and printing money. Welcome to Change!
Interesting, this is a purely American question. In Ireland, for example, if your don't pay down your mortgage the bank will go after your other assets, which is why in such countries the mortgage default rate is near zero. Maybe we should have the same thing in the US.
Interesting, I didn't know that. Just wait until the USA does away with the mortgage interest deduction in the next 3-5 years and I keep reading how the 30 year mortgage will not be the norm available to borrowers in the future either. Those two factors could crush home values. Think about it.
It is hard to predict if the market (or other investments) will go up. Paying off a mortgage will eliminate the monthly mortgage payments. As such, when times are tough, this takes away a big worry when it comes time to pay the bills.
Best scenario is to just wait til you have the cash PLUS about 50% plus before you buy a home. So, if you buy for 200k, cash, you should have another 100k cash in the bank or where ever you keep your money.
The next 3-5 years are going to be good to buy.
The next 3-5 years are going to be good to buy.
That's one way of looking at it.
Here's another: if you have too much debt- then pay off your debt. If you don't have too much debt, then use money you don't need for a while to get the rate of return the markets have offered.
Would you rather pay off a 6% mortgage and thus save 6% on the part of the loan you paid off or get 8-11% in the stock market for your long term investments. 8-11% is higher than 6%.
The market is over valued, so it is doubtful that you will get that high of a rate of return over the next 5 years. Pay off the mortgage and that will give you a guaranteed return.
Since 2000 the S&P has only returned an average of 2%. it is worse if you factor in inflation. Paying off a 6% mortgage over that time is looking pretty good
In 2000 it was at or near it's all time high. Your choice of year is not a good sample.
You can always pick a time period in the past to make any point you want. Do you do anything else beside CP? You are all over this board trying to sound like you know what you are talking about. You don't.
Yep, i only keep predicting when the market is going to crater. Keep holding though.
