T1B

Dinsdale wrote:

KC Scott wrote:Math Fail on you Dins

No.

Stocks can fail -- and frequently do. It's glorified gambling.


While a real property may drop in value, it's concrete -- it ain't going anywhere.

It's not gambling, dins, it's like online poker....you just have to know what you're doing.

Sin,

theJON

Dinsdale wrote:
Last I checked, a portfolio is fairly ineffective at keeping the rain off your head. But it's a great thing to have to supplement your holdings outside of basic needs.

We do not understand this concept of minimal debt leverage you speak of.

Sin,

98% of the posters at T1B.

But the interest rate is soooo low, why would you pay off your house before investing every spare dime you have in the latest dot com IPO ?

Derron wrote: But the interest rate is soooo low, why would you pay off your house before investing every spare dime you have in the latest dot com IPO ?

You're just dumb.

If you have a health problem, and your income takes a subsequent hit because of it, is it better to have a roof over your head, or a FAT portfolio that pays 7.6% (minus some pretty hefty taxes?

HA! See, you wouldn't know the first thing about the "real world."

KC Scott wrote:Darren,

With the Govt. spending being what it has, Do you think inflation is coming?

What time period do you think this will occur in?

Dude bragging (wait, every word that spews from your keyboard is bragging -- forgive my redundancy) about all his investments (instead of something you can actually physically touch) is now issuing warnings about impending inflation?



Scott, have you ever wondered why the denizens of this board almost universally regard you as a moron?

KC Scott wrote:Darren,

With the Govt. spending being what it has, Do you think inflation is coming?

What time period do you think this will occur in?

Inevitable that it is coming. When ? Who knows? How long ? Who knows. Do I care..hell no.. Remember 81-82 ?

I have minimal debt. Mortgage only. Not a fuckin thing I can do about the inflation. The wife has a 401 K, it will do fine. I am making decent money now, and will figure out what I need to do with it. At my age and health history, paying down / off a mortgage is a pretty damn smart thing to do.

Derron wrote:Not a fuckin thing I can do about the inflation.

There's certainly ways to hedge that bet.



And I think you own many examples of one of the great ones (hint: they have decimals after their names, and they have an appetite for brass and lead).

there really is no right answer here. if you used your portfolio to pay off your mortgage 3 years ago, you got over.... BIG. If you took a 4% fixed a year ago and invested it in a rebounding market, you got over big as well.

I's the bird in the hand over 2 in the bush arguement.

bottom line is, you ought to have something in the market and you shouldn't be upside down in your house.

pesonally, i like the bird in the hand, the bird that keeps you out of the rain, or the foot plus of snow that is dropping right now. i will be mortgage free in about 5 years, maybe less. should i dump it into the market instead? maybe. maybe not.

smackaholic wrote:I's the bird in the hand over 2 in the bush arguement.

pesonally, i like the bird in the hand

You need to get the OL doing kegels.

KC Scott wrote:
So the question is - if you could have $250K in the bank and be paying 3.75% on a mortgage (which you can deduct a portion of the interest) why would you prefer to spend that $250K to pay off a house?

Because I don't owe 250K on the house / property. I owe about $ 125K on a property worth likely $500K. So I rip the check for the $ 135K, and have 125K left. That is way more than 6 months living expenses, now that I am mortgage free. I have somewhat predictable and steady income. Wait a year or so, build up the reserve and then use a determined amount and then likely look for a fixer upper or two. I am much more comfortable with tangible assets than the market.

It's going to be different for everyone's individual circumstance - some people will like the idea of having the house paid off and no payment owed.

To me, even paying 3.75% on a mortgage is still paying too much for the use of the 250K. Especially in this market, where every quarter of a percent is important. And I played the leverage game hard before. It damn near took me under. I dodged a bullet this last year, when I took ill and my business failed in the same year. Fortunately, for a couple of years, I had decided to use profits to pay down debt, and was way ahead of the repayment schedule. I was able to sell off the assets, even at the reduced prices, pay off the remaining debt, put the equity in the bank, and recovered from my illness and found work again. I don't see the sense in using 3.75% money for an overall potential return of maybe 6%, for a net of maybe 2.25%. Bricks, mortar and lumber will bring me double that or more with positive cash flow.

Others with a higher tolerance for risk will opt to invest that money or at very least keep it liquid when paying a very low rate.

I think my scenario covers that. I will invest my cash outside of my liquid emergency living expense fund, I will invest it in real estate that I will pay cash for, I add to that real estate portfolio every year if possible in cash. A paid off mortgage / house gives you the ability to ALWAYS have a roof over your head, and telling every one else to fuck off.

KC Scott wrote:More to the point aout inflation though, you don't seem to understand that when the Govt.finally does lift the prime rate, and the banks follow, it's good to have money locked in at a lower interest rate.

I hear ya, but I'm going to ride out this recession about 2 more years which is how long it will take me to pay off the house. I don't have a mortgage. I just have a HELOC which stays at the prime rate. Been 3.25% for awhile. Soon as that hits 3.75%, I will choose to lock in my HELOC into a mortgage. I will pay a higher rate then, but like I said, I got about 2 more years until the casa is paid for.

I'm of the "get rid of all debt first" cloth. I do have a 401k and so does the wife. I don't invest heavily in it. I prefer to pay off my only debt which is my house first. Then, I will play in the market some more.

Derron wrote:A paid off mortgage / house gives you the ability to ALWAYS have a roof over your head

And another thing that hasn't been mentioned -- financing.


Pull out a deed in your name, and every lending institution in the country is going to fight over who gives you a ridiculously low rate, should you want to buy a fixer-upper/rental.

smackaholic wrote:so long as said shit was understandable and what COULD happen was spelled out, fraud was not commited.

So we have established that you have no idea what fraud is. And you are still stuck on the right wing talking point of blame fred and fan. So both things you discussed you had no idea which way was up. 0 for 2 is not a good average.

Moving Sale wrote:blame fred and fan.

Absolutely correct.

Dinsdale wrote:

Moving Sale wrote:blame fred and fan.

Absolutely correct.

To what degree? Put a %age on it.