paying off mortgage early vs. investing:

[rsnoble-im-back]

Ok........someone check out http://mortgagesaver.org/big_mortgage.htm

So what do you think? I have around 125k equity in this place. Should I follow the advice on that site and wait for another Enron to wipe me out?

Thoughts please.

 

[MattTheSkywalker]

It depends on a lot of things. There is a certain peace of mind that comes with paying something off, and you can always borrow against property.

 

[c3web]

What they say is one of the keys to wealth creation. I wouldn't say you should go and invest it all in stocks, but I would invest it. I like real estate. When you invest in stocks it can be risky...
Lets say you buy some stock for $10,000 dollars and it goes up 10% you make $1,000, but
if you were to take that same $10,000 and invest it in property you could get $100,000 worth of property. If it goes up 10% you would make 10,000.. Doubling your money. The key here is leveraging your money. Plus.. like you say.. A stock can be worth nothing tomorrow, but a house will always be worth something. Houses don’t drop 50% over night.... The only way that would happen is if you were in some kind of market relying on very few businesses and those businesses closed and there was no work.

 

[Big Pappa]

This is the way that I think. If I pay off my house how much more disposable income will I have? I would have whetever my house payment is every month for ever because the house is payed off. If a disaster happens and you loose most of your income you will not be out on the street you will only have to worry about utilities, taxes and food!!!

IMHO Pay off the House.

 

[rsnoble-im-back]

This is the way that I think. If I pay off my house how much more disposable income will I have? I would have whetever my house payment is every month for ever because the house is payed off. If a disaster happens and you loose most of your income you will not be out on the street you will only have to worry about utilities, taxes and food!!!

IMHO Pay off the House.

This is pretty much the same conclusion I came to. Except im only sending in an extra payment here and there, im not parting with huge chunks so I can still deal elsewhere.

 

[insurance agent]

This is pretty much the same conclusion I came to. Except im only sending in an extra payment here and there, im not parting with huge chunks so I can still deal elsewhere.

I would definitely pay the house off.
Then take what the monthly payment was put 20% of it to savings.
Then start with the smallest bill you have, I know you would think the largest, buy start with the smallest. Pay what you would normally pay plus the 80%. Do this until that bill is paid. Then put 20% of that into savings, and state over with the next bill, plus what was the house payment and the bill, just paid. Just keep repeating the process, in no time you will be debt free. This is a simple, but highly effective system; however you have to use a lot of discipline.

After you are debt free, invest wisely in what ever you choose. If stocks are not your cup of tea, look at an annuity, you get to play in the market with no risk, meaning you already know what the minimum yield will be.
Shop around in your town, till you find some one you trust.
Tim

 

[rsnoble-im-back]

I would definitely pay the house off.
Then take what the monthly payment was put 20% of it to savings.
Then start with the smallest bill you have, I know you would think the largest, buy start with the smallest. Pay what you would normally pay plus the 80%. Do this until that bill is paid. Then put 20% of that into savings, and state over with the next bill, plus what was the house payment and the bill, just paid. Just keep repeating the process, in no time you will be debt free. This is a simple, but highly effective system; however you have to use a lot of discipline.

After you are debt free, invest wisely in what ever you choose. If stocks are not your cup of tea, look at an annuity, you get to play in the market with no risk, meaning you already know what the minimum yield will be.
Shop around in your town, till you find some one you trust.
Tim

Thanks--but fortuentely, other than a rather low house payment, I have no other bills. I paid off all my credit cards and other stuff years ago, however my credit could use a boost so ill be getting another. Im not worried about racking it up as I dont really need it anyway. I dont have a car payment either, as I refuse to spend that kinda $ for a piece of shit. I retain a few nicer older vehicles, and if I need another usually find one with lower mileage in the 5-8k range and just buy it outright. Those guys and their $800.00/month truck payment and full coverage insurance out on the jobsite roaring thru the mud need to grow some brain cells. I love having them tease me about the junk I drive and listening to them cry about all their bills. I might drive an old beater(to work anyhow) but I can do pretty much anything I want to do. Within reason that is.

I will look into the annuity, been wanting to anyhow. I have a pension and in years past it looked rather strong but it has taken massive hits. Fortunetely im young enough to still drop my toolbelt before im supposed to.

 

[insurance agent]

Thanks--but fortuentely, other than a rather low house payment, I have no other bills. I paid off all my credit cards and other stuff years ago, however my credit could use a boost so ill be getting another. Im not worried about racking it up as I dont really need it anyway. I dont have a car payment either, as I refuse to spend that kinda $ for a piece of shit. I retain a few nicer older vehicles, and if I need another usually find one with lower mileage in the 5-8k range and just buy it outright. Those guys and their $800.00/month truck payment and full coverage insurance out on the jobsite roaring thru the mud need to grow some brain cells. I love having them tease me about the junk I drive and listening to them cry about all their bills. I might drive an old beater(to work anyhow) but I can do pretty much anything I want to do. Within reason that is.

I will look into the annuity, been wanting to anyhow. I have a pension and in years past it looked rather strong but it has taken massive hits. Fortunetely im young enough to still drop my toolbelt before im supposed to.

Amen,
You are right on target.
The only way, I will go into debt, is if things were to go bad, I could sell whatever and make my money back. I am very thankful my wife is on the same page with me, debt is truly a bad word. You will do fine, in what ever you do.
Tim

 

[jafo]

Originally Posted by rsnoble-im-back
Thanks--but fortuentely, other than a rather low house payment, I have no other bills. I paid off all my credit cards and other stuff years ago, however my credit could use a boost so ill be getting another. Im not worried about racking it up as I dont really need it anyway. I dont have a car payment either, as I refuse to spend that kinda $ for a piece of shit. I retain a few nicer older vehicles, and if I need another usually find one with lower mileage in the 5-8k range and just buy it outright. Those guys and their $800.00/month truck payment and full coverage insurance out on the jobsite roaring thru the mud need to grow some brain cells. I love having them tease me about the junk I drive and listening to them cry about all their bills. I might drive an old beater(to work anyhow) but I can do pretty much anything I want to do. Within reason that is.

I will look into the annuity, been wanting to anyhow. I have a pension and in years past it looked rather strong but it has taken massive hits. Fortunetely im young enough to still drop my toolbelt before im supposed to.








Amen,
You are right on target.
The only way, I will go into debt, is if things were to go bad, I could sell whatever and make my money back. I am very thankful my wife is on the same page with me, debt is truly a bad word. You will do fine, in what ever you do.
Tim



IMHO the both of you are wrong you should leverage your biggest investment and make it work for you. The most financially astute people in the world would never ever pay off there mortgage ...this is your biggest Tax break...You should get the equity out of the house and invest it

If your mortgage is at 5.5% but the equity is making 10-13% you are earning 4 to 5% on money that you borrowed...That’s is a basic idea...Use other peoples money to make your own


jafo