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Old 02-03-2012, 11:19 AM
 
Location: Clear Lake, Houston TX
8,376 posts, read 30,691,505 times
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Quote:
Originally Posted by BDFP View Post
not put all my eggs in one basket...
Agree, but it depends on how much cash he's slinging around. If I had a million in cash, I'd pay for the house outright and invest other chunks elsewhere. If I wasn't in that situation I'd put a decent amount down.

Anyway we can't compare interest rate of 3% vs return on bonds at 6% because that little parameter called ''time'' wasn't even discussed. Too many people get hung up on rates without even thinking about time. Also I've concluded that most people do not understand the concept of non-linear math, nor the concept of front loading.

Also the tax break thing is a good selling point for realtors and loan officers.
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Old 02-03-2012, 11:24 AM
 
Location: Pearland, TX
3,333 posts, read 9,170,918 times
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And, when we have those discussions we totally forget the folks that pay cash because they don't view real estate as an investment. Like me. Bury me in the back yard when I die. Don't care what the house is worth on the market.

And, yes, time factor. Sure you can show a bond fund that yielded 6% in the near past. Find one that's returning 6% YTD 2012 that isn't loaded with Argentina sovereign risk (or something equivalent).

Ronnie
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