Is Cash still King? --- thoughts on preparing for the future ---- (funds, rent)

[mysticaltyger]

Originally Posted by Thinking-man

hi everyone,
as some of you may know, we are both 30 and living near the DC area.
My question to you experts is that if you had 4000 a month extra to apply to either debt (mortgage) or save as cash, which would you do?
Considering the state of economy, and the fact that we are so close to the nations capital, makes me wonder if we should have most of our money as cash at this point or whether all is well with paying down debt...

Ps. these thoughts stem primarily from watching "24" and the stuff Jack Bauer has to deal with and it makes me worried living in the area we live in!

Try not to think of it in all-or-nothing terms. With that much extra income, you could do a combination of both.

Personally, I wonder if the money system will hold up. (The US, Japan, & Europe are all printing money). I think the best thing we all can do is to reduce our dependence on the money system. Hard to do if you live in a metro area, but where possible...it's worth it.

[cpg35223]

Originally Posted by Thinking-man

hi everyone,
as some of you may know, we are both 30 and living near the DC area.
My question to you experts is that if you had 4000 a month extra to apply to either debt (mortgage) or save as cash, which would you do?
Considering the state of economy, and the fact that we are so close to the nations capital, makes me wonder if we should have most of our money as cash at this point or whether all is well with paying down debt...

Ps. these thoughts stem primarily from watching "24" and the stuff Jack Bauer has to deal with and it makes me worried living in the area we live in!

Why not divide it straight down the middle and do both?

The problem with the radio financial gurus is that they blindly follow one approach, when today's financial climate requires some adroitness. A paid-off house won't do you a damned bit of good if you have lost your job and can't afford groceries.

To me, if you both had rock-steady jobs and the economy wasn't worrisome, I'd say pay down debt. But if either of you work in the private sector, I would lay aside enough money until you equal at least one of your salaries for six months. And then take whatever comes after that and invest it. And if the dollar crashes (Which I doubt, for where else are people going to go?), it really won't matter anyway.

[texdav]

No credit well used actauly can gie you a big advatage and can be much more convenent. It allows you to buy things you could afford with cash unless richer.It means buyig a better model anyhting that chnages you rlifestyle to ore your wants. its can poftne mean you can make reservations when you would have to sned cahs and hope its still avilable. it can mean meny back by use of d=credit cards and free mnths interest o the moen.Wit no crdit histroy few can buy a house and the better credit the bettr the rates.That is why even big corporations use credit to their advantage. Cash isn't kind because it many instances its inconvenient to use;makes no difference to seller and can mean actauly a cheaper price with rewards and what you can do with the money yourselfmeans gettithigns later i life;means getting a lessor whatever your buying. Its alos mean snot carryig cash and free motnhs borrowing.In fact both investments and savings do not send you cash each month likely; they send you a credit that you can redeem.

[ja1myn]

Originally Posted by oneasterisk

My worst case scenario is being unemployed for an extended period of time.

This is why I always make sure I save a certain amount of cash every month no matter what.

[shaner23]

As long as you are debt free (besides mortgage), saving for retirement, and have a great emergency fund, I don't see why paying off the mortgage wouldn't make sense. You are tied to the debt, either if you have to move or stay there. If the house doesn't sell, you would still have to pay the mortgage. Being debt free just makes sense. Less liabilities, no indentured servitude, and the ability to live on a lower income.

[msdmoney]

Originally Posted by Thinking-man

hi everyone,
as some of you may know, we are both 30 and living near the DC area.
My question to you experts is that if you had 4000 a month extra to apply to either debt (mortgage) or save as cash, which would you do?
Considering the state of economy, and the fact that we are so close to the nations capital, makes me wonder if we should have most of our money as cash at this point or whether all is well with paying down debt...

Ps. these thoughts stem primarily from watching "24" and the stuff Jack Bauer has to deal with and it makes me worried living in the area we live in!

Is your only debt your mortgage?

[jghorton]

If the entire system were to 'go south' (ala '24' scenario), then it's pretty likely that paper money would be about as valuable as 'confederate dollars' were during the Civil War. Put your resources somewhere that rust and moth do not destroy and thieves cannot break-in and steal.

[Thinking-man]

Originally Posted by Thinking-man

hi everyone,
as some of you may know, we are both 30 and living near the DC area.
My question to you experts is that if you had 4000 a month extra to apply to either debt (mortgage) or save as cash, which would you do?
Considering the state of economy, and the fact that we are so close to the nations capital, makes me wonder if we should have most of our money as cash at this point or whether all is well with paying down debt...

Ps. these thoughts stem primarily from watching "24" and the stuff Jack Bauer has to deal with and it makes me worried living in the area we live in!

Originally Posted by msdmoney

Is your only debt your mortgage?

i thought i was pretty clear about that...

[westcoastforme]

Maybe, if you have no other debt other than the mortgage....then save $3000 and put an extra $1000 on the mortgage, or save $2500, $1500 to mortgage?!!

[Thinking-man]

Originally Posted by westcoastforme

Maybe, if you have no other debt other than the mortgage....then save $3000 and put an extra $1000 on the mortgage, or save $2500, $1500 to mortgage?!!

thanks. yeah, that's pretty much what i'm doing.........about 2000 extra to mortgage and saving 2k in cash....but my question was more regarding whether it even makes sens to contribute the 2k extra to the mortgage considering the possibility of a worst case scenario....but as others have indicated, you can't keep worrying about stuff like that....and you must diversify.
So, i plan on continuing on the same path....and we'll see how things turn out...

Another thing i'm concerned about is that the rates will go up (to 5 or 6%) again and i've paid off my loan but have saved very little cash.....and then, if i need to take out a loan for something, i can't take advantage of a low rate like i did have (at 3.25%) and now, instead, i have a paid off house and forced to take out a loan with a high rate....as opposed to not having paid off my 3.25% loan, saved a bunch of cash, and buying the property that 'would have' had the 6% rate, out right.....or something like that.....