Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
well, i figured since i'm already investing in the market (via my 401k and IRA), and since the market is at an all time high and my 'guess' is that it's more likely to take a dip soon, i might take the sure 3.25% for now, and be mortgage free (end of this year) for the time the market 'might' dip, so that i can invest heavily at discounted stock prices....
of course my logic may be flawed, and of course i'm making some assumptions as you've noticed above....but the 3.25% gain is a sure thing for now (maybe a little less after tax benefits).
So is a 3% rate on a 10 yr treasury, but I'd still go with the market.
If you bought a large cap individual stock with a dividend of 3-5% (vz, pm, pfe, cvx, t, etc) you'll STILL beat the 3.25% savings on dividend yield alone.
You have an enormous advantage and don't even realize it. WHO ON EARTH is gonna loan you money at 3.25!!??
Even if the stock market doesn't move more than 3% per year, the added dividends and capital gains from the SP500 will beat the rate on the mortgage, and provide some tax bennies.
ok, fair enough....but what if the market crashes and you take a 10-15% dip over the next year?
i know you're going to say that 'it's going to come back up..." and i agree with you....but at that point, you've already bought high (buying now), and don't have as much next year to buy cheap like i supposedly would since i have all that 'extra cash' income that i don't have to give to a mortgage company....
know what i mean?
Quote:
Originally Posted by tommy64
So is a 3% rate on a 10 yr treasury, but I'd still go with the market.
If you bought a large cap individual stock with a dividend of 3-5% (vz, pm, pfe, cvx, t, etc) you'll STILL beat the 3.25% savings on dividend yield alone.
You have an enormous advantage and don't even realize it. WHO ON EARTH is gonna loan you money at 3.25!!??
MILK IT.
mannn....you're giving me second thoughts again...damn it....i should just stop posting here. lol i keep going back and forth on this based on comments like this.
I agree with you....but i feel like you're overlooking some 'possibilities' that might have an impact on this equation.......1. the market dip i mentioned in which the companies you mentioned would probably have a smaller to zero dividend 2. the peace of mind of not having a mortgage 3. the psychological impact of having only 1500 obligations monthly without a mortgage and being able to contribute 7k a month towards the market once the house is paid off in 7 months. etc.
It's not just about total returns. For some people getting rid of debt makes them better than any market return ever would.
I'm making double payments on a 15-year mortgage at 3%. For me, it's about the flexibility and freedom I'll have by being payment free in just a few years.
I already have boatloads of retirement money invested in stock funds, and I'm not interested in investing more at today's record high values (*). My money market savings pays a tiny fraction of 3%. For this reason, paying off the mortgage makes the most sense for me.
If the stock market takes a 20% crap this year, I'll reconsider things
(*) I still invest enough thru work to get the full company match, but not any extra.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
