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I also prefer not to make bankers any richer than I have to. I also like the idea of actually owning my property someday in the not-too-distant future, rather than facilitating a bank's ownership of it.
The big problem i have seen so many run in to is they plan poorly. They dump all these extra payments in to the house with intention of kicking up the retirement contributions after the house is paid.
Time is your biggest friend when investing and once you lose those years the amount you need to save to compensate may be so much it is not doable
I kinda go back and forth on this..... right now, I have no mortgage. Reduces my need for cash and thus AGI.
Awhile back I had about 600k in mortgage and ran all kinds of firecalc scenarios. Most pointed towards paying the 600k off. But in my case, it was purely academic and involved no lifestyle changes. Not the same for everyone.
Forget status symbols. Bad for your financial health.
Seems like you have a good handle on finances.
Since you have a low interest rate and their will be inflation in the future do not pay off the mortgage. Invest for the future.
I would adjust the above to say pay off before you retire.
Skip the BMW.
Not completely, though, because I have preserved assets rather than sinking them all into the house. I could pay the house off if I sold all investments and blanked out savings but I don't see the need for that. Dave Ramsey would tell me to do it.
Actually, he probably wouldn't say that. He says to put 15% into retirement before putting extra toward the house:
There are two schools of C-D personal finance thought on this.
The Jim Cramer school: Use other people's money as much as possible. In this school, people will urge you to just service the loan as minimally as possible in order to keep pumping your cash into investments.
The Dave Ramsey school: Keep debt as low as possible with the goal of carrying no debt whatsoever, not even mortgage debt.
Really, I think it's more of a personality and value choice. Neither is inherently better than the other. If you trust the markets more than real estate, go the former. If you don't trust the markets and value frugality, go the latter. I try to tread a middle ground, but lean moderately toward the Dave Ramsey side of things. I was badly burned by the effing markets and don't trust them. It is only matter of time before a pretty severe correction in my opinion, and I'd rather be secure in affording my house even if my wife and I have downgrades in our income, rather than have a bunch of money invested. Just like you can't get money out of a house easily or cheaply, you cannot pull money out of the markets when they're down relative to when you invested.
Not completely, though, because I have preserved assets rather than sinking them all into the house. I could pay the house off if I sold all investments and blanked out savings but I don't see the need for that. Dave Ramsey would tell me to do it. However, I want to have more than 50% equity in my house even though we can afford the payments at 20%.
I personally agree with you on the Dave Ramsey school because of the same reason, simply don't trust the market. On top of that, I can drop dead any minute in my life, and who else is going to have all the money I heavily invested, definitely not me, so why try so hard to raise the number on the bank, instead, we should take good care of our health, without a healthy body, all the money earn simply goes to the hospital and pharmacy just to keep me alive.
How is a paid off house it a status symbol? You can't show it off. Imo it just makes sense to have a low cost, guaranteed place to live, especially if you're in a home you want to live in long term. I suppose it also makes a difference how much money you have left afterwards. Not everyone is left cash strapped by the process.
A BMW is a status symbol? My first assumption with expensive cars is that the person probably overspent. If you need to have a car (I don't), for Griffey's sake get a reasonably-priced one.
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