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Old 08-27-2018, 12:29 PM
 
Location: Maryland
18,630 posts, read 19,338,905 times
Reputation: 6460

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Quote:
Originally Posted by UnfairPark View Post
Is there a website with information about percentage of paid off homes in every town? Just for fun, to see which town has more fiscally responsible crowd.
No but your query reminds me of Katrina. Evidently New Orleans had a pretty high rate of homes that had paid off homes. Sure some were little more than shacks but they had no liens on them. Another issue was that the homes were in families for generations but they never probated them through the courts so there were major ownership issues that had to be entangled.

 
Old 08-27-2018, 12:52 PM
 
Location: Westchester County, NY
1,602 posts, read 1,898,363 times
Reputation: 1548
I don't have any input on the original thread topic, but I continued reading through just to keep giggling as someone repeatedly called mathjak, unarguably one of the most informed regulars on finance stuff, uninformed. Gold. Someone pass the popcorn, please.
 
Old 08-27-2018, 01:13 PM
 
Location: NJ
31,771 posts, read 40,480,002 times
Reputation: 24590
Quote:
Originally Posted by LizfromtheBronx View Post
I don't have any input on the original thread topic, but I continued reading through just to keep giggling as someone repeatedly called mathjak, unarguably one of the most informed regulars on finance stuff, uninformed. Gold. Someone pass the popcorn, please.
did you get your degree in finance from the dave ramsey university?

i read some of what mathjak said, i see he even seems to be using some of my material when it comes to putting more money towards your real estate. my material is gold. everytime using my material yields a 50% risk free return 90% of the time.
 
Old 08-27-2018, 03:50 PM
 
105,757 posts, read 107,736,740 times
Reputation: 79380
Quote:
Originally Posted by CaptainNJ View Post
avoiding paying additional interest expense isnt a return for you. this line of thinking is for children.
It is the same fuzzy logic you see from those that like to claim their house is paying them a dividend every month. The amount of the dividend is claimed to be the amount of their housing expenses they are saving each month .

But that is false because an expense never pays you a dime. In fact by the same fuzzy logic that house is costing you the money you are not collecting in rent by consuming it yourself.

When you start trying to convert expenses that you merely reduced in to a return because you pay less for something it lends itself to all kinds of fuzzy logic

Last edited by mathjak107; 08-27-2018 at 04:35 PM..
 
Old 08-27-2018, 04:03 PM
 
Location: Vienna, VA
654 posts, read 419,349 times
Reputation: 680
Quote:
Originally Posted by ncole1 View Post
Get a good homeowner’s insurance and umbrella coverage, on the off chance somebody gets hurt. Much cheaper than keeping large interest payments just in case you lose a big law suit!

I'll keep the "large" (3.5% fixed 30 yr) interest payments not to lower my legal liability but because my investments average over 10% per year. I still deduct too so the real rate is closer to 3%. The liability reduction is just a small bonus.

If you are not good at managing money, paying off the mortgage is the best way to go. Overspending or poor investment choices can be serious issues for some.
 
Old 08-27-2018, 04:26 PM
 
Location: Henderson, NV
7,087 posts, read 8,588,812 times
Reputation: 9978
Quote:
Originally Posted by twinkletwinkle22 View Post
mathjak said: paying off the expense of a loan has no risk to it

There could be a risk to paying off a mortgage loan if the money used to do that was needed in another area, medical emergency comes to mind. Prudent people always keep an emergency fund for this reason, to cover the unexpected. It is most peoples dream to own their home free and clear but this is also similar to putting all your eggs in one basket or only owning one stock.

Many financial gurus advocate having savings in a diversified portfolio. Your home should be a part of your savings but don't neglect investing in other areas like stocks.
Exactly. I have a tiny remaining note at 4% on my home (about $600K value) of $50K. I paid off $65K a few weeks ago and kept the $50K balance remaining because I’m not comfortable spending my cash on erasing the note. I need more cash on hand in case of emergency or just to feel comfortable. Saving the interest on the $50K isn’t a compelling reason for me, because it’s NOT risk free in practical real world terms. It’s a huge risk to draw down your only cash just to kill a tiny interest payment lol. Then if I’m strapped for cash, I have to get another loan somehow or use credit cards. That wouldn’t be smart, all to save a few bucks of interest.

I like the idea of owning a home free and clear and I’ve been there before a few times. But I also like better and better homes Not to mention with my investment opportunities I have to be honest a 4-5% interest mortgage really is free money. I can make so much more return on my money that it’s hard to watch it be tied up in a house but then again, it’s probably not the worst thing to have some diversification. It’s more psychological than anything.
 
Old 08-27-2018, 04:35 PM
 
Location: Oak Bowery
2,872 posts, read 2,034,974 times
Reputation: 9147
Quote:
Originally Posted by fumbling View Post
Agree with this, a paid off house by itself is not the ultimate goal, a paid off house and a diversified portfolio (which can be accomplished with just one stock index fund) is the ultimate goal.
As one of our good friends here loves to say, "Bada bing".
 
Old 08-27-2018, 04:38 PM
 
105,757 posts, read 107,736,740 times
Reputation: 79380
Ideally you want cost cutting reducing expenses and good sold growth and income generation on liquid investments .doing both will give you maximum cash flow
 
Old 08-27-2018, 05:05 PM
 
964 posts, read 868,969 times
Reputation: 759
Quote:
Originally Posted by Thatsright19 View Post
It’s obvious that you are buried in textbooks and not looking at the entire picture. No one cares to argue definitions with you. The rest of us are operating in reality.

But really, it’s great that you’re so impressed with your own finance education. Eventually you’ll understand that education is supposed to be used in realistic business scenarios. You seem to be focused on some idiotic definition of risk free.
Oh I can have philosophical conversations and in fact I can pretty much guarantee that you could not compare 2 different diversified portfolios of multiple mutual funds with various risks and tell me which is better after looking at risk adjusted returns. I could.

I look at friends portfolios all the time and make recommendations to them which is real world stuff.

What I pointed out (As did numbersguy) is that you can't just look at a 4% mortgage and say I am earning 5% on this stock and think it is a valid comparison. Obviously that is what you do. For the people who actually understand finance they adjust for risk and assess whether that portfolio at 8%, the one at 10% or paying off a mortgage makes the most sense.

I haven't looked at a textbook in 20 years. I just know what a definition of something is. I don't have to read a book to know what a cat is, but I surely know a dog is not a cat
 
Old 08-27-2018, 05:05 PM
 
13,256 posts, read 8,338,082 times
Reputation: 31427
Takes a good sales pitch to convince folks to stay shackled to a mortgage.
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