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Old 05-03-2015, 12:04 PM
 
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As one who often has a dog in these shows I want to share with you my personal choices. When we retired we transplanted and bought a new house that we paid cash for. A few years later we bought a condo at the beach that we got a mortgage for. We easily could have paid cash but didn't.it is impossible to interpret the results right now as we just recently got back from two hours on the beach in brilliant 76 degree weather. At this point of retirement we are just grateful to gave been blessed enough to be able to make and love the results. Sorta Like the changes in NC races more than worth it for the life living here.
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Old 05-04-2015, 02:36 AM
 
71,520 posts, read 71,712,424 times
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Quote:
Originally Posted by BeerGeek40 View Post
And if the stock market tanks (which admittedly, it looks like it's never going to), then you'll be very sorry that you were using leverage.
when you keep the mortgage and invest in the markets you have to ask yourself if you would ever borrow money to invest in the markets.

most layman would not buy equities on margin but in effect that is just what you are doing by keeping the mortgage and investing .

so that is the question you have to ask yourself . if you are fine borrowing and investing it in markets than fine . but if the answer is no , you would not ever borrow money to put in equities than the answer is obvious.

Last edited by mathjak107; 05-04-2015 at 02:46 AM..
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Old 05-04-2015, 04:46 AM
 
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People seem to make decisions based on emotions. Look at the past posts. Many express how they "feel" about mortgages. Buying stocks on margin is just another of those emotionally loaded terms that can confuse our thinking.

The logic here is really simple. It makes sense to keep or take out a low interest mortgage if the rates are so low that over time the returns on investments will be greater than the cost of the mortgage. For some of us an extra income tax deduction is also a minor but welcome factor.

The rest of the specious arguments are like throwing dust in the air.
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Old 05-04-2015, 05:50 AM
 
8,195 posts, read 11,908,623 times
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Originally Posted by jrkliny View Post
There is a lot of bad advice, some outdated, some just myths.

Paying off a mortgage made sense in the old days but that is no longer the case for many of us.
I think you just hit the nail on the head. The interest rate on my first mortgage was 12% and the rate on my second mortgage four years later was 9%. Of course it made sense to either not carry a mortgage or if you had one, to pay it off as quickly as you could. I think people still have that mentality even though interest rates are much lower these days.

When I was getting ready to retire and we bought our house in Las Vegas at the end of 2009, we paid cash because interest rates were around 5% and it made sense to us to do so. However, by late 2012, when interest rates had dropped to the 3% range, it made more sense to get a mortgage on the condo we were buying in Miami Beach rather than to take 300k out of our investments to pay cash for it. I was very confident that I could more than offset the mortgage interest charges with the investment income and capital appreciation.

Many people it seems, are stuck with 20th century investment principles when it comes to mortgages, or even worse (as even expressed in this thread) think this decision is tied to the interest rate deduction on income taxes. While that is an added benefit, it certainly isn't the driving force in choosing to take out a mortgage. It's always amusing to read their condescending Why would anyone spend $3 to get back $1 statements when it is clear that they just don't get it.
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Old 05-04-2015, 12:37 PM
 
Location: Near a river
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It all depends on what income/investment category you're in.
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Old 05-04-2015, 01:51 PM
 
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Originally Posted by newenglandgirl View Post
It all depends on what income/investment category you're in.
??????
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Old 05-11-2015, 09:58 AM
 
Location: San Antonio
7,629 posts, read 14,377,206 times
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Originally Posted by HappyTexan View Post
May I ask what you invested in that you are getting a 10% return ?
And what your tax rate on that is????
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Old 05-11-2015, 09:59 AM
 
7,798 posts, read 4,385,889 times
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As the Car Talk guy used to say, "Bo-gus!"
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Old 05-11-2015, 09:59 AM
 
Location: San Antonio
7,629 posts, read 14,377,206 times
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Originally Posted by HappyTexan View Post
I'm just the opposite. I use my CC the entire month, including bill paying and then just write one check a month to the bank for the CC payment.

My CC statement is categorized so I can see my budget broken down.
I do as well...pay it in full every month, and get the air miles from it for travel.

SW Visa for stateside travel, and our American Express American Airlines card for international.
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Old 05-11-2015, 10:01 AM
 
7,798 posts, read 4,385,889 times
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Same here; got one to build a credit history, and continue to use it for convenience. the reward points are also nice! But I pay it off in full every month without fail.
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