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Old 09-20-2018, 05:33 AM
 
71,517 posts, read 71,694,121 times
Reputation: 49088

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Many times people shoot themselves in the foot accelerating the mortgage payments . They figure the will pay off the mortgage and then invest more for retirement.

But time is your biggest friend when dealing with market investments. By delaying you put more and more demand on a shorter time frame doing okay. Hit a 2000 style market that took 13 years to recover inflation adjusted and your results can be quite poor.

You always want to give yourself the most time you can.

Last edited by mathjak107; 09-20-2018 at 06:26 AM..
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Old 09-20-2018, 06:18 AM
 
46 posts, read 19,318 times
Reputation: 112
At 33 my house was paid of. Never went into debt again. never made more then $40000. I have 3m at the age of 65---one job, one house. one wife. retired at 55 with 1.5m
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Old 09-20-2018, 06:33 AM
 
Location: Tennessee
23,580 posts, read 17,553,447 times
Reputation: 27640
It's really a question of cash flow and investment opportunity cost.
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Old 09-20-2018, 06:37 AM
 
71,517 posts, read 71,694,121 times
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It always is ..everything is always going to be at the expense of something else .
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Old 09-20-2018, 07:47 AM
 
Location: RVA
2,164 posts, read 1,265,616 times
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Quote:
Originally Posted by hulburt1 View Post
At 33 my house was paid of. Never went into debt again. never made more then $40000. I have 3m at the age of 65---one job, one house. one wife. retired at 55 with 1.5m
Wow! Every single point in this statement puts you in the top 0.1% of success stories!! Congratulations. While Iíd love to know how you did it, its way too late for me. My path will end up as I had hoped, hopefully, but in a totally different sequence. No way I could have retired how I wanted at 55. And I sure didnít have 1.5M at that age (or now) despite making 3-4 times what you did.
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Old 09-20-2018, 07:56 AM
 
Location: SF Bay Area
1,423 posts, read 2,430,225 times
Reputation: 1776
When I bought my first home, in my early 30's, the mortgage rate was 15% and I had a 15 year loan. Paid it off in 7 years. About 8 years later I bought my current home and paid cash. I prefer to be mortgage free, it just gives me more choices in life having one less monthly payment. I retired at 52.
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Old 09-20-2018, 08:32 AM
 
Location: USA
185 posts, read 94,122 times
Reputation: 369
Quote:
Originally Posted by Perryinva View Post
Wow! Every single point in this statement puts you in the top 0.1% of success stories!! Congratulations. While Iíd love to know how you did it, its way too late for me. My path will end up as I had hoped, hopefully, but in a totally different sequence. No way I could have retired how I wanted at 55. And I sure didnít have 1.5M at that age (or now) despite making 3-4 times what you did.
That comment made me think about the poor 'cat' lady who died alone and left millions in the bank. Whatever makes you sleep better...
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Old 09-20-2018, 08:36 AM
 
Location: Tennessee
23,580 posts, read 17,553,447 times
Reputation: 27640
Quote:
Originally Posted by Perryinva View Post
Wow! Every single point in this statement puts you in the top 0.1% of success stories!! Congratulations. While Iíd love to know how you did it, its way too late for me. My path will end up as I had hoped, hopefully, but in a totally different sequence. No way I could have retired how I wanted at 55. And I sure didnít have 1.5M at that age (or now) despite making 3-4 times what you did.
This is the kind of stuff I don't buy on this forum.

You hear about these unbelievable amounts of wealth accumulation on what are very pedestrian incomes. Most people I know making $40,000 are just getting by. They might be saving enough to get their corporate match, if they have one, but they're not putting a lot back, much less paying a house off at 33 without some significant outside help.
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Old 09-20-2018, 09:24 AM
 
Location: equator
3,431 posts, read 1,529,612 times
Reputation: 8504
Hmm, haven't had a mortgage since 1987, now that I think of it. So I was 32. We took our SoCal house profits to CO and built our own place there with the proceeds. With our own hands....and have lived unconventionally since then.

I'd say the way it affected retirement was that it made it too easy to just skim by in life, instead of buckling down to put $$ away for the future. Without conventional corporate-type jobs, not much went to SS. I guess we had way too much fun, LOL.

But here we are, retired anyway, making it work.
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Old 09-20-2018, 10:03 AM
 
6,241 posts, read 4,725,740 times
Reputation: 12785
This thread has been alive for 3 years and 40 some pages of posts. I am probably repeating myself but I will add my comments.


First I try to make decisions based on analysis. If my gut feelings don't agree, I look for the explanations and try to arrive at a resolution. When it comes to debt, most of us were trained to avoid debt and it feels good not to have any debts. That made a lot of sense generations ago. If you owned the farm, you could always get by. But if the bank owned it you could lose it. Few if any of us are in that situation. Having a mortgage means less money tired up in a house. That can mean a bigger emergency fund, more money to invest or to spend before we die.


Here is my story for what it is worth. When I retired 8 years ago, we sold the house. We added the money to our investment portfolio and took off to explore the US in our RV. Three years later we resettled and instead of plowing our equity from the previous house back in to a new house, we took out a mortgage for $330K. In 5 years that $330K we invested has returned enough to cover the cost of the mortgage and to grow by $100K.


There are those who will say we were just lucky. Not really, it is a matter of math. We are dealing with a 30 year fixed mortgage at well below 4%. A balanced portfolio is going to return way more than that. Now there are some restrictions on being able to borrow and invest. First the rate needs to be low enough. As rates are now climbing well over 4%, it becomes harder to do this. Remember your investment returns not only need to cover the mortgage but they need to be able to pay down the principal as well. Secondly you cannot do this without risk if you are living on the edge and must get those returns every year to pay the mortgage.


Again, you are best off if you do the analysis instead of going by what feels good.
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