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the flip side is if you had the money in a diversified mix of equity funds and assorted duration bonds instead of tied up in the house you could sleep at night knowing you can always make the payments and not be cash poor and house rich .
it is likely that your balance would be up enough to have developed a cushion that even in a drastic case of selling equities you would still be a head balance wise from the investments .
there is really not going to be any less sleepless nights having the money to make the payments tucked away then not having the payments but having to spend money on interest to gain access to the money tied up in the house if you had to .
Can you guarantee there will not be a down turn that last a few years and there are little or no gains maybe even losses?
the flip side is if you had the money in a diversified mix of equity funds and assorted duration bonds instead of tied up in the house you could sleep at night knowing you can always make the payments and not be cash poor and house rich .
it is likely that your balance would be up enough to have developed a cushion that even in a drastic case of selling equities you would still be a head balance wise from the investments .
there is really not going to be any less sleepless nights having the money to make the payments tucked away then not having the payments but having to spend money on interest to gain access to the money tied up in the house if you had to .
I think a lot of us saw our parents go through far too much hardships in trying to just make their mortgage payments and barely being able to contribute to their retirement accounts. I know I certainly did. My folks struggled the whole time I was growing up. They had a little nest egg when they retired which worked for their lifestyle.
On top of what happened to my folks, I also almost lost my home about 25 years ago when our local economy tanked hard and my hubby was one of thousands who got laid off. No one saw it coming and it caught us off guard big time. There wasn't a job in sight and every other house in our middle class neighborhood was on the market. We had to relocate for work, taking a 40% cut in the process. It took us almost a year and a half to sell the house and we ended up selling it at a loss. I will NEVER go through that again. We lived FAR below our means after that and, once we recovered financially from everything, we always made sure we had a healthy emergency account.
Except for the house being paid off last year, we've been completely debt free for years as a result of our experience. We are in our prime earning years now and are saving/investing like mad dogs to prepare for a comfortable retirement. I don't need to be a multi-millionaire and I'm not working to be one as it's not my goal. I just want a comfortable retirement. We looked at our investments yesterday like we do from time to time just to see where we are. As it turns out, we are WAY ahead of where we thought we were. We already have what our goal was for retirement, YAY!!
Our goal was for him to retire in 5 years and me in 9 years. That's an awful lot of years to further build our nest egg, or not. We may just call it quits early and go have some damn fun. Or we could stay the course and double our next egg in the next 10 years. We feel very blessed to have options.
Can you guarantee there will not be a down turn that last a few years and there are little or no gains maybe even losses?
No one will ever convince you that you are wrong. So you can sit with your under 2% CDs that do not even keep up with inflation. Meanwhile others of us will continue to double our portfolios ever few years. If after a few years, the markets take a huge dive, we will still be ahead. In fact at that point I will be buying even more stock to take advantage of the inevitable recovery.
You seem fixed on the idea of a down turn....and a prolonged on at that. A well balanced, diversified portfolio is likely to do well even with a down turn.
No one will ever convince you that you are wrong. So you can sit with your under 2% CDs that do not even keep up with inflation. Meanwhile others of us will continue to double our portfolios ever few years. If after a few years, the markets take a huge dive, we will still be ahead. In fact at that point I will be buying even more stock to take advantage of the inevitable recovery.
You seem fixed on the idea of a down turn....and a prolonged on at that. A well balanced, diversified portfolio is likely to do well even with a down turn.
I never said I don't have money invested in a diversified portfolio. In fact I do.
I wonder why they even have CD's if they are so terrible and no one uses them anymore.
I never said I don't have money invested in a diversified portfolio. In fact I do.
I wonder why they even have CD's if they are so terrible and no one uses them anymore.
they are holding places for money that is either being spent down or needed in the shorter term or are emergency funds . i ladder my current years spending money in cd's .
but the cd's hold the money i make investing in other assets
Is it better to focus on paying off a primary home or saving the money if you have extra? Current mortgage rate is at 3.875% (30 year fixed)
Back Story:
I know several couples who have paid off their homes and when they went to get student loans for their college aged children, they were rejected due to the home being paid off.
Something doesn't smell right about that. There must be more to the story.
Quote:
Originally Posted by Bette
Is there anything if your income is around 60-70K per year that would reject you from some kind of funding if you need help? (Thinking healthcare......not sure) - this income is an estimate for retirement years. That is not the income at the present time.
In general, there are two types of loans: secured and unsecured. A secured loan would be something like a HELOC. An unsecured loan is something like credit card debt.
A secured loan is usually easier to get, but again it all depends on your unique situation: your personal balance sheet, your personal income statement, and your personal cash flow statement.
cd's are not really "investing the money " cd's are a place you keep the money you made investing . i could never ever see taking a mortgage to buy cd's .
if i invested that mortgage money in my insight growth model this is what i would gotten. i would have gladly paid the highest mortgage rate you have listed .
1990 minus 4.40%
1991 plus 40.60%
1992 plus 15.70%
1993 plus 31.90%
1994 minus 2.1%
1995 plus 27.20%
1996 plus 19.20%
1997 plus 25.50%
1998 plus 9.80%
To show you how investment ignorant I am, I don't even have a clue as to what an "insight growth model" is. But whatever it is, I would not trade it for my paid for home along with my keep it simple stupid FERS 3 legged stool retirement that will deliver me a combined guaranteed COLA adjusted income of $70,000 from my pension + age 70 SS benefit, a guaranteed $16,000 single life annuity from my TSP, and $12,000 from 4% withdrawals from the remainder of my TSP. After Uncle Sam and my State get their cut I will end up with a net income of around $78,000, and after that when all the bills are paid what will be left will be about $43,000 to do as I choose along with having a $100,000 liquid emergency fund.
I don't think I did too badly considering I did not have any spousal contributions aside from what my late husband contributed towards the pay off of our mortgage, and the ability to first claim on his Social Security benefit allowing me to delay my own.
You taking the higher risk investment path probably have done significantly better than me, and I most certainly applaud all the efforts you made to make that happen. I on the other hand opted to take the path of less risk because owning the roof over my head instead of the bank owning it was more important to me than trying to further grow my retirement income.
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