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View Poll Results: Mortgage or Investments
No mortgage pay 350k for house 30 54.55%
Mortgage with money in investments 25 45.45%
Voters: 55. You may not vote on this poll

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Old 07-23-2019, 02:58 PM
 
2,190 posts, read 750,989 times
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Quote:
Originally Posted by Martha Anne View Post
I do come from a background where my parents invested quite a bit (Not me, as I was single and a modestly paid public service worker, my choice with no regrets): Here is the deal: in the past 6 years, you are saying, you invested and made enough to pay off your mortgage. How much money was that? How much did you gain, after capital gains taxes, fees, etc? Do you mind citing a number? In the past 6 years, since 2013?
Your question wasn't directed to me but the internal rate of return on my portfolio from July, 2015 when I took out a mortgage, to now, was 40%, or about 9% annually. That excludes taxes paid on investment income but a good deal of it is sheltered in IRAs and some is Berkshire stock, which pays no dividends, so zero taxes. Mortgage rate is 3% fixed. Interesting exercise!

My own situation: bank loaned less than I wanted, but I have a $100K, 15-year mortgage so I've already paid off almost 1/4 of the principal. The payment is very manageable and the equity in the house is less than 10% of my net worth.

Taking out a mortgage in retirement is a very personal decision but I'm happy with my choice.
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Old 07-23-2019, 03:56 PM
 
11,203 posts, read 8,589,807 times
Reputation: 28260
Quote:
Originally Posted by mathjak107 View Post
I donít advocate for renting at all ...what I do is take to task these ridiculous comments about all renters are losers and are dumb for renting ...that is false and I dispute it when I see it ...that does not mean I am advocating renting and not owning ..I have owned more homes and real estate then most in my life.

But renting when you have the resources to deploy in a business or more profitable investments can easily surpass owning and tying up multiple 7 figures in a house ...so renters can be winners ...you just have a lot of poor renters with no options .... so as a general statement ,renters are throwing away money can be quite false
What you fail to see is that the average person only has so much money to allocate to housing each month. Say $1500. They can either put that $1500 towards rent or towards a mortgage. In either case that money is not investment money. So technically, people aren't tying up hundreds of thousands of dollars needlessly in a house.
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Old 07-23-2019, 03:59 PM
 
71,991 posts, read 72,020,102 times
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Who cares how many do it , it still makes that blanket statement false as a general comment and I take a statement calling me a loser or paying rent for idiots personally since it is that renting that let me buy a real estate business with the money not tied up.

Once the mortgage is paid off or someone paid cash that money is now no longer availabile. Up to 1/3 of all resi sales are cash so yes there are multiple 6 figures sitting in a home good or bad so it is not even a question of how many can or do it .. it is the fact it is done and not all renters are losers and I resent those comments and that is all that matters.

I will do my best to dispute those uninformed comments when they are posted.

It is no different when you see people here calling poorer people lazy or unmotivated ...I take it the same way because if that statement does not apply to me it does not apply to many others as well who took a similar path.

So , nooooo I don’t advocate renting but I will certainly defend renting for those of us who have it as a strategic part of their planning

Last edited by mathjak107; 07-23-2019 at 04:52 PM..
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Old 07-23-2019, 04:02 PM
 
2,121 posts, read 3,431,981 times
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Quote:
Originally Posted by NewbieHere View Post
I don’t discuss my financial numbers online. It would be crass to ask me to respond to your question.
Just for 2013 alone, the market went up 30%, my mortgage rate is 3.5%.
OK, so you are talking about making a 30% gain "in the market". That's all I really need to know. (Sorry, I agree it's crass to ask a number. I really was only interested in knowing if you were talking about your house value going up. Which it must have, right? Mine went up a lot, in fact, it went up 25% or more since 2013. So that factor would have to be taken into account )

True, you have to have done very well doing what you did, but it's always a risk. And, where we live, our house value shot up by a lot in the past 6 years. Quite a lot. Easily 30%.
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Old 07-23-2019, 04:08 PM
 
29,856 posts, read 34,929,245 times
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Quote:
Originally Posted by Martha Anne View Post
OK, so you are talking about making a 30% gain "in the market". That's all I really need to know. (Sorry, I agree it's crass to ask a number. I really was only interested in knowing if you were talking about your house value going up (did it? Mine went up a lot, so that would have to be taken into account) or if you were talking about the value of your stocks or funds going up. You answered it.

True, you have to have done very well doing what you did, but it's always a risk. You cannot deny that fact and many don't feel that they can afford to take that risk.
You make a key point. There is mentally being able to take the risk and financially able to take the risk.
Posters are bringing different mind sets and finances to the discussion with minimal clarification.
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Old 07-23-2019, 04:11 PM
 
2,121 posts, read 3,431,981 times
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Quote:
Originally Posted by athena53 View Post
Your question wasn't directed to me but the internal rate of return on my portfolio from July, 2015 when I took out a mortgage, to now, was 40%, or about 9% annually. That excludes taxes paid on investment income but a good deal of it is sheltered in IRAs and some is Berkshire stock, which pays no dividends, so zero taxes. Mortgage rate is 3% fixed. Interesting exercise!

My own situation: bank loaned less than I wanted, but I have a $100K, 15-year mortgage so I've already paid off almost 1/4 of the principal. The payment is very manageable and the equity in the house is less than 10% of my net worth.

Taking out a mortgage in retirement is a very personal decision but I'm happy with my choice.
That is really good!
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Old 07-23-2019, 04:14 PM
 
2,121 posts, read 3,431,981 times
Reputation: 1625
Quote:
Originally Posted by augiedogie View Post
I'm always big on a smaller home no matter what. Smaller heating and cooling bills, smaller tax and insurance bills, smaller repair bills. If the kids come to visit, get them a motel. A week in a motel is cheaper than two more bedrooms all year long.
Oh, I don't know if it's always great to have to put up your family in a motel. It makes economic sense, though. One of the greatest things about my parents having an 11 room Victorian was that when we kids came home there was lots of room, cousins could come, too and it was a great experience. But it does cost more to maintain a large house, for sure.
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Old 07-23-2019, 04:15 PM
 
71,991 posts, read 72,020,102 times
Reputation: 49560
Quote:
Originally Posted by TuborgP View Post
You make a key point. There is mentally being able to take the risk and financially able to take the risk.
Posters are bringing different mind sets and finances to the discussion with minimal clarification.


In the mean time a 50/50 mix of diversified funds and bonds has never lost money in any 10 or 20 year period , never

Real estate is far more variable and local ... you certainly can not make that claim for a house everywhere ...that being the case homes have been far more variable and this fear of risk is over done in a conservative portfolio that does not use individual stocks
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Old 07-23-2019, 04:17 PM
 
2,121 posts, read 3,431,981 times
Reputation: 1625
Quote:
Originally Posted by Sharpydove View Post
How about having no mortgage and that much saved? I still stand by the method of making sure I owe nobody anything in retirement, and my structure is secure. I didn’t realize it was considered old school.
How nice for you. Many people, due to no fault whatsoever of their own, cannot attain those conditions in retirement. Please be sensitive enough to keep that in mind. It's "old school" thinking.

One of my friends lost her husband when she was in her 30's, but she sent herself to a tough graduate school while caring for him during his struggle with cancer. She had to support her son and there is mental illness in the family so income was not always as good as it should have been. I admire her to the ends of the earth for the fact that she works, still in her 70's, to help support herself and her daughter. Another friend worked in the family business but had to go on disability for rheumatoid arthritis. Not everyone can plan as easily as some of the luckier ones. I wish that people would keep this fact in mind when they post about how they did plan well.

Last edited by Martha Anne; 07-23-2019 at 04:35 PM..
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Old 07-23-2019, 04:17 PM
 
29,856 posts, read 34,929,245 times
Reputation: 11781
Quote:
Originally Posted by mathjak107 View Post
In the mean time a 50/50 mix of diversified funds and bonds has never lost money in any 10 or 20 year period , never

Real estate is far more variable and local ... you certainly can not make that claim for a house ...that being the case real estate has been far more variable
Not every retiree is confident they will live 10-20 years.
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