Paid Off Homes (principle, determine, senior, year)

[mathjak107]

That does not dispute the fact an expense can never change gross income -ever.
Cutting an expense has a bottom , increasing investment income has no limits , you can never call them the same. Not paying a mortgage will never be the same as increasing investment income. They may match and equal each other TEMPORARILY until there is nothing left to cut BUT THAT IS THE EXTENT OF ANY COMPARISON

You can stop with the personal attacks .

[kyam11]

Originally Posted by mathjak107

That does not dispute the fact an expense can never change gross income -ever.
Cutting an expense has a bottom , increasing investment income has no limits , you can never call them the same.

You can stop with the personal attacks .

Again. I could not care less about anything you say that doesn't have to do with risk free returns.

1+1 =2


You posting 2x2=4 or 2x2=5 I simply do not care. Even so when did I ever make the claim that what you just wrote is not correct. I didn't. NOT ONCE.

There are no personal attacks. I was flat out wrong earlier. I had no clue what I was talking about when I said Zuckerberg did not have a mortgage . Difference is I can admit that.

[mathjak107]

I figured your answer could not prove me wrong ,I rest my case , growing income and cutting an expense can never be the same , only the amounts can be equal at times temporarily until investment income goes up or down and expenses rise and there is nothing left to cut

[kyam11]

Originally Posted by mathjak107

I figured as much ,I rest my case

Huh? You rest your case that I never disagreed with anything else you had to say and never made an opinion on anything else you had to say. My answer never tried to prove you wrong. You were arguing with yourself. I simply did not care. Not to mention without having read most of what you posted (talking about the non risk free subject) since it was rambling I have no clue whether it is right or wrong. As of this second it is possible everything you wrote was 100% correct or 100% incorrect. It is possible that everything written in a German newspaper 3 days ago was 100% correct or 100% incorrect. I didn't read that either.

[mathjak107]

You keep claiming paying a mortgage is the same as bond interest . But it is never the same .. one increases income , the other cuts an expense and they can never be the same. Only the effects to cash flow may temporarily appear the same effect so we are definitely in disagreement

[kyam11]

Originally Posted by mathjak107

You keep claiming paying a mortgage is the same as bond interest . But it is never the same .. one increases income , the other cuts an expense and they can never be the same. Only the effects to cash flow may temporarily appear the same effect so we are definitely in disagreement

I never once said paying a mortgage is the same as bond interest. Please tell me where I used the word bond and mortgage in the same sentence.

I merely regurgitated what is readily accepted in the finance community and then posted links that support that. I'd love to take credit that I somehow came up with that, but what I wrote is first year finance info that is taught today and is still mentioned in articles all over the world.

[joee5]

Many continue to hold a mortgage for tax write off purposes. Because a homeowner holds a mortgage does not mean they aren't financially responsible. C'mon man

[kyam11]

Originally Posted by joee5

Many continue to hold a mortgage for tax write off purposes. Because a homeowner holds a mortgage does not mean they aren't financially responsible. C'mon man

Incomplete equation.

you should have said "Many continue to hold a mortgage for tax write off purposes and instead use the money elsewhere."

[shokwaverider]

No mortgage for us. Saves us $4,500 per month in payments on our current home all things being equal with a 30% down Payment and modest interest rate. NO CONTEST......

[SuiteLiving]

Originally Posted by mathjak107

I do like him and I agree with his statement that paying the mortgage eliminates the cost of the mortgage but I disagree with his statement from an accounting standpoint that it is generating an roi by itself.

Like i said I can cancel cable tv and get the same effect on my free cash flow . In fact I rent and I can move from a 2 bedroom apartment to a one bedroom and eliminate that expense as well and see even more cash flow improvement and none of that constitutes an roi . Like kites said a mortgage is just another expense and represents your cost of housing .

From an accounting standpoint they all take away from the income you have and eliminating them are just a reduction in the expense side of things . Your revenue side remains unchanged.
Adding interest from a bond increases the revenue side unlike changes in the expense side which do not change revenue. Reducing the expense side adds to the free cash flow in the form of increased profit but income remains unchanged .

Financial guys tend to look at roi not from an accounting standpoint and they blur the difference between increasing income vs cutting an expense. Yet when stocks report they are very carefull to look at profit vs revenue because profit can come from cost cutting which has a bottom so right off the bat you can see a contradiction in things and cutting expenses is now not the same as increasing income

To any accountant reducing costs is never the same as increasing revenue although temporarily they can appear the same . But that is only until the expense is cut and other expenses keep rising And income stays the same . The difference between the two becomes very apparent when there is nothing left to cut.

Calling it the same just makes the math easier to understand but it can never be that receiving interest which increases income is the same as paying interest which comes out of existing cash flow and reduces what you have in hand. Two different sides of a balance sheet

I'm not sure what accountants you hang out with but they didn't pass the same exam I did.

First of all, cancelling cable is not the same thing as eliminating a liability from your balance sheet. If you believe they are the same, then you fundamentally haven't a clue about accounting.

Stock buybacks produce no revenue, yet companies evaluate the deployment of capital based on the ROI that a stock buyback is expected to produce.

In most instances, an investment in technology produces no revenue, yet software is always sold accompanied by an ROI analysis of what the customer can expect to get for its investment.