Go Back  Airline Pilot Central Forums > Pilot Lounge > Money Talk
Primary residence paid off? >

Primary residence paid off?

Notices
Money Talk Your hard-earned money
View Poll Results: Mortgage paid off?
Yes and I am <40 yrs old
6
9.84%
Yes and I am 40-50
7
11.48%
Yes and I am 50-60
10
16.39%
No, less then 5 years to go
3
4.92%
No, less then 10 years to go
6
9.84%
No, donít care, has no priority, rather invest
29
47.54%
Voters: 61. You may not vote on this poll

Primary residence paid off?

Old 03-18-2022, 11:20 AM
  #21  
Gets Everyday Off
 
TransWorld's Avatar
 
Joined APC: Aug 2016
Position: Relaxed
Posts: 6,385
Default

Originally Posted by Armyguy View Post
Whats the tax rate on your 8%? Whats your net after taxes?
About 10-15% of that 8%. So, net about 7% return. Add back in the tax deduction for mortgage interest rate, about 10-15%. So, net bottom line about 8% return.
TransWorld is offline  
Old 03-18-2022, 12:00 PM
  #22  
Gets Weekends Off
 
Joined APC: Feb 2022
Posts: 437
Default

In addition to paying more our lender allows paying months in advance, there isnít a financial advantage but for pilots if we find ourselves on furlough in the future you have months before becoming delinquent.
Round Luggage is offline  
Old 03-18-2022, 06:14 PM
  #23  
All is fine at .79
Thread Starter
 
TiredSoul's Avatar
 
Joined APC: Sep 2016
Position: Paahlot
Posts: 3,882
Default

Originally Posted by Round Luggage View Post
In addition to paying more our lender allows paying months in advance, there isnít a financial advantage but for pilots if we find ourselves on furlough in the future you have months before becoming delinquent.
Thatís almost the same as saving yourself though, one small difference. Theyíre the ones drawing the interest. Thatís what you have an emergency fund for, 6-12 months of expenses.
TiredSoul is offline  
Old 03-18-2022, 08:38 PM
  #24  
Gets Weekends Off
 
Joined APC: Feb 2022
Posts: 437
Default

Originally Posted by TiredSoul View Post
Thatís almost the same as saving yourself though, one small difference. Theyíre the ones drawing the interest. Thatís what you have an emergency fund for, 6-12 months of expenses.
Sure, in theory.
Round Luggage is offline  
Old 03-19-2022, 01:22 AM
  #25  
Line Holder
 
Joined APC: Aug 2016
Posts: 77
Default

I think a good middle ground is to invest and then when that investment is enough to pay off your mortgage after taxes then pay off your mortgage. In this scenario you want to time that investment so that itís on an upswing in regards to returns of course so your timing/time frame has to be flexible.
135tankerdriver is offline  
Old 03-19-2022, 03:36 AM
  #26  
All is fine at .79
Thread Starter
 
TiredSoul's Avatar
 
Joined APC: Sep 2016
Position: Paahlot
Posts: 3,882
Default

Originally Posted by Round Luggage View Post
Sure, in theory.
Not not in theory.
Thats exactly what we have, 9-12 months of expenses including mortgage payments.
We could stretch it to 12 if we go back to basic cable, stop eating out and sell my $2000 car.
TiredSoul is offline  
Old 03-19-2022, 06:26 AM
  #27  
Gets Weekends Off
 
Joined APC: Feb 2022
Posts: 437
Default

Originally Posted by TiredSoul View Post
Not not in theory.
Thats exactly what we have, 9-12 months of expenses including mortgage payments.
We could stretch it to 12 if we go back to basic cable, stop eating out and sell my $2000 car.
Everyone has a plan until they get hit in the mouth.-Tyson I think.
Round Luggage is offline  
Old 03-19-2022, 07:44 AM
  #28  
Gets Everyday Off
 
TransWorld's Avatar
 
Joined APC: Aug 2016
Position: Relaxed
Posts: 6,385
Default

Originally Posted by 135tankerdriver View Post
I think a good middle ground is to invest and then when that investment is enough to pay off your mortgage after taxes then pay off your mortgage. In this scenario you want to time that investment so that it’s on an upswing in regards to returns of course so your timing/time frame has to be flexible.
If one does a rigorous economic analysis of their options, the “compromise” middle ground you are suggesting is not the best financial decision. It will cost them tens of thousands of dollars.
TransWorld is offline  
Old 03-19-2022, 08:11 AM
  #29  
Gets Weekends Off
 
Joined APC: Jan 2020
Posts: 359
Default

Originally Posted by Round Luggage View Post
Sure, in theory.
kinda like banking on 8% returns.

My thoughts:
My 401k is invested in the stock market. With that said, the USA has gone thru some events that have given a tailwind to the stock market and this pushed it along to record highs. First, the loss of pensions and the invention of 401K's for retirement savings. Second, the big bubble of Baby Boomers saving for retirement.

Baby Boomers are now starting to have take out assets from their 401K's. There is a demographic shift involving the country getting older by the year. Just ask yourself if older people will stay invested in stocks as they hit 70? 75? 80? This graying of America will be a tailwind to the stock market.

Just my thoughts on it but after maxing out retirement accounts I feel paying off all debt is a good move and it diversifies your assets.

Your 8% number isnt a bad planning number but here is the range of returns for 20yr periods since way back in the 1800's till now:
  • 20-year: From 0.5% to 13.2%
The worst 20yr periods for the stock market was
  • 1928: the return was about 2.5% for the next 20 years
  • 1958, 59 & 61: about 5-5.5% annual return
This is a good discussion, just trying to provide an alternative point of view.
Armyguy is offline  
Old 03-19-2022, 08:19 AM
  #30  
Line Holder
 
Joined APC: Aug 2016
Posts: 77
Default

Originally Posted by TransWorld View Post
If one does a rigorous economic analysis of their options, the ďcompromiseĒ middle ground you are suggesting is not the best financial decision. It will cost them tens of thousands of dollars.
Is it not a middle ground between paying extra principal on your mortgage and investing extra in retirement funds? If itís not a middle ground please enlighten us on what isÖ
135tankerdriver is offline  
Related Topics
Thread
Thread Starter
Forum
Replies
Last Post
queue
JetBlue
8
08-07-2018 01:35 PM
Cheddar
American
88
07-17-2018 03:55 PM
njd1
PSA Airlines
9
03-27-2018 03:00 AM
sealandair
Career Questions
0
07-16-2017 01:29 PM

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Thread Tools
Search this Thread