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Primary residence paid off?

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View Poll Results: Mortgage paid off?
Yes and I am <40 yrs old
6
8.22%
Yes and I am 40-50
9
12.33%
Yes and I am 50-60
12
16.44%
No, less then 5 years to go
3
4.11%
No, less then 10 years to go
10
13.70%
No, don’t care, has no priority, rather invest
33
45.21%
Voters: 73. You may not vote on this poll

Primary residence paid off?

Old 03-19-2022, 05:24 PM
  #41  
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Originally Posted by 135tankerdriver View Post
Please answer my question is it not a middle ground between paying off your mortgage early and investing and if not what is?
Are you asking if paying off your mortgage early is a better decision or is a compromise decision that is not as good as my recommendation?
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Old 03-20-2022, 12:23 AM
  #42  
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Originally Posted by SonicFlyer View Post
This is a horrible way of thinking for several reasons. And lots of people make this mistake.

Unless you're in the business of real estate, a primary residence should not be thought of as an investment, but as a consumer item. Investments generate revenue (like a business). Homes usually appreciate over time, but not as much as the market does. And in some areas they actually decrease in value.

You're best off buying the cheapest home you can afford and then properly investing everything else you would have otherwise spent into the market over the long term. That is rock solid... except of course in a situation where there is nuclear war, a complete societal collapse, etc.
Depends if it’s a short or long term home.
Long term you should be able to sell at a profit which is partially negated by interest paid and inflation. If you’ve paid $100k in interest that may be difficult to recoup hence an early pay off. Rental income on a paid off home for about 8-10 years should cover the interest paid.
I follow your reasoning but nobody buys the cheapest home they can afford.
Buy a home outright no mortgage, need money to make money.
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Old 03-20-2022, 04:30 AM
  #43  
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Originally Posted by Armyguy View Post

why not take the biggest Home Equity Line of Credit and invest it since you assume market returns are basically guaranteed.

paying off a mortgage is a guaranteed return on your money.
Home Equity Line Of Credit gets zero tax deductions these days.

Nothing wrong with your strategy, it’s just better executed with a real mortgage on your primary residence.
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Old 03-20-2022, 04:40 AM
  #44  
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It’s a tight race, we’re 50/50
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Old 03-20-2022, 06:54 AM
  #45  
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Originally Posted by SonicFlyer View Post
complete societal collapse
This is my plan, which is why I'm fully invested in bottle caps and ammo...

Originally Posted by TransWorld View Post
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.
You're long term invested in stocks that pay dividends that pay you quarterly or whatever, and that is where your 8% comes from?, or you're actively buying and selling stocks to to get that 8%? Both/Neither?
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Old 03-20-2022, 07:21 AM
  #46  
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Originally Posted by bajthejino View Post
This is my plan, which is why I'm fully invested in bottle caps and ammo...


You're long term invested in stocks that pay dividends that pay you quarterly or whatever, and that is where your 8% comes from?, or you're actively buying and selling stocks to to get that 8%? Both/Neither?
Neither. Stock appreciation (including a small portion from dividends — typically most growth stocks pay few dividends) looking at returns from 1925 - current.
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Old 03-20-2022, 11:57 AM
  #47  
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Originally Posted by TransWorld View Post
Neither. Stock appreciation (including a small portion from dividends — typically most growth stocks pay few dividends) looking at returns from 1925 - current.
Ah, ok. I'm relatively new at all this, besides just dumping money into a 401k. I started investing last year in dividend stocks. Not much change in the actual value of said shares, but at the rate of quarterly dividends, at the rate I'm progressing, my goal is to have my salary replaced in about 10 years.
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Old 03-20-2022, 07:12 PM
  #48  
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Originally Posted by BoilerUP View Post
Bought our house on a 20yr note in Q4'18. Been making substantial extra payments for a year and a half, plan to have it paid off NLT the four year anniversary of closing this year.

"Smart money" says a better return comes from investing, comfort comes from not having to make a monthly debt service payment and saving over $100k in interest over the life of the loan.
We refi-ed and got rock-bottom interest rates which we won't see again any time soon. That in and of itself is money in the bank, I'll drag that out the full 30 years. If your rate is low, need to consider that carefully... a paid off house is probably false security. If you're unemployed, you might have to sell it for the cash... and you won't be able to tap the equity with a new mortgage if you don't have income, not with today's bank rules. I'd rather have the cash in the bank... lot more flexibility that way.
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Old 03-20-2022, 10:03 PM
  #49  
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One philosophy isn’t necessarily better or worse then the other.
Where are you in your life?
If I’m 30 and I’ve just closed on a 30 year fixed at 2.5% and I have 30+ years to go in this industry then yes I might do it the other way.
Especially if I’m relatively low income with small kids and all that costing money the next 18-22 years.
None of the above though.
Investing a smaller amount over a longer period or a larger amount over a shorter period? Net result the same?
These two methods meet somewhere, they have a break even point.
Depending on which side of that point you are determines which method is preferable.
There, I’ve rationalized it for myself.
Now all I have to do is believe it.
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Old 03-21-2022, 07:56 AM
  #50  
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The best advice is to stay in whatever house you buy, drive old cars, and dont get divorced
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