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re: Investing the difference on a 30yr mortgage
Posted on 9/6/13 at 8:27 pm to SpidermanTUba
Posted on 9/6/13 at 8:27 pm to SpidermanTUba
quote:
Wouldn't it also depend on what the tax details are of the investment? If he's investing it in an IRA or other account where earnings are not taxed, that would make a pretty big difference.
The decision of whether to borrow at 15 vs. 30 is about reducing your cost of capital. What you do with the money is a separate decision, although when comparing investment alternatives of course tax must be considered, just as with the financing side of things.
0
Posted on 9/6/13 at 8:33 pm to WhalingVessel
quote:
Thus really the point of my post. If you were investing the difference how would you invest it? To get the most out of your money but not have so much risk where theres a high likely hood that you lose money instead of make money?
Probably mutual funds.
Posted on 9/6/13 at 8:38 pm to Ace Midnight
I don't like mutual funds because they profit off your dividends.
I'd go with DRIPs. $100/mo. in 4 or 5 equities that have a good history of dividend growth. Set it and forget it. Will outperform any mutual fund b/c there is no middleman.
I'd go with DRIPs. $100/mo. in 4 or 5 equities that have a good history of dividend growth. Set it and forget it. Will outperform any mutual fund b/c there is no middleman.
Posted on 9/6/13 at 8:45 pm to austiger
quote:
I'd go with DRIPs. $100/mo. in 4 or 5 equities that have a good history of dividend growth. Set it and forget it. Will outperform any mutual fund b/c there is no middleman.
I like DRIPs too, but aren't transaction costs going to eat you up on buying the shares like that?
Posted on 9/7/13 at 12:17 am to WhalingVessel
quote:
Thus really the point of my post. If you were investing the difference how would you invest it? To get the most out of your money but not have so much risk where theres a high likely hood that you lose money instead of make money?
Put it in some dividend paying index fund.
Posted on 9/7/13 at 12:17 am to Ace Midnight
quote:
Another point I should make - a lot of people are over-leveraged on signing day. If you're walking in with bond money, or alternative to 20% down, AND you're stretching to qualify for the 30-year note, etc., etc. - these are the exact people who should be shopping/budgeting for a 15-year.
A person who easily qualifies for the 15-year note, has 20% down, no PMI, etc., etc., THAT person is probably going to be in a situation where they can easily manage this balance and take the 30-year in an educated fashion - and THAT person will make money off the 30.
This x1000
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