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Started By
Message
re: Extra cash every month- what to do with it?
Posted on 3/21/11 at 2:01 pm to cbtullis
Posted on 3/21/11 at 2:01 pm to cbtullis
quote:
Lets look at an example:
Lets say you have a 500,000 mortage. A 30 year mortgage at 5% you are paying $2672.97 a month, a 15 year mortgage you are paying $3937.56 a month. Thats a difference of $1264.59 a month
Lets say you got an annual return of 8% on that 1264 a month. That would equate to $1,897,258 after 30 years. Lets say you paid the 15 year mortgage off and then invested $3937 a month at an annual rate of 8% you would have $1,371,629
So either way the house is paid off in 30 years and you either have 1.9 millon roughly or 1.4 million roughly.
not too mention all the tax deductions from having a mortgage.
Could be like when peoples money lost 30-50% in a few years past. Some gains have been there. But like with anything, there is that thing.....
"Past Performance Is Not Indicative of Future Results!"
The other thing that comes into play, more questions on this guys life. "Need more info," comes into play all the time.
1
Posted on 3/21/11 at 3:08 pm to cbtullis
quote:
not too mention all the tax deductions from having a mortgage.
This comment is often misguided, a mortgage deduction is no reason to load up on a big mortgage or reach for maximum dollar house purchase. Many people who have a mortgage are better off with the standard deduction and who knows what happens to tax code changes in the future where mortgage interest may not be deductible. I am not a huge fan of most of the interviews on yahoo finance, but this is a nice contrarian piece on buying a home.
Why I Will Never Own a Home Again
quote:
A) Cash Gone. You have to write a big fat check for a downpayment. “But its an investment,” you might say to me. Historically this isn’t true. Housing returned 0.4% per year from from 1890 to 2004. And that’s just housing prices.
Posted on 3/21/11 at 4:21 pm to LSUDad
When I have extra cash I buy more blue chips. This year I put an extra 5K into PG; 5K into United Tech; 5K into Chevron and 5K into my Mutual Fund managed by Michael Palin.
Posted on 3/21/11 at 5:55 pm to cbtullis
quote:
Agreed. And with that type of extra money I would be looking at some permanent with a company that pays good didvidens as that is something like a Roth where you can get tax free growth
Get term insurance only, put the money saved in a actual Roth IRA.
Posted on 3/22/11 at 8:56 pm to JWS3
(no message)
This post was edited on 11/27/11 at 10:09 pm
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