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re: Pay off Debts or continue to Max Roths?
Posted on 8/12/19 at 8:55 am to Brobocop
Posted on 8/12/19 at 8:55 am to Brobocop
What role does time play in your decisions?
If you pay off debt, you have a larger pile to save.
If you keep investing as is, you have a larger pile of exponential growth.
We can't replace time in a compound equation. Remember that your real estate should also be rising in values as well, even without paying it off.
If you pay off debt, you have a larger pile to save.
If you keep investing as is, you have a larger pile of exponential growth.
We can't replace time in a compound equation. Remember that your real estate should also be rising in values as well, even without paying it off.
1
Posted on 8/13/19 at 7:46 am to Brobocop
Shocking how much bad advice has been given.
In what world does it make sense to pay off a loan at 1.9%?
Are we next going to recommend that he stockpiles physical bills under his mattress?
In what world does it make sense to pay off a loan at 1.9%?
Are we next going to recommend that he stockpiles physical bills under his mattress?
Posted on 8/13/19 at 7:50 am to BestBanker
It would take 3 years of paying down debt (sans mortgage) to essentially free up an additional $1,500 a month. Currently we have $1000 going to the Roth's each month.
After the 3 years, we resume Maxing of the Roths.
I could see time playing a huge factor if we were to stop contributing for a longer period of time, but this is a temporary thing.
I do feel like shedding some debt will also be a huge weight lifted as well. We aren't over extended (Total Debt to Income Ratio is ~25%), but it will be nice to only have a mortgage (11% of Income).
After the 3 years, we resume Maxing of the Roths.
I could see time playing a huge factor if we were to stop contributing for a longer period of time, but this is a temporary thing.
I do feel like shedding some debt will also be a huge weight lifted as well. We aren't over extended (Total Debt to Income Ratio is ~25%), but it will be nice to only have a mortgage (11% of Income).
This post was edited on 8/13/19 at 7:53 am
Posted on 8/13/19 at 7:51 am to 632627
Lol. By the time the investment property and lot are paid off, the 1.9% interest vehicle will be nearly paid off. I agree it doesn't make sense to pay off early, other than freeing up cash flow.
Posted on 8/13/19 at 8:00 pm to Brobocop
Can you cut down on your spending a little and do both? Either cut expenses or get a side hustle to throw extra money on the “lot” loan.
I would sell the lot, if possible. Sounds like a big money (and yearly tax) drain with no income. All other loans look more than reasonable, but over 5% interest on a lot at 20 years seems crazy. Unless the “lot” is on a lake or in Manhattan.
I would sell the lot, if possible. Sounds like a big money (and yearly tax) drain with no income. All other loans look more than reasonable, but over 5% interest on a lot at 20 years seems crazy. Unless the “lot” is on a lake or in Manhattan.
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