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Message
re: Paying off mortgage
Posted on 6/25/21 at 8:27 pm to tenderfoot tigah
Posted on 6/25/21 at 8:27 pm to tenderfoot tigah
quote:
I pay $500 extra a month, I save 35k in total interest. It would shorten my loan by 69 months.
If I bought $500 of SPY or QQQ each month for the same 171 months, I would earn 97K in interest.
But don’t you also have to calculate in the potential gains on the extra available capital for investment for the 69 months? I would imagine it makes it a much closer argument
1
Posted on 6/25/21 at 8:33 pm to dltigers3
quote:
But don’t you also have to calculate in the potential gains on the extra available capital for investment for the 69 months? I would imagine it makes it a much closer argument
That would bring the totals to 87k vs 97k making it a much closer argument.
Posted on 6/25/21 at 9:38 pm to tenderfoot tigah
That’s what I figured, but couldn’t do the math myself without knowing your mortgage info.
Posted on 6/25/21 at 10:44 pm to LSUFORLIFE
quote:
Pay off all your debt then invest
Bingo winner winner
Posted on 6/25/21 at 11:39 pm to Double Oh
quote:
Bingo winner winner
Depends on your definition of being a winner. If you can't emotionally handle low interest debt then by all means pay it off.
Posted on 6/26/21 at 8:45 am to LSUisKING12
No free er feeling than being debt free. The rebound you can make is crazy if you are disciplined. Once debt free, everyday living is relatively inexpensive. I been debt free for 8 years now. FREEDOM!!!
Posted on 6/26/21 at 9:23 am to tenderfoot tigah
quote:
That would bring the totals to 87k vs 97k making it a much closer argument.
The $500/mo in QQQ should continue for 69 months, too.
Need to do PV calculation on the 2 cases (time value...$ today not same as $ tmr)
The financial math will show investing makes more $ (assuming reasonable risk/return). But, this case is more about psychology than financial math. Peace of mind for some is invaluable.
Posted on 6/26/21 at 9:28 am to Popths
quote:
No free er feeling than being debt freeNo free er feeling than being debt free
Congratulations! Well done.
Best plan for debt (bad debt...credit cards, private student loans, etc in particular) is to NOT have any - ever. Their cost is cancer to wealth-building.
Posted on 6/26/21 at 11:27 am to tigersfan1989
quote:
I really think we should have a designated permanent thread titled “Info for people that want to know should I invest or payoff mortgage”. It could be a one stop shop for those people that way it doesn’t have to be hashed out on this board every couple days. You always hear the same things mentioned over and over on both sides of the argument. While both sides of the argument have valid points we read it on every thread made like this. Really does bog down this board.
Amen. These threads are occurring with way too much regularity. There’s always some posters that emerge with horrible financial advice acting like it is gospel. I understand that this isn’t the most straightforward topic for some to wrap their minds around but it’s perfect for a sticky.
Posted on 6/28/21 at 7:02 am to LSUFORLIFE
quote:
Pay off all your debt then invest
not if the debt is cheap.
Posted on 6/28/21 at 7:07 am to Popths
quote:
No free er feeling than being debt free. The rebound you can make is crazy if you are disciplined. Once debt free, everyday living is relatively inexpensive. I been debt free for 8 years now. FREEDOM!!!
when you get to my age you will meet many who are debt free.
I have never ever met anyone who regrets taking that step
I know I don’t regret it for a single second.
It’s changed my life exponentially
Posted on 6/28/21 at 10:25 am to 632627
But you get a higher return. Leverage is only a real advantage if the person is really rich. Holding a mortgage will only net OP roughly 7% return. Tons of better options within the market.
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