# Is it worth paying mortgage off?



## cakebaker

Gamekeeper said:


> He used high levels of leverage, without adequate cash flow
> A paper millionaire with no money to spend.
> A pretty common mistake with real estate brokers. Used to be able to use the commission as the downstroke
> Couple that with some land contracts and presto chango you’re a millionaire.
> 
> Banks are much tighter now that most senior lenders have seen 2 collapses in their careers. Almost never hear of a character loan anymore.


I just read his parents were in the realtor business as well. I see after he filed bankrupt he found Christ. I've heard it all.


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## Gamekeeper

They say the older you get, the smarter your parents become. Dave says he gives his grandmother’s advice.

Dave’s advice is right down the middle of the risk-free road.
In the absence of any other advice, anybody can make use of his program without harm.

There’s nothing wrong with it.
It’s slow, it’s safe, it’s secure.
He’s like Suze Orman.

Good advice to follow if you have enough money coming in.

since I listen to his podcast at 5:30 in the morning while I’m working out, the desperate financial condition of most Americans is not lost on me.
Particularly saddening to me, is the plight of our young military families.
In general, people’s financial lives are a mess.


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## Petronius

Shoeman said:


> Back in ‘96 GM bought the Renaissance Center and the writing was on the wall. I had a great business within the old building.


I get the name now, Shoeman. Back in the 80s and early 90s, I worked down the street in the old state building on Woodward. You did some work for me.


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## Lund Explorer

Gamekeeper said:


> So simply put, people seem to agree having 6 mos expenses set aside is a good thing.
> If that is 5-8k, fine, leave it at the credit union.
> What if it's 120k? What then?


I'm going to need a lot more coffee this morning to wrap my mind around what kind of monthly income, debt payments, and living expenses require $20k per/month to make ends meet. 

First impressions say that anyone in that boat, most likely falls into the same calculations (percentage wise) as the guy that only need $1,500 a month.


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## sureshot006

Lund Explorer said:


> I'm going to need a lot more coffee this morning to wrap my mind around what kind of monthly income, debt payments, and living expenses require $20k per/month to make ends meet.
> 
> First impressions say that anyone in that boat, most likely falls into the same calculations (percentage wise) as the guy that only need $1,500 a month.


If you read his post again you'll probably see he is not saying someone needs 20k/mo to make ends meet.


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## Lund Explorer

sureshot006 said:


> If you read his post again you'll probably see he is not saying someone needs 20k/mo to make ends meet.


Even caffeine deprived that early in the morning, what I read was 

_"So simply put, people seem to agree having 6 mos expenses set aside is a good thing.
If that is 5-8k, fine, leave it at the credit union.
What if it's 120k? What then?"
_
I guess I assumed that 6 months of expenses included all those things that make ends meet. 120k / 6 mos = 20k.


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## Fishndude

Lund Explorer said:


> I was very happy and fortunate to take my parents advice to invest some of my money into CD's. It was a habit to pump a few more dollars into a dive year CD in year, and they sure did grow those first ten years. When the housing bubble burst, I got the chance to use those maturing CD's to purchase a couple of repo. homes as well as paying off the mortgage of our oldest son who was in danger of losing his home. We finally flipped the repos, and even more important, our son (who is now disabled) and his family are still in their home.
> I don't see anything wrong with investing in the market, but I live by the old saying that if you spread out, one grenade doesn't get all of you.


CDs are a great shelter in a declining market. They don't return much when markets are climbing, or high, compared to more aggressive investments; but they are relatively safe investments.


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## Gamekeeper

Lund Explorer said:


> Even caffeine deprived that early in the morning, what I read was
> 
> _"So simply put, people seem to agree having 6 mos expenses set aside is a good thing.
> If that is 5-8k, fine, leave it at the credit union.
> What if it's 120k? What then?"
> _
> I guess I assumed that 6 months of expenses included all those things that make ends meet. 120k / 6 mos = 20k.


You don't know anyone that has a household annual income of 250k?
Add it up
What kind of lifestyle do two adults each earning well typically live?
2 cars, 2 houses, 2 retirement savings, 2 big property taxes, higher income taxes, 5 insurances, 3 kids, private school, extra curricular's, 2 electric, 2 gas, start imagining and add it up.
Somebody leaves employment, and Whack!


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## Lund Explorer

Gamekeeper said:


> You don't know anyone that has a household annual income of 250k?
> Add it up
> What kind of lifestyle do two adults each earning well typically live?
> 2 cars, 2 houses, 2 retirement savings, 2 big property taxes, higher income taxes, 5 insurances, 3 kids, private school, extra curricular's, 2 electric, 2 gas, start imagining and add it up.
> Somebody leaves employment, and Whack!


So your initial post made it sound like you didn't think it was wise to put $120k into the credit union. What alternative would you suggest?

Keep in mind that investing it into stocks puts it at risk.


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## Gamekeeper

Lund Explorer said:


> So your initial post made it sound like you didn't think it was wise to put $120k into the credit union. What alternative would you suggest?
> 
> Keep in mind that investing it into stocks puts it at risk.


I don't think it IS wise watching a big cash balance evaporate.
You are losing $250.00 a mos in purchasing power on $120,000.00
I just need liquidity and access.
I use a fidelity account and can move stuff around on my phone.
I said in another thread to just stick it in a dividend fund, when someone was cashing out of a house,
but there are any number of other places.

I've never had a situation requiring a big cash payment (including Cancer treatment) that wasn't foreseeable. 
If you are current when things go sideways, you have plenty of time to get situated. 
Even in dual income households, unless they both work at 1 place, there is reasonable time to get cash together.

If people want to sit on big piles of cash at a bank and are happy with that, who am I to argue.

I view cash the same way I do a shovel. It's a tool to do work with.


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## kroppe

Gamekeeper, what is your view on how many months of household working capital should be kept in bank or credit union checking and savings accounts?

I define working capital here as cash to pay for groceries, gasoline, etc. Not a rainy day fund.


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## sureshot006

Lund Explorer said:


> Even caffeine deprived that early in the morning, what I read was
> 
> _"So simply put, people seem to agree having 6 mos expenses set aside is a good thing.
> If that is 5-8k, fine, leave it at the credit union.
> What if it's 120k? What then?"
> _
> I guess I assumed that 6 months of expenses included all those things that make ends meet. 120k / 6 mos = 20k.


I see it as 6 months might be a 20k but you have 120k stashed. So do something with the extra 100k. Maybe I am the one who interpreted wrong.

It's not unheard of for a couple to bring in well over 20k/mo... heck I work with folks who make that on their own. Should they be spending that much a month to live? Probably not.


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## Lund Explorer

sureshot006 said:


> I see it as 6 months might be a 20k but you have 120k stashed. So do something with the extra 100k. Maybe I am the one who interpreted wrong.
> 
> It's not unheard of for a couple to bring in well over 20k/mo... heck I work with folks who make that on their own. Should they be spending that much a month to live? Probably not.


I'm just reading it and trying to figure it out. Poster said what if someone's six month cushion was $120k. Putting aside $20k would give that person 30 days to scrounge up cash for the 2nd month's bills, unless of course the rest of it was sitting in a tanking market.

In the long run, it doesn't mean much to me as I can't imagine my fiscally conservative lifestyle to ever have gotten to that point.


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## Gamekeeper

kroppe said:


> Gamekeeper, what is your view on how many months of household working capital should be kept in bank or credit union checking and savings accounts?
> 
> I define working capital here as cash to pay for groceries, gasoline, etc. Not a rainy day fund.


It depends on where your cash flow comes from.
And how steady, and how easily reproduced it is.
retired, fixed income?

Budget for big ticket items, plan when you want to do them, set that money aside, if it turns out by the end of the month you were wrong, increase it or decrease it next month.
There’s more coming.

Lab researcher, where it takes a year to find a new job, and they’re typically not where you are currently living, probably 2-3 in cash, but access if needed to 6-8 mos worth because reemployment takes a long time, and setting up a new address is a cash suck.

A tradesman? Where they get max of 362/wk unemployment, for max of 20 weeks? If they are used to making 100k/yr, they need a couple mos cash, and the rest just accessible. They know that they’ll have to hit the road by month 2.

every working person’s options for re-creating their cash flow is slightly different.

It’s been my observation that people go spending when their cash pile gets past a certain threshold.
People seem more comfortable wearing the yoke than being free from it.

All that said, Ramsey’s mantra of 3-6 mos emergency fund in cash must have some data behind it.
Evidently there are people that let 6 mos of expenses just sit in the bank
With access to invested money so easy and fast (like debit card access to money market accounts), I can’t quite get my mind around his rationale.

Suze Orman is even worse. Her conservative approach would waste a working person’s life efforts just from inflation losses.


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## kroppe

Thanks. I'm seeing the word emergency and unemployment in the reply, that's not what I am asking.

In the isolated instance of continuous (steady) cash flow, aka employment, what is the guideline for working capital for basic staples?


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## trucker3573

Just make sure you have enough to retire and do whatever you want to. There will always be a way you could have made more. Don’t beat yourself up just make sure you have enough. 


Sent from my iPhone using Tapatalk


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## Gamekeeper

kroppe said:


> Thanks. I'm seeing the word emergency and unemployment in the reply, that's not what I am asking.
> 
> In the isolated instance of continuous (steady) cash flow, aka employment, what is the guideline for working capital for basic staples?


I guess I'm not understanding your question.
Money coming in to you is cash flow in, spending it is cash flow out.

Emergency funds as I see them are so that there is no interruption of flows in, due to unforseen circumstances. So, car breaks down? Fix it, move on, don't borrow to do it. No missed work, no slowing of the flow. Furnace pukes? Call a guy. Don't borrow to deal with it.
I'm pretty sure Ramsey's 3-6 mos is related to things that stop in-flow, and how long it could take for you to get back on line, recover from illness, reshuffle your household outflows, sell some cash drains, etc.


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## sureshot006

kroppe said:


> Thanks. I'm seeing the word emergency and unemployment in the reply, that's not what I am asking.
> 
> In the isolated instance of continuous (steady) cash flow, aka employment, what is the guideline for working capital for basic staples?


I'd have 2 months worth minimum just to be safe


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## Gamekeeper

sureshot006 said:


> I'd have 2 months worth minimum just to be safe


It never hurts to know what your nut is.
Get a budget planner, fill it out with real numbers.

Multiply it by 3.
Reason being is 3-4 weeks can go by before an UE check hits, and, it might take someone 3-4 weeks to recognize their situation. Like in the trades, jobs get delayed or cancelled.
That burns a month's cash, and the next round of bills are only 2 weeks away.
So, 3 makes sense to me.

But again, Ramsey and I disagree on where it should be sitting.


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## TK81

Gamekeeper said:


> It never hurts to know what your nut is.
> Get a budget planner, fill it out with real numbers.
> 
> Multiply it by 3.
> Reason being is 3-4 weeks can go by before an UE check hits, and, it might take someone 3-4 weeks to recognize their situation. Like in the trades, jobs get delayed or cancelled.
> That burns a month's cash, and the next round of bills are only 2 weeks away.
> So, 3 makes sense to me.
> 
> But again, Ramsey and I disagree on where it should be sitting.


Most people would be lucky if their unemployment checks even covered their house payment. Our company has forced one week furloughs on us (salaried) two or three times in the last dozen years. My unenjoyment check was less than 25% of my pay. Two guys I worked didn't even bother filing the last time because of the hassle. I only bring this up because unemployment compensation is nice, but it surely isn't going to keep one afloat if they have any kind of debt.


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## kroppe

Yes, sureshot answered the question I should have asked - what is the minimum reserve? 

The discussion surrounding where to park cash seems to apply in my view to funds in excess of the minimum to operate a household. The 2-3x monthly expenses feels like the right amount to have in savings or checking for immediate monthly needs. Funds in excess of 2-3x are candidate for a liquid interest bearing account. Does anyone support that argument, and the definitions below? 

2-3 months of expenses in reserve = working capital for staples and small unexpected expenses
anything in excess of 3 months of expenses in reserve = emergency fund


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## TrailMarker

I probably missed it and maybe it was mentioned, because 9 pages is a lot of reading. But, let's suppose a guy kept his house mortgaged to the hilt, for asset protection? It would be tough for a slip and fall case to push you out of your house if the bank still holds the note at 80% loan to value.

Just a thought.


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## Gamekeeper

kroppe said:


> Yes, sureshot answered the question I should have asked - what is the minimum reserve?
> 
> The discussion surrounding where to park cash seems to apply in my view to funds in excess of the minimum to operate a household. The 2-3x monthly expenses feels like the right amount to have in savings or checking for immediate monthly needs. Funds in excess of 2-3x are candidate for a liquid interest bearing account. Does anyone support that argument, and the definitions below?
> 
> 2-3 months of expenses in reserve = working capital for staples and small unexpected expenses
> anything in excess of 3 months of expenses in reserve = emergency fund


I had to think through that a bit.
We budget
Knowing what’s coming in and when, as well as what goes where and when changes the working capital calculation.
Certainly sitting on a couple mos expenses isn’t excessive


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## jjlrrw

sureshot006 said:


> Ain't worth it at say 4%. Just my opinion. *You can get 4-5% on something as simple as a municipal bond*.


Point me in the right direction please...


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## sureshot006

jjlrrw said:


> Point me in the right direction please...


Look them up through Fidelity or whatever. Here is an eye chart.


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## jjlrrw

Gamekeeper said:


> How about 35?


Not sure I understand, So you have been carrying huge mortgages for 35 years to keep payments low so you can feed investments?

every $100000 in loans at 3.5% you are paying ~$3500 a year in interest * 35 years = $112,000 if you paid it off in 15 years you could have invested Principal and interest of $715 for every 100,000 you borrowed every month for the last 20 years and have $750K in the bank plus the extra you have been feeding investments.


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## jjlrrw

FullQuiver said:


> My house has been paid off for quite some time and I haven't carried any debt at all for years.. I survived very serious health issues a couple of decades ago and carrying excessive debt would have been devastating.. Even with long term disability insurance and ssdi I make about 40% of what I used to make 22 years ago when I went through my brain cancer.. I had $250k in a 401k and $50k in cash in the bank when I became sick but with over 2 years of intense treatments and over a million dollars (closer to 2 million) in Dr's bills I was drained of all my investments as well as cash.. Sure you can plan for most circumstances but the biggest factor in defining how well you live in later years is your willingness to live within your means...
> 
> So as far as investing I would say invest in your house first you do not know what the future holds and it is too easy to end up on the streets from the simplest of tragedies...


WOW that was a tough road, glad you came out the other side. Another advantage to owning a house if you get sued they can't take your home but can clean out accounts.


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## jjlrrw

sureshot006 said:


> Look them up through Fidelity or whatever. Here is an eye chart.
> View attachment 491019


Thanks, been thinking about these but didn't know much about them.


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## sureshot006

jjlrrw said:


> Thanks, been thinking about these but didn't know much about them.


Google will provide a good bit of detail. One of the good things is that many of the options are tax free.


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## Gamekeeper

jjlrrw said:


> Not sure I understand, So you have been carrying huge mortgages for 35 years to keep payments low so you can feed investme nts.


Huge is relative, I guess.

But, yes, absolutely.
every loan, excluding automobiles, is/was/has been measured against potential returns, our cash flows, and tax consequences.

Along the way, every household makes choices.
Time wise, they look like a trumpet or Herald's horn. Blooming/flaring decades later.
Economic choices made decades ago, bloom or don't bloom, years later.

The old Honda wagon I drove for 400k miles, is turning into an Aston Martin when I retire.


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## FREEPOP

Gamekeeper said:


> The old Honda wagon I drove for 400k miles, is turning into an Aston Martin when I retire.


It woulda got you much more tail at 30 than it will at 60


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## TrailMarker

jjlrrw said:


> Not sure I understand, So you have been carrying huge mortgages for 35 years to keep payments low so you can feed investments?
> 
> every $100000 in loans at 3.5% you are paying ~$3500 a year in interest * 35 years = $112,000 if you paid it off in 15 years you could have invested Principal and interest of $715 for every 100,000 you borrowed every month for the last 20 years and have $750K in the bank plus the extra you have been feeding investments.


Virtually none of this calculation is accurate, because you pay less interest each year in a loan, that's the concept you know, you pay less interest each year and then voila, your loan is paid off. A 35 year mortgage at 3.5% as you suggested would be a payment $413, and over the course of 35 years, you would pay $73,600 in interest. Comparatively, if you obtained a 15 year mortgage at the same 3.5% (doubtful the rates would be the same), your payment would be $715, and you would pay $28,700 in interest over the course of 15 years. However, in a 35 year plan vs 15 year plan, the difference in payment is about $300 monthly. $300 monthly saved for 15 years equals $54,000 which could be used/invested differently as well, hopefully with a return at higher than 3.5%.

The fact that you would continue to invest $715 monthly for 20 years is a little misleading, because the 20 years of saving $715 monthly = $171,600

You bamboozled me Sir, I want to be a millionaire though, where do I sign up? :gaga:


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## Luv2hunteup

TrailMarker said:


> Virtually none of this calculation is accurate, because you pay less interest each year in a loan, that's the concept you know, you pay less interest each year and then voila, your loan is paid off. A 35 year mortgage at 3.5% as you suggested would be a payment $413, and over the course of 35 years, you would pay $73,600 in interest. Comparatively, if you obtained a 15 year mortgage at the same 3.5% (doubtful the rates would be the same), your payment would be $715, and you would pay $28,700 in interest over the course of 15 years. However, in a 35 year plan vs 15 year plan, the difference in payment is about $300 monthly. $300 monthly saved for 15 years equals $54,000 which could be used/invested differently as well, hopefully with a return at higher than 3.5%.
> 
> The fact that you would continue to invest $715 monthly for 20 years is a little misleading, because the 20 years of saving $715 monthly = $171,600
> 
> You bamboozled me Sir, I want to be a millionaire though, where do I sign up? :gaga:


Becoming a millionaire is not all the difficult. All it takes is the willingness to invest and time. There are continuing education classes you can take to give you the basics. Keep in mind first million is the hardest. 
.


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## FREEPOP

and a million ain't what it used to be


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## jjlrrw

TrailMarker said:


> Virtually none of this calculation is accurate, because you pay less interest each year in a loan, that's the concept you know, you pay less interest each year and then voila, your loan is paid off. A 35 year mortgage at 3.5% as you suggested would be a payment $413, and over the course of 35 years, you would pay $73,600 in interest. Comparatively, if you obtained a 15 year mortgage at the same 3.5% (doubtful the rates would be the same), your payment would be $715, and you would pay $28,700 in interest over the course of 15 years. However, in a 35 year plan vs 15 year plan, the difference in payment is about $300 monthly. $300 monthly saved for 15 years equals $54,000 which could be used/invested differently as well, hopefully with a return at higher than 3.5%.
> 
> The fact that you would continue to invest $715 monthly for 20 years is a little misleading, because the 20 years of saving $715 monthly = $171,600
> 
> You bamboozled me Sir, I want to be a millionaire though, where do I sign up? :gaga:


I get it but reading post #12 "So, I carry huge mortgages at low rates and long terms, and pour extra cash into other higher performing investments."
and then saying it's been going on for 35 years in post #19 "How about 35?"

Told me they are not ever paying down loans and been at it for 35 years so my thought was they were never seeing the back side of the loan when the interest is less than the principle. Anyway reason I started my post out saying "Not sure I understand"

Read Post #133 and #134 about becoming a millionaire fastest way is paying off the mortgage and continue to live like you have one.


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## TrailMarker

Luv2hunteup said:


> Becoming a millionaire is not all the difficult. All it takes is the willingness to invest and time. There are continuing education classes you can take to give you the basics. Keep in mind first million is the hardest.
> .


Sage advice there, first million is the hardest. I suppose I could have been there sooner if it wasn't for @HUBBHUNTER and his 2K Canada trips haha


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## FISHMANMARK

TrailMarker said:


> Sage advice there, first million is the hardest. I suppose I could have been there sooner if it wasn't for @HUBBHUNTER and his 2K Canada trips haha



I think the quickest way to become a millionaire is to stop giving half of your stuff to ex-wives.


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## TrailMarker

FISHMANMARK said:


> I think the quickest way to become a millionaire is to stop giving half of your stuff to ex-wives.


weird how you implied that they weren’t necessarily my ex-wives.


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## 98885

FISHMANMARK said:


> I think the quickest way to become a millionaire is to stop giving half of your stuff to ex-wives.


It sure adds up


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## milanmark

Lumberman said:


> It’s a personal call based on your appetite for risk. It’s about a 50/50 split in fiscal world.
> 
> Rates are so low right now it’s hard to make an argument for paying off your house. Other then you can’t get into trouble with a paid off house.


When I retired there were three of us with similar circumstances, my mortgage was paid off theirs weren't... we retired and my pension covered my bills their's didn't and they immediately had to go out and find a job to make ends meet... just to make the mortgage payment! We were all salaried at Ford and they felt they needed to take the buyout as they would just get the boot otherwise with no buyout.... needless to say they didn't run right out and find jobs anywhere near the pay of the one they left. They were still working I was fishing!


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## sureshot006

People retiring today seem to mostly have traditional pensions, and if course social security. I dont assume I will have SS and I definitely dont have a traditional pension. So, my retirement money IS my investments. That's the reason for needing more than 250k like most people do now


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## Shoeman

sureshot006 said:


> People retiring today seem to mostly have traditional pensions, and if course social security. I dont assume I will have SS and I definitely dont have a traditional pension. So, my retirement money IS my investments. That's the reason for needing more than 250k like most people do now


250k? That won’t even get you into a senior long-term facility! You’ll burn that up in a year or 2! X 2 if needed..

My folks have a pretty decent pension income. My dad being a wounded Vet at 100% plus his pension. Seen his quality of life decline after an early retirement just gives another perspective. Finally told him to sell his boat since him and his cronies were gonna die out there.

Now he’s reduced to watching TV. Yup, they saved, built a few homes in Brighton and again down in Florida. They’re worth a nice penny, but the quality of life has deminished!

See, we only have so many “good years” left! My bike? At some point I will have to give to it up(or add a third wheel), boats? Might be that! 

Live life while you can enjoy! Old age will come, even to the best of us! 

To deprive yourselves in order to better those little ungrateful pricks you raised is another story!

We? No kids! We spoil our nieces/nephews... oh boy, my rich aunt is coming to visit. Who cares? Spread the wealth! 

Probably spent well over 200k in the Keys over the years. Well spent!


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## Luv2hunteup

Shoeman said:


> 250k? That won’t even get you into a senior long-term facility! You’ll burn that up in a year or 2! X 2 if needed..
> 
> My folks have a pretty decent pension income. My dad being a wounded Vet at 100% plus his pension. Seen his quality of life decline after an early retirement just gives another perspective. Finally told him to sell his boat since him and his cronies were gonna die out there.
> 
> Now he’s reduced to watching TV. Yup, they saved, built a few homes in Brighton and again down in Florida. They’re worth a nice penny, but the quality of life has deminished!
> 
> See, we only have so many “good years” left! My bike? At some point I will have to give to it up(or add a third wheel), boats? Might be that!
> 
> Live life while you can enjoy! Old age will come, even to the best of us!
> 
> To deprive yourselves in order to better those little ungrateful pricks you raised is another story!
> 
> We? No kids! We spoil our nieces/nephews... oh boy, my rich aunt is coming to visit. Who cares? Spread the wealth!
> 
> Probably spent well over 200k in the Keys over the years. Well spent!


I’ve always wondered if you get to take cuts in line at the Pearly Gates if you are wealthiest person in the cemetery.


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## sureshot006

Shoeman said:


> 250k? That won’t even get you into a senior long-term facility! You’ll burn that up in a year or 2! X 2 if needed..
> 
> My folks have a pretty decent pension income. My dad being a wounded Vet at 100% plus his pension. Seen his quality of life decline after an early retirement just gives another perspective. Finally told him to sell his boat since him and his cronies were gonna die out there.
> 
> Now he’s reduced to watching TV. Yup, they saved, built a few homes in Brighton and again down in Florida. They’re worth a nice penny, but the quality of life has deminished!
> 
> See, we only have so many “good years” left! My bike? At some point I will have to give to it up(or add a third wheel), boats? Might be that!
> 
> Live life while you can enjoy! Old age will come, even to the best of us!
> 
> To deprive yourselves in order to better those little ungrateful pricks you raised is another story!
> 
> We? No kids! We spoil our nieces/nephews... oh boy, my rich aunt is coming to visit. Who cares? Spread the wealth!
> 
> Probably spent well over 200k in the Keys over the years. Well spent!


Look up the avg retirement balance. Its sad... 

I dont need to die with my last 10k to be spent on a burial. And I figure living below my means now will rub off in my son so even if he does get a million or two he will put it to good use instead of blowing it on BS.

I also dont need to spend an additional 50k per year on stuff or trips. Remember, there are studies showing happiness and money go hand in hand up to a point of much diminished returns...


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## sureshot006

People should handle their money as they see fit, but usually ends up with government reliance. Especially when considering the care facilities.


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## Gamekeeper

Luv2hunteup said:


> I’ve always wondered if you get to take cuts in line at the Pearly Gates if you are wealthiest person in the cemetery.


They don't put pockets in a casket.

You come into this world with empty pockets and that's how you leave.


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## Shoeman

sureshot006 said:


> Look up the avg retirement balance. Its sad...
> 
> I dont need to die with my last 10k to be spent on a burial. And I figure living below my means now will rub off in my son so even if he does get a million or two he will put it to good use instead of blowing it on BS.
> 
> I also dont need to spend an additional 50k per year on stuff or trips. Remember, there are studies showing happiness and money go hand in hand up to a point of much diminished returns...


You are either obsessed with investments, or too young to see the downside. Good for you!

We live for our trips! Kinda like a carrot on a stick! Work hard and could care less about spending an entire Winter here! Enjoyed snow machines, always had a boat (or 3) a house in Oscoda.

Your son might blow through that windfall in a year or 2.

Take a look at Art Van as of late....


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## sureshot006

Shoeman said:


> You are either obsessed with investments, or too young to see the downside. Good for you!
> 
> We live for our trips! Kinda like a carrot on a stick! Work hard and could care less about spending an entire Winter here! Enjoyed snow machines, always had a boat (or 3) a house in Oscoda.
> 
> Your son might blow through that windfall in a year or 2.
> 
> Take a look at Art Van as of late....


You act like I dont do anything... I take all my vacation time and it's more than most get. Some of it I hunt, some I fish, the rest is trips. I dont take it to sit at home and count money.

When I want something, I buy it and never have to worry about next months payments.

You shouldnt care what my son gets any more than how much I care that someone else is eating cat food in exchange for whatever else at an earlier age.

It is possible to have a few million in retirement AND take your trips to the keys. They are not mutually exclusive.

I do not have a pension, so my 401k NEEDS to be larger than people your age. Its just the way it is. That 3000/mo pension check has to come from somewhere. In this case its out of my own pocket (401k) and not a pension fund.


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## Luv2hunteup

Single digits and sunshine made me want to wash my interior windows today. It also gave me time to think during this mindless task. RMDs have been on the horizon for me, they recently got pushed back but are still on my mind. Here’s my situation, I took a mortgage out after retirement as a bridge loan of sorts for my dream home. It was partially funded by the new mortgage and selling securities. My taxes were enormous that year even with a maxed out mortgage. 

My intentions were to pay off the mortgage the following year when I sold my homestead. It would easily pay off the new note with plenty of room to spare. The market was doing well so it did not make financial sense to pay it off and still doesn’t. It hit me while doing the window washing of what to do when I have to receive RMD that I have no present need for. I think I’ll take a portion or all of it to pay off my mortgage. I’ll run it by my financial advisor to see what he has to say about it. Thoughts?


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## Shoeman

sureshot006 said:


> You act like I dont do anything... I take all my vacation time and it's more than most get. Some of it I hunt, some I fish, the rest is trips. I dont take it to sit at home and count money.
> 
> When I want something, I buy it and never have to worry about next months payments.
> 
> You shouldnt care what my son gets any more than how much I care that someone else is eating cat food in exchange for whatever else at an earlier age.
> 
> It is possible to have a few million in retirement AND take your trips to the keys. They are not mutually exclusive.


Touché!

But preaching investing to some of old folks that may have lost millions during the bad years might be reminder of things to come? 

Yes, investing is a beautiful thing, yet some are obsessed with it and loose their shirt. Timing! 

Eating cat food really is no different of what we did during the Carter administration, but that might be before your time.

I just hate someone preaching on this last market trend! Just shows a neglect of previous ones!


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## sureshot006

Shoeman said:


> Touché!
> 
> But preaching investing to some of old folks that may have lost millions during the bad years might be reminder of things to come?
> 
> Yes, investing is a beautiful thing, yet some are obsessed with it and loose their shirt. Timing!
> 
> Eating cat food really is no different of what we did during the Carter administration, but that might be before your time.
> 
> I just hate someone preaching on this last market trend! Just shows a neglect of previous ones!


Previous were prime times for investments. That's why mine has grown so well. I pumped it up while it was down.

You're right, timing is important. If I were near retirement I would be skewed heavily toward less risk and therefore not lose my shirt. I'm being very aggressive now so I don't have to catch up so much later.

As for my son maybe he will blow it in 2 years. If he does, I hope it's on a property or a pair of ranger boats. I'd be happy for that and money well saved. Right now he's afraid of the motor noise lol


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## FREEPOP

Shoeman said:


> Touché!
> 
> But preaching investing to some of old folks that may have lost millions during the bad years might be reminder of things to come?
> 
> Yes, investing is a beautiful thing, yet some are obsessed with it and loose their shirt. Timing!
> 
> Eating cat food really is no different of what we did during the Carter administration, but that might be before your time.
> 
> I just hate someone preaching on this last market trend! Just shows a neglect of previous ones!


I ended up picking apples at an orchard. Much better than cat food cause we could make pies outa them too.


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## Waif

Personal debt vs personal equity.
Risk vs assets.


If forced to take RMD's and not needing them , they could get tossed into municipal bonds.
Or no load muni -funds.
That's where your adviser comes in.

Mortgages are not known for being callable. Life can seem to make them so on rare occasion.
I prefer to be able to cover debt. So how much to carry varies.
Still debating about ending the mortgage...
Having had the ball fumbled during a mortgage company selling one I had before and the escrow evaporating mysteriously , and the parcel being sold for delinquent taxes ;and the hassle that followed where I seemed to be the only one concerned about it....It's not like carrying the debt when not needed is reassuring all is well when a note is sold out from under you and you suddenly don't legally own the portion of an investment you thought you did.


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## FREEPOP

Waif said:


> Personal debt vs personal equity.
> Risk vs assets.
> 
> 
> If forced to take RMD's and not needing them ,


Don't think I've ever heard of an optional RMD :lol:


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## Waif

FREEPOP said:


> Don't think I've ever heard of an optional RMD :lol:


You don't have to take it.
Just pay half the payment in penalty.
You know , kinda like a mortgage.


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## FREEPOP

Waif said:


> You don't have to take it.
> Just pay half the payment in penalty.
> You know , kinda like a mortgage.


Throw that money this way instead of just throwing it away.


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## Shoeman

Hope you know when to pull the plug! Most didn’t last time around


FREEPOP said:


> I ended up picking apples at an orchard. Much better than cat food cause we could make pies outa them too.


Cause we had to! 

Much different than some guy coming in paying off your mortgage is stupid 

Arrogant without any prior to 08 investments, or needing them...


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## Waif

FREEPOP said:


> Throw that money this way instead of just throwing it away.


Nope. It's all going into the coinstar machine .
Amazon gift receipt , for the Christmas Ramen feast..
(Ve Wong Kung Fu brand. No , I don't own any shares. Only some product.)


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## FREEPOP

Shoeman said:


> Hope you know when to pull the plug! Most didn’t last time around
> 
> 
> Cause we had to!
> 
> Much different than some guy coming in paying off your mortgage is stupid
> 
> Arrogant without any prior to 08 investments, or needing them...


Should've went to Mexico and got free education, healthcare, etc.


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## FREEPOP

Waif said:


> Nope. It's all going into the coinstar machine .
> Amazon gift receipt , for the Christmas Ramen feast..
> (Ve Wong Kung Fu brand. No , I don't own any shares. Only some product.)


Translated does that mean "soilent green"?


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## Gamekeeper

Let’s say you needed a couple hundred thousand dollars. It is a pain in the ass to go through a fresh appraisal, secure a home equity line of credit, or an additional mortgage, and then maybe 5-6 weeks later, actually have cash in hand.
Whereas, you could’ve kept your 3% mortgage in place, and just stuck the additional money in a mutual fund, and had all kinds of money sitting there ready to go when you needed it.

Like buying a lakefront retirement home, when the deal presented itself, rather than having to tell somebody, “well, you’ll just have to wait a couple of months before I can do anything”, because of some bank.

You have to strike when the iron is hot.


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## sureshot006

junkman said:


> No burn marks here.If you read my other post I am able to save even more now.


Yes, you are able to save the amount that would have gone to interest, minus the opportunity cost elsewhere. If your mortgage was $800/mo you are not all of a sudden ahead when your mortgage ends. Your savings is way behind and the additional amount you are now able to save on a monthly basis is just catch up to what it otherwise would have been. Rate of change in net worth isnt impacted much at all.

Most people dont like to look at it that way but it is what it is.


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## sureshot006

FREEPOP said:


> I completely understand being out from under the debt but if you've been paying a lot extra to pay off a 4-5% loan, when the market is giving 10%, you weren't utilizing your money to it's fullest.


Exactly.


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## sureshot006

Gamekeeper said:


> Let’s say you needed a couple hundred thousand dollars. It is a pain in the ass to go through a fresh appraisal, secure a home equity line of credit, or an additional mortgage, and then maybe 5-6 weeks later, actually have cash in hand.
> Whereas, you could’ve kept your 3% mortgage in place, and just stuck the additional money in a mutual fund, and had all kinds of money sitting there ready to go when you needed it.
> 
> Like buying a lakefront retirement home, when the deal presented itself, rather than having to tell somebody, “well, you’ll just have to wait a couple of months before I can do anything”, because of some bank.
> 
> You have to strike when the iron is hot.


I have a good friend that bought a new home. He was planning for it. He decided it best to try to pay off his current home prior to purchasing a new one. I couldnt understand why...Well, funds from the sale of the first were not available in time for closing of the 2nd. Ended up not being able to put 20% down on the new mortgage and was left with the higher payment schedule.


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## sureshot006

Waif said:


> "I don't wanna" is as good a reason as any.


Right. I dont want to save 1% when I can make 10%. 1% is super cheap money. People pay more than that to keep it in their safe instead of an online banking account.


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## Lund Explorer

Gamekeeper said:


> Let’s say you needed a couple hundred thousand dollars. It is a pain in the ass to go through a fresh appraisal, secure a home equity line of credit, or an additional mortgage, and then maybe 5-6 weeks later, actually have cash in hand.
> Whereas, you could’ve kept your 3% mortgage in place, and just stuck the additional money in a mutual fund, and had all kinds of money sitting there ready to go when you needed it.
> 
> Like buying a lakefront retirement home, when the deal presented itself, rather than having to tell somebody, “well, you’ll just have to wait a couple of months before I can do anything”, because of some bank.
> 
> You have to strike when the iron is hot.


So let's say that perfect lakefront home comes up for sale. Just how many hours does it take to close on that $200k deal? Are there a lot of these deals that don't take 30 days to close "after" an offer is accepted and an earnest money deposit has been made? 

A wise investor needs some amount of time to do those little things to protect their investment, like a property/building inspection, a survey, and title insurance. Of course us poor folks like me think of spending $200k a little more intense than buying a loaf of bread.


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## Gamekeeper

Lund Explorer said:


> So let's say that perfect lakefront home comes up for sale. Just how many hours does it take to close on that $200k deal? Are there a lot of these deals that don't take 30 days to close "after" an offer is accepted and an earnest money deposit has been made?
> 
> A wise investor needs some amount of time to do those little things to protect their investment, like a property/building inspection, a survey, and title insurance. Of course us poor folks like me think of spending $200k a little more intense than buying a loaf of bread.


title insurance protects the lender.
If you are paying cash for a building there is no lender
A couple hours end to end if the title is clear to start.
If you want to pull your cash back out, well, then you have to go through the standard formal process which usually takes 4 to 6 weeks.


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## Lund Explorer

Gamekeeper said:


> title insurance protects the lender.
> If you are paying cash for a building there is no lender
> A couple hours end to end if the title is clear to start.


Title Insurance protects both. That's why most policies are written for the entire purchase price and not just the mortgage amount. If you are paying cash, you'd be foolish to not require the seller to provide you with that security.

Of course, because I've seen what can happen in a property sale, I refuse to treat them like a ho-hum transaction. The fastest I've ever closed was around three weeks, and the longest was over two months when the seller had some issues that needed to be cleared up. The only way to find those issues is what I described before.


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## Far Beyond Driven

How much value can you put on house shaped cookies? Getting the icing to match the color of the house was a trick.


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## Gamekeeper

Lund Explorer said:


> Title Insurance protects both. That's why most policies are written for the entire purchase price and not just the mortgage amount. If you are paying cash, you'd be foolish to not require the seller to provide you with that security.
> 
> Of course, because I've seen what can happen in a property sale, I refuse to treat them like a ho-hum transaction. The fastest I've ever closed was around three weeks, and the longest was over two months when the seller had some issues that needed to be cleared up. The only way to find those issues is what I described before.


I don't want to overstate this, because a residence is the biggest transaction most people will ever make in their lives, but lots of property is bought and sold in transactions that are purposely streamlined for pace.

I always find it funny when the attorney says they have to "cure" something involving a title.


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## Lund Explorer

Gamekeeper said:


> I don't want to overstate this, because a residence is the biggest transaction most people will ever make in their lives, but lots of property is bought and sold in transactions that are purposely streamlined for pace.
> 
> I always find it funny when the attorney says they have to "cure" something involving a title.


It's not just the title. I had a banker tell me that he could quickly get me into this repo they had.... No problems. Then I looked into it a little bit. Half the pole barn I was going to buy was on the neighbors land. The septic system was reworked and consisted of several plastic barrels buried in the ground. I didn't walk away from that place, I ran like hell.


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## Fishndude

For real estate purchase transactions involving finance, there are typically 2 - title insurance policies. A Lender's policy, and an OTP - Owner's Title Policy. For people who purchase without using financing, there should be 1 title insurance policy - OTP. Anyone who buys real estate without an OTP is taking major risks. In many States, the OTP cost is the responsibility of the Seller(s).


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## Sharkey

This is a great topic and the answer is not the same for everyone. This is how I explain it to people that are torn between investing for retirement and paying off low interest debt. 

You can walk into a bank when you retire with a big fat IRA and get a loan for just about anything you need or desire, but walk into that same bank with no debt and ask for a retirement loan and what do you expect the answer will be?

Pay yourself first.


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## kroppe

Regarding savings, the consumer is doing better in that department than in the past 30 years, and the trend is favorable.


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## sureshot006

kroppe said:


> Regarding savings, the consumer is doing better in that department than in the past 30 years. And the trend is on a favorable swing.


It better be! No more "guaranteed" pensions.


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## 22 Chuck

Too bad interest is taxpayer subsidized.

The other question is--can you afford to throw away several hundred dollars every month--I dont even know what interest amounts to per month. Maybe some will clue us in, here??


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## Gamekeeper

I


CL-Lewiston said:


> Too bad interest is taxpayer subsidized.
> 
> The other question is--can you afford to throw away several hundred dollars every month--I dont even know what interest amounts to per month. Maybe some will clue us in, here??


Figure it out
4% on 100,000 is 4000 or 333.33/mos for the first mos, declining from there.
If your tax rate is 15%, and you earn 100k, you'd get about 600 of it back on your taxes. So, net 3400 or 283.33/mos actual cost the 1st month, declining from there.

Most wives can evaporate $283.00 before you can type it.

Whereas, it's much harder to get at if it's in a tax deferred account.


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## Lund Explorer

Sharkey said:


> This is a great topic and the answer is not the same for everyone. This is how I explain it to people that are torn between investing for retirement and paying off low interest debt.
> 
> You can walk into a bank when you retire with a big fat IRA and get a loan for just about anything you need or desire, but walk into that same bank with no debt and ask for a retirement loan and what do you expect the answer will be?
> 
> Pay yourself first.


The answer isn't the same for a number of reasons. For some of us, we can remember when there was no such thing as a low interest loan. Our first home came with a 16% mortgage interest rate. The 1980's was a very painful time to have debt, and some of us learned that it paid a different kind of dividend to pay down loans as quickly as we could. The habit stuck. 

It doesn't mean that we're all sitting in a paid for home with no retirement set aside. It just means that we know we'll never be placed back under the thumb of a mortgage company ever again. Once we paid off those loans, we started socking money away for those golden years. The balance might not be a high as some, but then our monthly bills are much lower without all that retirement debt.


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## Fishndude

Sharkey said:


> You can walk into a bank when you retire with a big fat IRA and get a loan for just about anything you need or desire, but walk into that same bank with no debt and ask for a retirement loan and what do you expect the answer will be?
> 
> Pay yourself first.


What is a "retirement loan?" I've never heard of that, and I've worked in consumer finance for 25+ years. Auto loans use a vehicle as collateral. Home loans use a residential property as collateral. Consumer loans have no collateral. There is revolving, and closed-end/installment debt.


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## sureshot006

Gamekeeper said:


> I
> 
> Figure it out
> 4% on 100,000 is 4000 or 333.33/mos for the first mos, declining from there.
> If your tax rate is 15%, and you earn 100k, you'd get about 600 of it back on your taxes. So, net 3400 or 283.33/mos actual cost the 1st month, declining from there.
> 
> Most wives can evaporate $283.00 before you can type it.
> 
> Whereas, it's much harder to get at if it's in a tax deferred account.


Eh.... many folks cant itemize


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