[quote=CA renter][quote=flu][quote=scaredyclassic]i guess what im thinking is, at 20 years remaining, at 4 percent, it’s basically like a cheap mortgage, without the tax deduction. Even over the last 10 years since sshe started th eloan, 300.00 means a lot less to us ina month than it did a decade ago. i’d be pretty surprised if the trend didn’t continue. an extra 300 a month isnt really going to give a lot more flexibility overall…[/quote]
ding ding ding….[/quote]
It depends. For many people, that $300 is more today than it was a decade ago. It really depends on your current, and future, job/income prospects.[/quote]
This is also a good point, the $300 you pay off now can purchase so many goods. In 20 years, that same $300 is worth of a lot less in goods purchased so sorta why similar with Lotto winnings, you take a big hit to get all your money in today’s dollars. If you pay it off, you’re not valuing the cost of the money now vs much later.
Like a mortgage I guess…
This debate can be endless and I “get” why some people don’t want to have any debt, and I am not saying there is a right or wrong answer, but for me, if I don’t take the deduction, I will have to pay that deduction in income taxes so unless you can completely eliminate all your taxes, you’ll have to pay it some way or the other…Maybe you can move all your IRA to roth before then and that’s smart and something I plan to do too, but that’s a ways off for me.
Also, a lot of this has to do with personal experiences and circumstances…
We’re self employed, capital and cash flow is king and using it to close out a debt that is easily manageable is unwise for probably a lot of small businesses who are constantly starved for capital (like we are).
What if you or your wife suddenly decides to quit their job or you piss off a partner and get fired?
What if you wanted to start a business? Starting/running a business can be extremely expensive so having that cash on hand is a great asset. Also, if you loss your job, good luck trying to tap any loans/capital easily at such low rates.
Remember, Elon Musk practically had to file bankruptcy to keep Tesla and Solar City alive even though he was wealthy already with selling Paypal.
Again, I’m sure everyone is doing what’s best for them, but most financial advisers say unless you are extremely wealthy, certain debt isn’t the worst thing in the world.
Also, if you retire, maybe you could start writing off your loan interest as well (we still write off my wife’s loans).
