[quote=ltsdd][quote=ocrenter][quote=ltsdd][quote=earlyretirement]
…most people VASTLY over estimate their investment abilities. Most people I know think they are stock gurus and in an upmarket like now they think they are Warren Buffett Jr.! (A few years ago….um not so much).
[/quote]
ER,
Most people on this board should be savvy enough to be able to get a return of 3% annually on their investments, no?[/quote]
Where are you getting the 3%? Yes, if the MR is at 3% i would not prepay. If I’m not subject to AMT yearly I would likely not repay.
Neither is the reality. Thus the prepayment.[/quote]
Using your example. A return of 3%/year (or there about) should double your pay-off amount in the 22-year period that you mentioned.[/quote]
The doubling would still be subject to 40% taxation. So I’m still looking at $80k vs $150k.
The money saved by prepayment is not subject to the 40% tax rate.
Prepayment still wins.
Trust me, deciding to prepay was major decision, all potential scenarios were evaluated.
