- This topic has 86 replies, 13 voices, and was last updated 16 years, 6 months ago by
Raybyrnes.
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October 12, 2007 at 4:00 PM #88566October 12, 2007 at 4:04 PM #88562
Raybyrnes
ParticipantCBad
You can pay off the mortgage. The bottom line is that it costs you a lot more money in opportunity costs to pay it off as oppsed to conservatively investing it over the long hall. Addionally it is riskier to have money tied up in a home than having a large diversified portfolio of investments. Transfer the risk to the bank and if you are smart you will never worry about the marshall coming because you ahve assets to make 30 years woth of mortgage payments
October 12, 2007 at 4:04 PM #88567ParticipantCBad
You can pay off the mortgage. The bottom line is that it costs you a lot more money in opportunity costs to pay it off as oppsed to conservatively investing it over the long hall. Addionally it is riskier to have money tied up in a home than having a large diversified portfolio of investments. Transfer the risk to the bank and if you are smart you will never worry about the marshall coming because you ahve assets to make 30 years woth of mortgage payments
October 12, 2007 at 4:18 PM #88570seattle-relo
ParticipantPertinazzio – I come from a family with a long history with the belief that one must own a home. The belief that renting is wasting money and for “deadbeats”. But 6 years ago when my in-laws decided to leave Chicago and move to North Carolina for better weather, they chose not to buy, but to rent. My FIL said that was one of the best things he had ever done. He really, really enjoyed being a tenant after years of owning and maintaining a home. His stress level was so much lower than before and he wasn’t spending time/money maintaining the home. I think for the first time in years my in-laws had fun with eachother and just enjoyed their freedom and the adventures of a new city. Enjoy renting, and your new adventures in San Diego this Spring with your wife. There’s no need to tie yourself down with a mortgage. 🙂
October 12, 2007 at 4:18 PM #88576ParticipantPertinazzio – I come from a family with a long history with the belief that one must own a home. The belief that renting is wasting money and for “deadbeats”. But 6 years ago when my in-laws decided to leave Chicago and move to North Carolina for better weather, they chose not to buy, but to rent. My FIL said that was one of the best things he had ever done. He really, really enjoyed being a tenant after years of owning and maintaining a home. His stress level was so much lower than before and he wasn’t spending time/money maintaining the home. I think for the first time in years my in-laws had fun with eachother and just enjoyed their freedom and the adventures of a new city. Enjoy renting, and your new adventures in San Diego this Spring with your wife. There’s no need to tie yourself down with a mortgage. 🙂
October 12, 2007 at 4:25 PM #88577patientlywaiting
ParticipantIn Florida, there is value in paying off a house since the house is sheltered from creditors. If you fall on hard times or get sued, your creditors cannot take you house. Liquid cash can be seized but not the house.
That’s why Wall Street executives(and OJ Simpson) all have houses in Florida paid in cash.
Who knows? You might run over a mother and child tomorrow. Or your son might go on a rampage using your gun (see related thread). In that case, you’ll most likely be sued for every penny you have.
October 12, 2007 at 4:25 PM #88583ParticipantIn Florida, there is value in paying off a house since the house is sheltered from creditors. If you fall on hard times or get sued, your creditors cannot take you house. Liquid cash can be seized but not the house.
That’s why Wall Street executives(and OJ Simpson) all have houses in Florida paid in cash.
Who knows? You might run over a mother and child tomorrow. Or your son might go on a rampage using your gun (see related thread). In that case, you’ll most likely be sued for every penny you have.
October 12, 2007 at 4:51 PM #88582HLS
ParticipantPatient, I still disagree.
Even in Florida I wouldn’t want a home paid off. Whether they can take it or not.
You can protect assets with LLC’s and other ways.If you had $500K in cash 5 years ago, which would have put you in a better position ? …
Buying ONE $500K home for cash, or buying (4) $500K homes with $125K down on each, assuming that they cash flowed break even ??
You would have either ended up with $1 million or $4 million today with the same original investment.
Of course there is a time and place, but I’m sure anybody can understand the point.
Leverage can magnify losses as well as gains, but all markets aren’t as frothy as SD was, and investing is still a risk, but the depreciation write off on 3 rentals is an added benefit against paying income taxes.October 12, 2007 at 4:51 PM #88587ParticipantPatient, I still disagree.
Even in Florida I wouldn’t want a home paid off. Whether they can take it or not.
You can protect assets with LLC’s and other ways.If you had $500K in cash 5 years ago, which would have put you in a better position ? …
Buying ONE $500K home for cash, or buying (4) $500K homes with $125K down on each, assuming that they cash flowed break even ??
You would have either ended up with $1 million or $4 million today with the same original investment.
Of course there is a time and place, but I’m sure anybody can understand the point.
Leverage can magnify losses as well as gains, but all markets aren’t as frothy as SD was, and investing is still a risk, but the depreciation write off on 3 rentals is an added benefit against paying income taxes.October 12, 2007 at 8:04 PM #88617sdrealtor
ParticipantFWIW,
I think you are shooting way to low on the income side. I own a couple side businesses one of which is in SD. Our receptionist/office manager makes about 30K with full health benefits, 2 weeks vacation, 3 personal days, 6 paid holidays and a gym membership. If you can walk, chew gum, operate a computer and actually show up for work everyday you should have no problem making 30K a year each out here.October 12, 2007 at 8:04 PM #88624ParticipantFWIW,
I think you are shooting way to low on the income side. I own a couple side businesses one of which is in SD. Our receptionist/office manager makes about 30K with full health benefits, 2 weeks vacation, 3 personal days, 6 paid holidays and a gym membership. If you can walk, chew gum, operate a computer and actually show up for work everyday you should have no problem making 30K a year each out here.October 12, 2007 at 8:34 PM #88621Ricechex
ParticipantHLS—where do you find these 2% deals? A year ago, I got a CC that would donate to ASPCA if I made a purchase on this card. So, I got the card, and made a purchase. A couple of months afterwards, I got some checks from the CC, no transaction fee, no APR, until Jan 08. I cashed the check, put it in ING to earn 4.9%, make the monthly payments, and will pay off in Jan. However, I can never find any other deals!
I already have a National City CC, which earns cash rebates, so I use the CC for everything. (Except Water and SDGE–they don’t take CC payments) I pay in full every month, so the way I see it, I am making money, though small amounts.
Where do you find these other deals? I have been looking for other offers, but I can’t find any.
October 12, 2007 at 8:34 PM #88627ParticipantHLS—where do you find these 2% deals? A year ago, I got a CC that would donate to ASPCA if I made a purchase on this card. So, I got the card, and made a purchase. A couple of months afterwards, I got some checks from the CC, no transaction fee, no APR, until Jan 08. I cashed the check, put it in ING to earn 4.9%, make the monthly payments, and will pay off in Jan. However, I can never find any other deals!
I already have a National City CC, which earns cash rebates, so I use the CC for everything. (Except Water and SDGE–they don’t take CC payments) I pay in full every month, so the way I see it, I am making money, though small amounts.
Where do you find these other deals? I have been looking for other offers, but I can’t find any.
October 12, 2007 at 9:07 PM #88626ParticipantI have found that the best offers go to people who they don’t think will use them. Your credit is checked before the offers are sent out.
If you have been late with payments or close to being maxed out, you rarely get 0% BT offers.The offers came to me. I didn’t seek them out. I have great credit and high limits on cards that I rarely use.
I pay in full every month, just to get the benefits.The 2% Citibank offer was too good to turn down. It was a large amount, and I’ve already had it for about 3 years.
It’s probably going to be 5 more years until it’s paid off, fixed at 2%.As you probably know, with these offers, you should not use the card for ANYTHING else other than the cash advance or balance transfer. They are also hoping that you will be late with a payment, so they can jack the rate up to 30%. I am sure that happens to many people. I just have them auto debit the payment so it’s their fault if it’s late, not mine.
My newest favorite card is a NCL Cruise Line MC.
Roughly $17,000 spent gets a $500 credit towards any cruise. They allow $1000 credit a year (About 3% benefit)Next favorite is Southwest Airlines Visa Card good for free flights.
Have to be able to fly to Florida free for the free NCL Caribbean cruise~ The flights are also transferable.ANYBODY can do this. It’s no secret.
Many of my clients that get 0% transfer offers say that they throw them away. I tell them to start looking at them. Some are tricky and require several purchases which screws up the rates, but it solves a small problem for some people.
People who are using debit cards are passing up free flights,cruises or other benefits.
Keep an eye on http://www.creditcard.com for different offers.
For people that do carry a credit card balance, DISCOVER has a special offer right now which is a fixed rate of 3.9% on balance transfers for 4 years until November 2011.
Not everyone will qualify.As far as liquid money, Countrywide Bank is still paying 5.50% on accounts with $10,000 and up, FDIC insured.
October 12, 2007 at 9:07 PM #88632ParticipantI have found that the best offers go to people who they don’t think will use them. Your credit is checked before the offers are sent out.
If you have been late with payments or close to being maxed out, you rarely get 0% BT offers.The offers came to me. I didn’t seek them out. I have great credit and high limits on cards that I rarely use.
I pay in full every month, just to get the benefits.The 2% Citibank offer was too good to turn down. It was a large amount, and I’ve already had it for about 3 years.
It’s probably going to be 5 more years until it’s paid off, fixed at 2%.As you probably know, with these offers, you should not use the card for ANYTHING else other than the cash advance or balance transfer. They are also hoping that you will be late with a payment, so they can jack the rate up to 30%. I am sure that happens to many people. I just have them auto debit the payment so it’s their fault if it’s late, not mine.
My newest favorite card is a NCL Cruise Line MC.
Roughly $17,000 spent gets a $500 credit towards any cruise. They allow $1000 credit a year (About 3% benefit)Next favorite is Southwest Airlines Visa Card good for free flights.
Have to be able to fly to Florida free for the free NCL Caribbean cruise~ The flights are also transferable.ANYBODY can do this. It’s no secret.
Many of my clients that get 0% transfer offers say that they throw them away. I tell them to start looking at them. Some are tricky and require several purchases which screws up the rates, but it solves a small problem for some people.
People who are using debit cards are passing up free flights,cruises or other benefits.
Keep an eye on http://www.creditcard.com for different offers.
For people that do carry a credit card balance, DISCOVER has a special offer right now which is a fixed rate of 3.9% on balance transfers for 4 years until November 2011.
Not everyone will qualify.As far as liquid money, Countrywide Bank is still paying 5.50% on accounts with $10,000 and up, FDIC insured.
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