no loan without 20% down

[raptorduck]

Raybyrnes. I have great financial advisors, but at the end of the day I take advice from me. Frankly, now that I am where I am, I am much more conservative. I don’t need to leverage my money/income. I am almost a cash n carry kind of guy now. I carry absolutely no debt other than a mortgage. I pay cash for cars, vacations, furniture, electronics, everything. And, eventually, I intend to carry no more than the maximum mortgage I can get a tax benifit from ($1M).

It is just how I like to live. Without worriying about paying a debt and having enough $$ in the bank to pay off all debt, and have enough left over to be jobless if I needed to be and still maintain my lifestyle. There are so many wealthy people in the world, but only a minority of them are finacially independent. I still consider myself a slave to my job, but I am getting there. I could “look” richer I suppose, but I would be less financially independent to get there. That is not where I want to go.

I am not rich, but rich enough for my taste. My wealth is growing despite my contrarian non-leveraged stance. That is good enough for me.

If I find an arbitrage opportunity, I do take it, but I don’t look for one.

I am the kind of guy who has always strived to be the dumbest person in the room, the poorest in the neighborhood, and the lowest paid in my job. As you get smarter, more successful and richer, you have to try harder to surround yourself with people smarter, more successful, and richer than you.

Before long, you have become quite successful at being a poor ignoramus.

[WaitingToExhale]

I am almost a cash n carry kind of guy now. I carry absolutely no debt other than a mortgage. I pay cash for cars, vacations, furniture, electronics, everything….

….Without worriying about paying a debt and having enough $$ in the bank to pay off all debt, and have enough left over to be jobless if I needed to be and still maintain my lifestyle. …

…I am the kind of guy who has always strived to be the dumbest person in the room, the poorest in the neighborhood, and the lowest paid in my job. As you get smarter, more successful and richer, you have to try harder to surround yourself with people smarter, more successful, and richer than you.

I find the comments in your last paragraph interesting. I agree with most of your philosophy whole-heartedly, and certainly hope someday to be in a position similar to the one you have created for yourself, but I disagree on surrounding oneself with richer folks and being the poorest person in the neighborhood. Work-wise, I agree to a large extent, but it seems to me (and some recent studies seem to bear this out) that people determine their “success” based on their environment (neighbors). I want a decent, safe hard-working type neighborhood where most folks don’t drive hummers or bmw’s and spend 100K renovating their backyard, since the extra expense is a luxury. And humans have a way or setting a baseline to what they see around them.

[WaitingToExhale]

I am almost a cash n carry kind of guy now. I carry absolutely no debt other than a mortgage. I pay cash for cars, vacations, furniture, electronics, everything….

….Without worriying about paying a debt and having enough $$ in the bank to pay off all debt, and have enough left over to be jobless if I needed to be and still maintain my lifestyle. …

…I am the kind of guy who has always strived to be the dumbest person in the room, the poorest in the neighborhood, and the lowest paid in my job. As you get smarter, more successful and richer, you have to try harder to surround yourself with people smarter, more successful, and richer than you.

I find the comments in your last paragraph interesting. I agree with most of your philosophy whole-heartedly, and certainly hope someday to be in a position similar to the one you have created for yourself, but I disagree on surrounding oneself with richer folks and being the poorest person in the neighborhood. Work-wise, I agree to a large extent, but it seems to me (and some recent studies seem to bear this out) that people determine their “success” based on their environment (neighbors). I want a decent, safe hard-working type neighborhood where most folks don’t drive hummers or bmw’s and spend 100K renovating their backyard, since the extra expense is a luxury. And humans have a way or setting a baseline to what they see around them.

[WaitingToExhale]

I am almost a cash n carry kind of guy now. I carry absolutely no debt other than a mortgage. I pay cash for cars, vacations, furniture, electronics, everything….

….Without worriying about paying a debt and having enough $$ in the bank to pay off all debt, and have enough left over to be jobless if I needed to be and still maintain my lifestyle. …

…I am the kind of guy who has always strived to be the dumbest person in the room, the poorest in the neighborhood, and the lowest paid in my job. As you get smarter, more successful and richer, you have to try harder to surround yourself with people smarter, more successful, and richer than you.

I find the comments in your last paragraph interesting. I agree with most of your philosophy whole-heartedly, and certainly hope someday to be in a position similar to the one you have created for yourself, but I disagree on surrounding oneself with richer folks and being the poorest person in the neighborhood. Work-wise, I agree to a large extent, but it seems to me (and some recent studies seem to bear this out) that people determine their “success” based on their environment (neighbors). I want a decent, safe hard-working type neighborhood where most folks don’t drive hummers or bmw’s and spend 100K renovating their backyard, since the extra expense is a luxury. And humans have a way or setting a baseline to what they see around them.

[WaitingToExhale]

I am almost a cash n carry kind of guy now. I carry absolutely no debt other than a mortgage. I pay cash for cars, vacations, furniture, electronics, everything….

….Without worriying about paying a debt and having enough $$ in the bank to pay off all debt, and have enough left over to be jobless if I needed to be and still maintain my lifestyle. …

…I am the kind of guy who has always strived to be the dumbest person in the room, the poorest in the neighborhood, and the lowest paid in my job. As you get smarter, more successful and richer, you have to try harder to surround yourself with people smarter, more successful, and richer than you.

I find the comments in your last paragraph interesting. I agree with most of your philosophy whole-heartedly, and certainly hope someday to be in a position similar to the one you have created for yourself, but I disagree on surrounding oneself with richer folks and being the poorest person in the neighborhood. Work-wise, I agree to a large extent, but it seems to me (and some recent studies seem to bear this out) that people determine their “success” based on their environment (neighbors). I want a decent, safe hard-working type neighborhood where most folks don’t drive hummers or bmw’s and spend 100K renovating their backyard, since the extra expense is a luxury. And humans have a way or setting a baseline to what they see around them.

[WaitingToExhale]

I am almost a cash n carry kind of guy now. I carry absolutely no debt other than a mortgage. I pay cash for cars, vacations, furniture, electronics, everything….

….Without worriying about paying a debt and having enough $$ in the bank to pay off all debt, and have enough left over to be jobless if I needed to be and still maintain my lifestyle. …

…I am the kind of guy who has always strived to be the dumbest person in the room, the poorest in the neighborhood, and the lowest paid in my job. As you get smarter, more successful and richer, you have to try harder to surround yourself with people smarter, more successful, and richer than you.

I find the comments in your last paragraph interesting. I agree with most of your philosophy whole-heartedly, and certainly hope someday to be in a position similar to the one you have created for yourself, but I disagree on surrounding oneself with richer folks and being the poorest person in the neighborhood. Work-wise, I agree to a large extent, but it seems to me (and some recent studies seem to bear this out) that people determine their “success” based on their environment (neighbors). I want a decent, safe hard-working type neighborhood where most folks don’t drive hummers or bmw’s and spend 100K renovating their backyard, since the extra expense is a luxury. And humans have a way or setting a baseline to what they see around them.

[Raybyrnes]

JustLurking

“The finance books all agree that you should finance as much as possible, if the rates are reasonable”

There are 2 different points here and I want to be clear where I stand. I am not suggesting somone increase the amount of home they can buy by seeking to take on a larger amount of leverage. What I am suggesting is that if I can afford 1 Million in property rather than putting 350K as a down payment I am only going to put the 200K down.

Why? While I might have a slighly higher payment I have a substantially higher amount of cash. This cash provides far more safety in an unforseen circumstance that my slightly higher payment.

Therefore I would argue that your perception of having less risk with the lower payment is an incorrect assesment.

The reality is that all people have reoccurring expenses. this comes in the form of utilities, food, taxes etc. Cash on hand allows me to make these payments in a worst case scenario while at the saem time providing me with liquidity in the event that the deal of the century presents itself.

I will once again go back to my Katrina example. Who was better off after their homes had been destroyed. The guy with the lower payment and no home and little cash or the guy with the 150K because he elected to put the 20% down instead of the 35%. Seems to me that the guy who put 35% might have thought he was taking less risk when in fact he was taking on more risk. Your thoughts

[Raybyrnes]

JustLurking

“The finance books all agree that you should finance as much as possible, if the rates are reasonable”

There are 2 different points here and I want to be clear where I stand. I am not suggesting somone increase the amount of home they can buy by seeking to take on a larger amount of leverage. What I am suggesting is that if I can afford 1 Million in property rather than putting 350K as a down payment I am only going to put the 200K down.

Why? While I might have a slighly higher payment I have a substantially higher amount of cash. This cash provides far more safety in an unforseen circumstance that my slightly higher payment.

Therefore I would argue that your perception of having less risk with the lower payment is an incorrect assesment.

The reality is that all people have reoccurring expenses. this comes in the form of utilities, food, taxes etc. Cash on hand allows me to make these payments in a worst case scenario while at the saem time providing me with liquidity in the event that the deal of the century presents itself.

I will once again go back to my Katrina example. Who was better off after their homes had been destroyed. The guy with the lower payment and no home and little cash or the guy with the 150K because he elected to put the 20% down instead of the 35%. Seems to me that the guy who put 35% might have thought he was taking less risk when in fact he was taking on more risk. Your thoughts

[Raybyrnes]

JustLurking

“The finance books all agree that you should finance as much as possible, if the rates are reasonable”

There are 2 different points here and I want to be clear where I stand. I am not suggesting somone increase the amount of home they can buy by seeking to take on a larger amount of leverage. What I am suggesting is that if I can afford 1 Million in property rather than putting 350K as a down payment I am only going to put the 200K down.

Why? While I might have a slighly higher payment I have a substantially higher amount of cash. This cash provides far more safety in an unforseen circumstance that my slightly higher payment.

Therefore I would argue that your perception of having less risk with the lower payment is an incorrect assesment.

The reality is that all people have reoccurring expenses. this comes in the form of utilities, food, taxes etc. Cash on hand allows me to make these payments in a worst case scenario while at the saem time providing me with liquidity in the event that the deal of the century presents itself.

I will once again go back to my Katrina example. Who was better off after their homes had been destroyed. The guy with the lower payment and no home and little cash or the guy with the 150K because he elected to put the 20% down instead of the 35%. Seems to me that the guy who put 35% might have thought he was taking less risk when in fact he was taking on more risk. Your thoughts

[Raybyrnes]

JustLurking

“The finance books all agree that you should finance as much as possible, if the rates are reasonable”

There are 2 different points here and I want to be clear where I stand. I am not suggesting somone increase the amount of home they can buy by seeking to take on a larger amount of leverage. What I am suggesting is that if I can afford 1 Million in property rather than putting 350K as a down payment I am only going to put the 200K down.

Why? While I might have a slighly higher payment I have a substantially higher amount of cash. This cash provides far more safety in an unforseen circumstance that my slightly higher payment.

Therefore I would argue that your perception of having less risk with the lower payment is an incorrect assesment.

The reality is that all people have reoccurring expenses. this comes in the form of utilities, food, taxes etc. Cash on hand allows me to make these payments in a worst case scenario while at the saem time providing me with liquidity in the event that the deal of the century presents itself.

I will once again go back to my Katrina example. Who was better off after their homes had been destroyed. The guy with the lower payment and no home and little cash or the guy with the 150K because he elected to put the 20% down instead of the 35%. Seems to me that the guy who put 35% might have thought he was taking less risk when in fact he was taking on more risk. Your thoughts

[Raybyrnes]

JustLurking

“The finance books all agree that you should finance as much as possible, if the rates are reasonable”

There are 2 different points here and I want to be clear where I stand. I am not suggesting somone increase the amount of home they can buy by seeking to take on a larger amount of leverage. What I am suggesting is that if I can afford 1 Million in property rather than putting 350K as a down payment I am only going to put the 200K down.

Why? While I might have a slighly higher payment I have a substantially higher amount of cash. This cash provides far more safety in an unforseen circumstance that my slightly higher payment.

Therefore I would argue that your perception of having less risk with the lower payment is an incorrect assesment.

The reality is that all people have reoccurring expenses. this comes in the form of utilities, food, taxes etc. Cash on hand allows me to make these payments in a worst case scenario while at the saem time providing me with liquidity in the event that the deal of the century presents itself.

I will once again go back to my Katrina example. Who was better off after their homes had been destroyed. The guy with the lower payment and no home and little cash or the guy with the 150K because he elected to put the 20% down instead of the 35%. Seems to me that the guy who put 35% might have thought he was taking less risk when in fact he was taking on more risk. Your thoughts

[Raybyrnes]

raptorduck

Hopefully you did not take my psot to poke fun at your strategy but by all accoutns i would think most financial advisors would suggest it to be somewhat of a inopportunistic way of investing your capital.

I say this because while some may look at the interest rate adn deduction with respect to a loan I look at this relative to the loads on Great Mutual fund families. I will use the exmple of The American Funds. Most of their funds carry a front end load of 5.75%. But as you use your Rights of Accumulation (Breakpoint for dollar amounts invested) thes costs go down dramatically.

So when i look at a million dollar purchase (or more in your instance) and consider the difference between putting 20% down vs 35% that difference could be substantial with respect to potential break points that could be earned with a minimal amount of money management.

My question for you is whether or not you advisors are sort of in the same camp as me with respect to utilizing your cash or are they the ones suggestig to put the money down on the home?

[Raybyrnes]

raptorduck

Hopefully you did not take my psot to poke fun at your strategy but by all accoutns i would think most financial advisors would suggest it to be somewhat of a inopportunistic way of investing your capital.

I say this because while some may look at the interest rate adn deduction with respect to a loan I look at this relative to the loads on Great Mutual fund families. I will use the exmple of The American Funds. Most of their funds carry a front end load of 5.75%. But as you use your Rights of Accumulation (Breakpoint for dollar amounts invested) thes costs go down dramatically.

So when i look at a million dollar purchase (or more in your instance) and consider the difference between putting 20% down vs 35% that difference could be substantial with respect to potential break points that could be earned with a minimal amount of money management.

My question for you is whether or not you advisors are sort of in the same camp as me with respect to utilizing your cash or are they the ones suggestig to put the money down on the home?

[Raybyrnes]

raptorduck

Hopefully you did not take my psot to poke fun at your strategy but by all accoutns i would think most financial advisors would suggest it to be somewhat of a inopportunistic way of investing your capital.

I say this because while some may look at the interest rate adn deduction with respect to a loan I look at this relative to the loads on Great Mutual fund families. I will use the exmple of The American Funds. Most of their funds carry a front end load of 5.75%. But as you use your Rights of Accumulation (Breakpoint for dollar amounts invested) thes costs go down dramatically.

So when i look at a million dollar purchase (or more in your instance) and consider the difference between putting 20% down vs 35% that difference could be substantial with respect to potential break points that could be earned with a minimal amount of money management.

My question for you is whether or not you advisors are sort of in the same camp as me with respect to utilizing your cash or are they the ones suggestig to put the money down on the home?

[Raybyrnes]

raptorduck

Hopefully you did not take my psot to poke fun at your strategy but by all accoutns i would think most financial advisors would suggest it to be somewhat of a inopportunistic way of investing your capital.

I say this because while some may look at the interest rate adn deduction with respect to a loan I look at this relative to the loads on Great Mutual fund families. I will use the exmple of The American Funds. Most of their funds carry a front end load of 5.75%. But as you use your Rights of Accumulation (Breakpoint for dollar amounts invested) thes costs go down dramatically.

So when i look at a million dollar purchase (or more in your instance) and consider the difference between putting 20% down vs 35% that difference could be substantial with respect to potential break points that could be earned with a minimal amount of money management.

My question for you is whether or not you advisors are sort of in the same camp as me with respect to utilizing your cash or are they the ones suggestig to put the money down on the home?

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