no loan without 20% down

[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?

[kewp]

I’ll agree about the wisdom of having cash on hand (or, at least, in highly liquid investments).

I was never much of a debtor or saver in my twenties. I tended to live exactly within my means.

When I got wiped out during the dotcom crash in 2001 I ended up about 20k in debt via credit cards while recovering over the next few years. I’m still paying it off :(.

The point is something will always come up and its cheaper to pay for it in cash vs. financing it. Btw, I have a feeling many of the families buried in debt in the country are exactly in my situation, not tooling around in Hummers and wearing a Rolex.

[kewp]

I’ll agree about the wisdom of having cash on hand (or, at least, in highly liquid investments).

I was never much of a debtor or saver in my twenties. I tended to live exactly within my means.

When I got wiped out during the dotcom crash in 2001 I ended up about 20k in debt via credit cards while recovering over the next few years. I’m still paying it off :(.

The point is something will always come up and its cheaper to pay for it in cash vs. financing it. Btw, I have a feeling many of the families buried in debt in the country are exactly in my situation, not tooling around in Hummers and wearing a Rolex.

[kewp]

I’ll agree about the wisdom of having cash on hand (or, at least, in highly liquid investments).

I was never much of a debtor or saver in my twenties. I tended to live exactly within my means.

When I got wiped out during the dotcom crash in 2001 I ended up about 20k in debt via credit cards while recovering over the next few years. I’m still paying it off :(.

The point is something will always come up and its cheaper to pay for it in cash vs. financing it. Btw, I have a feeling many of the families buried in debt in the country are exactly in my situation, not tooling around in Hummers and wearing a Rolex.

[kewp]

I’ll agree about the wisdom of having cash on hand (or, at least, in highly liquid investments).

I was never much of a debtor or saver in my twenties. I tended to live exactly within my means.

When I got wiped out during the dotcom crash in 2001 I ended up about 20k in debt via credit cards while recovering over the next few years. I’m still paying it off :(.

The point is something will always come up and its cheaper to pay for it in cash vs. financing it. Btw, I have a feeling many of the families buried in debt in the country are exactly in my situation, not tooling around in Hummers and wearing a Rolex.

[kewp]

I’ll agree about the wisdom of having cash on hand (or, at least, in highly liquid investments).

I was never much of a debtor or saver in my twenties. I tended to live exactly within my means.

When I got wiped out during the dotcom crash in 2001 I ended up about 20k in debt via credit cards while recovering over the next few years. I’m still paying it off :(.

The point is something will always come up and its cheaper to pay for it in cash vs. financing it. Btw, I have a feeling many of the families buried in debt in the country are exactly in my situation, not tooling around in Hummers and wearing a Rolex.

[SD Realtor]

Pretty much everyone I know who has money, in fact has used leverage in one form or another to get there. The other method beyond leverage has been to get other investors. Mind you, this is not I have a million dollar home and work as an engineer money. This is more like, I don’t really need to work anymore sort of money. I would not argue your facts in a minute Ray because they make perfect sense.

Alternately I am kind of a shmuck… I make good money but work a 9 to 5 job and have a brokerage AND my wife works her business as well. Any person of wealth looks at me and laughs because to work that hard is pretty stupid considering what I make. At the end of the day when I do buy my home, every grain of financial sense would say not to use the pile of coin I have saved up for that. It would make much more sense to use maybe half of it and then use the rest for other investments etc… Yet I am a and will always be one of those types who just sleeps better at night with as little leverage as possible. I think it is buried within our personalities.

Those who are willing to take more risk will always always always be more successful then those of us who are not. In all paths of life. Yet that comet of risky people also has a tail of flotsam of those that didn’t make it. Still, deep down I do agree with your premise.

I will say that with that risky behavior and chutzpah, intelligence is needed. Therein lies the problem. By far, by very very far, that intelligence just is not present in the vast majority of the population. Basically they are idiots and leverage to the hilt simply to spend more, not to make more.

SD Realtor

[SD Realtor]

Pretty much everyone I know who has money, in fact has used leverage in one form or another to get there. The other method beyond leverage has been to get other investors. Mind you, this is not I have a million dollar home and work as an engineer money. This is more like, I don’t really need to work anymore sort of money. I would not argue your facts in a minute Ray because they make perfect sense.

Alternately I am kind of a shmuck… I make good money but work a 9 to 5 job and have a brokerage AND my wife works her business as well. Any person of wealth looks at me and laughs because to work that hard is pretty stupid considering what I make. At the end of the day when I do buy my home, every grain of financial sense would say not to use the pile of coin I have saved up for that. It would make much more sense to use maybe half of it and then use the rest for other investments etc… Yet I am a and will always be one of those types who just sleeps better at night with as little leverage as possible. I think it is buried within our personalities.

Those who are willing to take more risk will always always always be more successful then those of us who are not. In all paths of life. Yet that comet of risky people also has a tail of flotsam of those that didn’t make it. Still, deep down I do agree with your premise.

I will say that with that risky behavior and chutzpah, intelligence is needed. Therein lies the problem. By far, by very very far, that intelligence just is not present in the vast majority of the population. Basically they are idiots and leverage to the hilt simply to spend more, not to make more.

SD Realtor

[SD Realtor]

Pretty much everyone I know who has money, in fact has used leverage in one form or another to get there. The other method beyond leverage has been to get other investors. Mind you, this is not I have a million dollar home and work as an engineer money. This is more like, I don’t really need to work anymore sort of money. I would not argue your facts in a minute Ray because they make perfect sense.

Alternately I am kind of a shmuck… I make good money but work a 9 to 5 job and have a brokerage AND my wife works her business as well. Any person of wealth looks at me and laughs because to work that hard is pretty stupid considering what I make. At the end of the day when I do buy my home, every grain of financial sense would say not to use the pile of coin I have saved up for that. It would make much more sense to use maybe half of it and then use the rest for other investments etc… Yet I am a and will always be one of those types who just sleeps better at night with as little leverage as possible. I think it is buried within our personalities.

Those who are willing to take more risk will always always always be more successful then those of us who are not. In all paths of life. Yet that comet of risky people also has a tail of flotsam of those that didn’t make it. Still, deep down I do agree with your premise.

I will say that with that risky behavior and chutzpah, intelligence is needed. Therein lies the problem. By far, by very very far, that intelligence just is not present in the vast majority of the population. Basically they are idiots and leverage to the hilt simply to spend more, not to make more.

SD Realtor

[SD Realtor]

Pretty much everyone I know who has money, in fact has used leverage in one form or another to get there. The other method beyond leverage has been to get other investors. Mind you, this is not I have a million dollar home and work as an engineer money. This is more like, I don’t really need to work anymore sort of money. I would not argue your facts in a minute Ray because they make perfect sense.

Alternately I am kind of a shmuck… I make good money but work a 9 to 5 job and have a brokerage AND my wife works her business as well. Any person of wealth looks at me and laughs because to work that hard is pretty stupid considering what I make. At the end of the day when I do buy my home, every grain of financial sense would say not to use the pile of coin I have saved up for that. It would make much more sense to use maybe half of it and then use the rest for other investments etc… Yet I am a and will always be one of those types who just sleeps better at night with as little leverage as possible. I think it is buried within our personalities.

Those who are willing to take more risk will always always always be more successful then those of us who are not. In all paths of life. Yet that comet of risky people also has a tail of flotsam of those that didn’t make it. Still, deep down I do agree with your premise.

I will say that with that risky behavior and chutzpah, intelligence is needed. Therein lies the problem. By far, by very very far, that intelligence just is not present in the vast majority of the population. Basically they are idiots and leverage to the hilt simply to spend more, not to make more.

SD Realtor

[SD Realtor]

Pretty much everyone I know who has money, in fact has used leverage in one form or another to get there. The other method beyond leverage has been to get other investors. Mind you, this is not I have a million dollar home and work as an engineer money. This is more like, I don’t really need to work anymore sort of money. I would not argue your facts in a minute Ray because they make perfect sense.

Alternately I am kind of a shmuck… I make good money but work a 9 to 5 job and have a brokerage AND my wife works her business as well. Any person of wealth looks at me and laughs because to work that hard is pretty stupid considering what I make. At the end of the day when I do buy my home, every grain of financial sense would say not to use the pile of coin I have saved up for that. It would make much more sense to use maybe half of it and then use the rest for other investments etc… Yet I am a and will always be one of those types who just sleeps better at night with as little leverage as possible. I think it is buried within our personalities.

Those who are willing to take more risk will always always always be more successful then those of us who are not. In all paths of life. Yet that comet of risky people also has a tail of flotsam of those that didn’t make it. Still, deep down I do agree with your premise.

I will say that with that risky behavior and chutzpah, intelligence is needed. Therein lies the problem. By far, by very very far, that intelligence just is not present in the vast majority of the population. Basically they are idiots and leverage to the hilt simply to spend more, not to make more.

SD Realtor

[Raybyrnes]

SD Realtor

I am still trying to figure out why one tries to say there is less risk in your method as opposed to mine. I am actually arguing to reduce risk.

For instance if I were to take your sitauation, I would say that if you wnated to take on less risk use the mimimum amount of money for a down payment so that you have a maximum amount of cash available .

Then if you want to reduce the amount of debt that you have take the difference between what you would have put down and the minimum required and divde that into additionally voluntary payments that you make over the next 60 months.

Now in the interem of making those 60 months of additonal payment, if something unforeseen comes up you have cash on hand. therefore you are not guessing as to what the potential interest rate environment will be. Seems like I am an advocate of less risk. That doesn’t always mean less debt.

[Raybyrnes]

SD Realtor

I am still trying to figure out why one tries to say there is less risk in your method as opposed to mine. I am actually arguing to reduce risk.

For instance if I were to take your sitauation, I would say that if you wnated to take on less risk use the mimimum amount of money for a down payment so that you have a maximum amount of cash available .

Then if you want to reduce the amount of debt that you have take the difference between what you would have put down and the minimum required and divde that into additionally voluntary payments that you make over the next 60 months.

Now in the interem of making those 60 months of additonal payment, if something unforeseen comes up you have cash on hand. therefore you are not guessing as to what the potential interest rate environment will be. Seems like I am an advocate of less risk. That doesn’t always mean less debt.

[Raybyrnes]

SD Realtor

I am still trying to figure out why one tries to say there is less risk in your method as opposed to mine. I am actually arguing to reduce risk.

For instance if I were to take your sitauation, I would say that if you wnated to take on less risk use the mimimum amount of money for a down payment so that you have a maximum amount of cash available .

Then if you want to reduce the amount of debt that you have take the difference between what you would have put down and the minimum required and divde that into additionally voluntary payments that you make over the next 60 months.

Now in the interem of making those 60 months of additonal payment, if something unforeseen comes up you have cash on hand. therefore you are not guessing as to what the potential interest rate environment will be. Seems like I am an advocate of less risk. That doesn’t always mean less debt.

[Raybyrnes]

SD Realtor

I am still trying to figure out why one tries to say there is less risk in your method as opposed to mine. I am actually arguing to reduce risk.

For instance if I were to take your sitauation, I would say that if you wnated to take on less risk use the mimimum amount of money for a down payment so that you have a maximum amount of cash available .

Then if you want to reduce the amount of debt that you have take the difference between what you would have put down and the minimum required and divde that into additionally voluntary payments that you make over the next 60 months.

Now in the interem of making those 60 months of additonal payment, if something unforeseen comes up you have cash on hand. therefore you are not guessing as to what the potential interest rate environment will be. Seems like I am an advocate of less risk. That doesn’t always mean less debt.

[Author]

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