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  • June 21, 2011 at 3:41 AM #706345
    Dougie944
    Participant

    We’ve all heard the stories of people that have lost fortunes. I can’t think of any of those that I have read where the person had a paid off house. Not saying it couldn’t happen, but…..

    The best question on this thread right now asked Matt what he would do with the 500k if he didn’t pay off the house. Not an easy answer for me.

    June 21, 2011 at 4:02 AM #705143
    carlsbadworker
    Participant

    I agree with scaredy on this. I think it is an asset allocation issue. You want to treat mortgage repayment as part of your bond portfolio and have the right asset mixes in your overall plan. Even if you think the stock market is over-valued at this point (which I think it is), you should take part of your money and ear-mark it as equity-fund rather than paying off the house with it. The stock market will return back to fair value once in a while and increasingly likely to do so in the next few years. You don’t want to tie all your cashes into the house.

    June 21, 2011 at 4:02 AM #705239
    carlsbadworker
    Participant

    I agree with scaredy on this. I think it is an asset allocation issue. You want to treat mortgage repayment as part of your bond portfolio and have the right asset mixes in your overall plan. Even if you think the stock market is over-valued at this point (which I think it is), you should take part of your money and ear-mark it as equity-fund rather than paying off the house with it. The stock market will return back to fair value once in a while and increasingly likely to do so in the next few years. You don’t want to tie all your cashes into the house.

    June 21, 2011 at 4:02 AM #705835
    carlsbadworker
    Participant

    I agree with scaredy on this. I think it is an asset allocation issue. You want to treat mortgage repayment as part of your bond portfolio and have the right asset mixes in your overall plan. Even if you think the stock market is over-valued at this point (which I think it is), you should take part of your money and ear-mark it as equity-fund rather than paying off the house with it. The stock market will return back to fair value once in a while and increasingly likely to do so in the next few years. You don’t want to tie all your cashes into the house.

    June 21, 2011 at 4:02 AM #705986
    carlsbadworker
    Participant

    I agree with scaredy on this. I think it is an asset allocation issue. You want to treat mortgage repayment as part of your bond portfolio and have the right asset mixes in your overall plan. Even if you think the stock market is over-valued at this point (which I think it is), you should take part of your money and ear-mark it as equity-fund rather than paying off the house with it. The stock market will return back to fair value once in a while and increasingly likely to do so in the next few years. You don’t want to tie all your cashes into the house.

    June 21, 2011 at 4:02 AM #706350
    carlsbadworker
    Participant

    I agree with scaredy on this. I think it is an asset allocation issue. You want to treat mortgage repayment as part of your bond portfolio and have the right asset mixes in your overall plan. Even if you think the stock market is over-valued at this point (which I think it is), you should take part of your money and ear-mark it as equity-fund rather than paying off the house with it. The stock market will return back to fair value once in a while and increasingly likely to do so in the next few years. You don’t want to tie all your cashes into the house.

    June 21, 2011 at 6:21 AM #705148
    scaredyclassic
    Participant

    actually now i think it’s dumb to pay off the house.

    it’s not “secure”

    earthquake destroys house. you have nothing.

    lose job, can’t pay increased property taxes. screwed.

    would you buy a 30 year CD at 4.75% with a big withdrawal penalty with all your money? Why not?

    does it seem as appealing to put half the money in the house? it doesn’t, psychologically. sounds dumb, right. but tat’s an indication that it’s a foolish asset allocation.

    dont put all your eggs in one basket, and don’t spend your last dime buying “security” by paying off a house.

    that said, of course, as stated above, there are lots dumber things you could do with the half million.

    I cannot tell you what the smarter things to do are.

    and if you cannot think of or do anything smarter with the money, then maybe it’s not so dumb to pay off the house after all…

    June 21, 2011 at 6:21 AM #705244
    scaredyclassic
    Participant

    actually now i think it’s dumb to pay off the house.

    it’s not “secure”

    earthquake destroys house. you have nothing.

    lose job, can’t pay increased property taxes. screwed.

    would you buy a 30 year CD at 4.75% with a big withdrawal penalty with all your money? Why not?

    does it seem as appealing to put half the money in the house? it doesn’t, psychologically. sounds dumb, right. but tat’s an indication that it’s a foolish asset allocation.

    dont put all your eggs in one basket, and don’t spend your last dime buying “security” by paying off a house.

    that said, of course, as stated above, there are lots dumber things you could do with the half million.

    I cannot tell you what the smarter things to do are.

    and if you cannot think of or do anything smarter with the money, then maybe it’s not so dumb to pay off the house after all…

    June 21, 2011 at 6:21 AM #705840
    scaredyclassic
    Participant

    actually now i think it’s dumb to pay off the house.

    it’s not “secure”

    earthquake destroys house. you have nothing.

    lose job, can’t pay increased property taxes. screwed.

    would you buy a 30 year CD at 4.75% with a big withdrawal penalty with all your money? Why not?

    does it seem as appealing to put half the money in the house? it doesn’t, psychologically. sounds dumb, right. but tat’s an indication that it’s a foolish asset allocation.

    dont put all your eggs in one basket, and don’t spend your last dime buying “security” by paying off a house.

    that said, of course, as stated above, there are lots dumber things you could do with the half million.

    I cannot tell you what the smarter things to do are.

    and if you cannot think of or do anything smarter with the money, then maybe it’s not so dumb to pay off the house after all…

    June 21, 2011 at 6:21 AM #705991
    scaredyclassic
    Participant

    actually now i think it’s dumb to pay off the house.

    it’s not “secure”

    earthquake destroys house. you have nothing.

    lose job, can’t pay increased property taxes. screwed.

    would you buy a 30 year CD at 4.75% with a big withdrawal penalty with all your money? Why not?

    does it seem as appealing to put half the money in the house? it doesn’t, psychologically. sounds dumb, right. but tat’s an indication that it’s a foolish asset allocation.

    dont put all your eggs in one basket, and don’t spend your last dime buying “security” by paying off a house.

    that said, of course, as stated above, there are lots dumber things you could do with the half million.

    I cannot tell you what the smarter things to do are.

    and if you cannot think of or do anything smarter with the money, then maybe it’s not so dumb to pay off the house after all…

    June 21, 2011 at 6:21 AM #706355
    scaredyclassic
    Participant

    actually now i think it’s dumb to pay off the house.

    it’s not “secure”

    earthquake destroys house. you have nothing.

    lose job, can’t pay increased property taxes. screwed.

    would you buy a 30 year CD at 4.75% with a big withdrawal penalty with all your money? Why not?

    does it seem as appealing to put half the money in the house? it doesn’t, psychologically. sounds dumb, right. but tat’s an indication that it’s a foolish asset allocation.

    dont put all your eggs in one basket, and don’t spend your last dime buying “security” by paying off a house.

    that said, of course, as stated above, there are lots dumber things you could do with the half million.

    I cannot tell you what the smarter things to do are.

    and if you cannot think of or do anything smarter with the money, then maybe it’s not so dumb to pay off the house after all…

    June 21, 2011 at 6:21 AM #705153
    matt
    Participant

    Thank you all for you thoughts and comments. What would I do with the cash if not pay off the house? I’ve thought about trying to build a small real estate portfolio. I also have 2 young kids that may need help with college one day so i’ve thought about opening 529s, purchasing long term care insurance, or investing in the markets.

    My other assets roll up to about $200k and are sitting in funds in my former 401k as well as former company stock. While i’m clearly very very fortunate to be in this position of accumulating cash, i’ve been parking my current earnings in low interest CDs/savings accounts due to a concern that this assignment may not play out long term… and the fact that I could be back in the US unemployed at a moments notice.

    June 21, 2011 at 6:21 AM #705249
    matt
    Participant

    Thank you all for you thoughts and comments. What would I do with the cash if not pay off the house? I’ve thought about trying to build a small real estate portfolio. I also have 2 young kids that may need help with college one day so i’ve thought about opening 529s, purchasing long term care insurance, or investing in the markets.

    My other assets roll up to about $200k and are sitting in funds in my former 401k as well as former company stock. While i’m clearly very very fortunate to be in this position of accumulating cash, i’ve been parking my current earnings in low interest CDs/savings accounts due to a concern that this assignment may not play out long term… and the fact that I could be back in the US unemployed at a moments notice.

    June 21, 2011 at 6:21 AM #705845
    matt
    Participant

    Thank you all for you thoughts and comments. What would I do with the cash if not pay off the house? I’ve thought about trying to build a small real estate portfolio. I also have 2 young kids that may need help with college one day so i’ve thought about opening 529s, purchasing long term care insurance, or investing in the markets.

    My other assets roll up to about $200k and are sitting in funds in my former 401k as well as former company stock. While i’m clearly very very fortunate to be in this position of accumulating cash, i’ve been parking my current earnings in low interest CDs/savings accounts due to a concern that this assignment may not play out long term… and the fact that I could be back in the US unemployed at a moments notice.

    June 21, 2011 at 6:21 AM #705996
    matt
    Participant

    Thank you all for you thoughts and comments. What would I do with the cash if not pay off the house? I’ve thought about trying to build a small real estate portfolio. I also have 2 young kids that may need help with college one day so i’ve thought about opening 529s, purchasing long term care insurance, or investing in the markets.

    My other assets roll up to about $200k and are sitting in funds in my former 401k as well as former company stock. While i’m clearly very very fortunate to be in this position of accumulating cash, i’ve been parking my current earnings in low interest CDs/savings accounts due to a concern that this assignment may not play out long term… and the fact that I could be back in the US unemployed at a moments notice.

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