Paying off mortgage

Discussion in 'Economics' started by stevegee58, Feb 6, 2017.

  1. algofy

    algofy

    Risk adjusted I'd much rather have my house paid for.
     
    #51     Feb 7, 2017
    murray t turtle and Clubber Lang like this.
  2. luisHK

    luisHK

    Good luck growing your wealth, and business if u ever set one up, without taking on debt, be it from banks, suppliers or brokers.
    Even Apple sells bonds... u probably have a thing or 2 to learn still.
    BTW i don t need (or have the courage/energy/ideas) anymore to take on debt, apart from occasional leverage in a speculative brokerage account, but it means my net worth is moving up at a much slower pace than it used to. And yes it also means less stress.
     
    #52     Feb 7, 2017
  3. ironchef

    ironchef

    It is not difficult to work this out yourself. If you can afford to pay off your mortgage, you can look at this by simply work some numbers:

    Even today a 15 year mortgage is around 3.2% giving you an effective borrowing cost of ~2.5% if your marginal tax rate is 20%. If your marginal tax rate is 39% your effective borrowing cost is ~1.9%. You can invest in "dogs of the DOW" ETF getting effective dividends of ~ 3.5%.....
     
    #53     Feb 7, 2017
  4. Overnight

    Overnight

    Why? If debt is such a great thing, why do you not need anymore of it, or have the courage to take more of it upon your shoulders?

    Why not just stay in debt in perpetuity, if you can make money with it? Hmm?
     
    #54     Feb 7, 2017
  5. ironchef

    ironchef

    No offense, if you are so risk averse why are you a trader?

    Peace.
     
    #55     Feb 7, 2017
  6. algofy

    algofy

    I'm not going to put my family home in jeopardy for some investment. It may not make mathematical sense but risk adjusted its a better play IMO.
     
    #56     Feb 7, 2017
    murray t turtle, Ryan81 and ironchef like this.
  7. luisHK

    luisHK

    u missed the part about lacking.energy and ideas,( to create sufficient extra wealth from that debt) Besides beeing now wealthy enough to live very comfortably non leveraged.
    And yes, big profitable companies issues debt in perpetuity. or until they cease to exist.
    if u don t understand the advantages of debt, your knowledge of wealth creation is very limited
     
    #57     Feb 7, 2017
  8. ironchef

    ironchef

    You should ask our President Trump on this.
     
    #58     Feb 7, 2017
    Ryan81 likes this.
  9. jj90

    jj90

    You assume one has to pay the debt back. A very simplistic worldview.
     
    #59     Feb 7, 2017
    luisHK likes this.
  10. Overnight

    Overnight

    #60     Feb 7, 2017