I would think most rich people have a mortgage because we like free money.
Just paid off the house...
- Thread starter unIowa
- Start date
I would think most rich people have a mortgage because we like free money.
However, anything that pays more than you mortgage interest has risk. Since I'm sure a person of your wealth has a large portfolio, I can't see how you would not find it reasonable to have a portion that earns a guaranteed 3.75%.
Plus, the lack of mortgage provides cash flow which is helpful if you ever have unforeseen expenses or interruption in income.
There's nothing wrong with paying off a mortgage.
WELL DONE!!!!!! CONGRATS!!!!!!In just under 7 years and under the age of 40...feels good fellas, feels good.
3.375%. My money market is paying 90bps of which i still have ample reserves in (truthfully i had too much cash...i love liquidity), i don't want to touch the bond market (only way to go is down unless you get lucky and interest rates stay flat), i ain't going long on certificates to buy rate, and i have plenty of equities so i figured if i am going to add more outside of my retirement vehicles it might as well be at a 15% discount.
Exactly.
OP I have a 15 year mortgage at 3.25. I have no intention of paying it off early. Nor would I if it was 4%.
Yes, LOL to me even though you could have put that mortgage money to better use.
dgordo-take it from here.
Lol! Actually this is my case; we always upgrade to a house that we can't possibly payoff until we retire. I applaud people with the discipline to stay in a home that's well beneath what they could afford.
It's silly to claim that no portion of your investments should be in something that guarantees you over a 3% return.
We have staved off the temptation. So far. Bought a decent house 11 years ago that was a stretch for us at the time but now we could swing a house that costs two or three times as much. Every now and then a house comes up on Zillow that sure is tempting, but there is something to be said for being 1/3 of the way through (we refinanced) a modest 15-year mortgage.
By doing things the way I have I am getting an automatic 15% return. Steve where are you getting an immediate and guaranteed 15% return?
It is tempting and a few years back we were seriously considering a home just over $500k in rural W Iowa but better judgement quickly came back to us as we knew we were only a few years from being able to just pay ours off, and we have a pretty nice house now in an area that is just perfect for our family (3 acres just outside of CB/Omaha...couldn't stand living in areas where houses are stacked up on each other, just seems gross to me to be packed that close together plus me and the boy don't have to go anywhere else to get in some BP and long toss).
Amen
Plus the whole freedom part of it, being in debt is almost like being enslaved to me. Steve and Dave might be ok walking away from their obligations when the going gets tough but if I make a promise/commitment to something I am going to honor it regardless of what my contractual rights are. Some might call that silly but I don't, too much old American values instilled in me I guess.
unIowa, that is a totally unfair assessment of me. I live in Las Vegas and purchased my home in January 2006 (i.e., the apex of the Vegas real estate boom). Even with putting 10% down, I had equity in the home for approximately two months. The market crashed and crashed hard. At the nadir, our home lost approximately 60% of its value. I could have very easily walked away from the home and/or short sold it, and could have purchased another home within 2 years, but I didn't. I have made every payment and have never asked the bank to "cut me a deal."
You may disagree with my financial strategy, and that's fine. But please don't ever question my character.
You may disagree with my financial strategy, and that's fine. But please don't ever question my character.
I am glad you stuck with it Dave, it seemed iffy for awhile based on what you were posting. I retract what I stated earlier...you are a man of your word.
Now you might want to sell before Lake Mead goes dry and Vegas becomes a ghost town.
You didn't need to tell us how well off you are, we all assumed it since you post in HROT. We all have so much damn money we don't know what to do with it.
Not true. There are 2 honest people that post here and are admitted poors.
Let me say this one time, very clearly:
Remove the Zillow app from your device! It causes uncontrollable temptation!
Okay, you lost me on that one. We love living with neighbors to whom we can chat with when we go out and get the mail. When our kids were little there was a path worn in the grass (and through the flower beds!) between our house and the neighbors, as the kids went back and forth all summer, every weekend, and most afternoons after school. They also walked to school from K through HS. I love being surrounded by people and being able to walk to most things I need.
I don't mind people as we live in a small rural community of 12 homes but each lot is 3 acres minimum...i just don't want to be stacked on top of each other. I couldn't go back to living in the burbs.
Me too, with today's mortgage interest rates, paying off the house early rarely makes sense financially. Peace of mind sure is attractive though, and that has value too. To each his own.
So you admit that you get a 15% return through your work, yet you put all your money toward paying off your low interest mortgage instead of putting your money in that? How do you not see where you went wrong here? It's not often that someone on here brags about their stupidity.
