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Mortgage/Retirement question

Rabbuk said:
I mean i guess you either believe in the American economy enough to think that we will ride out the storm or else whether you pay off your mortgage or put money into retirement won't matter haha.
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But there is a difference.

If we hit rock bottom…and I mean rock bottom like none of us have experienced in our (or our parent’s) lifetimes, my 401k account is going to be depressing as hell. Full disclosure: I haven't given up on the US economy. I still max out my 401k deferral to the legal limit, I also contribute the additional $6k catchup amount I'm allowed since I’m over age 50.

But…if/when things are bleak and maybe I suddenly can’t retire as soon as I planned or inflation has blown up to unprecedented level or the gov’t has become dysfunctional trying to deal with unprecedented difficulties…..none of those bad circumstances created by no fault of my own can take away 1) the roof over my head that is fully paid for 2) the advantage I will have over everyone else struggling in a broken economy where I don’t have a large mortgage payment obligation every month on property that maybe depreciating.

Bottom-line: you don’t have to buy my doomsday caution, but I think it is only fair to acknowledge the real differences whether or not you personally choose to act on them. There is only one investment I can control. My house. I can mitigate that risk substantially. With the markets, the only thing I can do is employ smart asset allocation strategies and hope for the best
 
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As a Mortgage Lender, that is really cheap money and you wont see rates like that for a long time to come! keep that mortgage where it is and make a a little extra payment to principal if you wish to pay off early.
 
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AgronAlum said:
Neither. Buy a bigger house.

Merica
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We didn't become great by being cautious. Would President Dave Ramsey have borrowed from two different European banks at 6% interest to make the Louisiana Purchase?

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8Uwx.gif
 
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wclarson said:
As a Mortgage Lender, that is really cheap money and you wont see rates like that for a long time to come! keep that mortgage where it is and make a a little extra payment to principal if you wish to pay off early.
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So another individual who's livelihood depends on people having mortgages suggests you don't pay off your mortgage.

shocking!
 
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Doc said:
We didn't become great by being cautious. Would President Dave Ramsey have borrowed from two different European banks at 6% interest to make the Louisiana Purchase?

UHZ2.gif


8Uwx.gif
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Peeshhh. Dave Ramsey. What a *****

Not sure how keeping a mortgage with a rate under 4% and investing $$ in a portfolio that could yield more than 4% is an aggressive play

But maybe my income is related to the financial industry.

I recommend buying scratchers, Marlboro Reds, and Pabst Blue Ribbon if it makes you happy. Not my money. Burn it in the street if you want.
 
KnappShack said:
Peeshhh. Dave Ramsey. What a *****

Not sure how keeping a mortgage with a rate under 4% and investing $$ in a portfolio that could yield more than 4% is an aggressive play

But maybe my income is related to the financial industry.

I recommend buying scratchers, Marlboro Reds, and Pabst Blue Ribbon if it makes you happy. Not my money. Burn it in the street if you want.
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Historically, it is not an "aggressive play". Who is saying it is? (link?) You are creating a straw man there.

I'm suggesting history may not be helpful going forward in addressing the OP's question.

You continue to ignore my point that the financial stability of all levels of gov't are not in a healthy place...and that could negatively affect the markets. I'm not saying you have to agree, but I"m curious as to what gives you so much confidence to rely on the status quo?
 
capitalcityguy said:
..
I find it interesting that people are comfortable enough in our political climate as well as record gov’t deficits to simply rely on “mathematics” to make such a decision. I would suggest you need to look at this much deeper. This isn’t your father’s world (as the old saying goes).

Heck…you could be right and all will go as it has in the past and you’ll be fine. What give you confidence that this will be the case though?

If it doesn’t, not having that large outlay of cash every month will be a big benefit. It seems to me that erring on the side of caution with this decision makes a ton of sense….even if it didn’t for past generations.
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I just look at history and the market eventually recovers every time it gets bad. Could it backfire on me? Sure, but I'd rather take my chances because it's still a good bet in my opinion and the reward is very good if it works out. Nothing wrong with paying off your mortgage early; my preference is just to pay it back slowly while borrowing cheap and putting my money to work in my retirement.
 
KnappShack said:
Peeshhh. Dave Ramsey. What a *****

Not sure how keeping a mortgage with a rate under 4% and investing $$ in a portfolio that could yield more than 4% is an aggressive play

But maybe my income is related to the financial industry.

I recommend buying scratchers, Marlboro Reds, and Pabst Blue Ribbon if it makes you happy. Not my money. Burn it in the street if you want.
Click to expand...

Well for one the value of that house could drop in half.
 
capitalcityguy said:
You continue to ignore my point that the financial stability of all levels of gov't are not in a healthy place...and that could negatively affect the markets. I'm not saying you have to agree, but I"m curious as to what gives you so much confidence to rely on the status quo?
Click to expand...

If we're really going to argue about this, we should probably take it to another thread, but for now...

The markets have withstood a know-nothing president who colluded with and is submissive to a foreign power and who seems intent on damaging the current economic expansion (and indeed already has), and a compliant Congress led by a party that has whined about deficits/debt for decades when they aren't in power only to explode the deficit/debt when they are in power. Those things are happening now, and they are well known, and the market doesn't care.

So given that, what makes you think the market is just going to wake up someday and get wise about financial stability? What tipping point exists that we haven't hit yet and can't see coming?

The market knows we're in debt up to our eyeballs. The market obviously isn't concerned.

(Edit: I'm not at all saying there's no recession coming. That will obviously happen at some point. Just that you seem to think there's some big reckoning coming, far beyond a typical recession, and I think your reasoning is flimsy.)
 
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capitalcityguy said:
Historically, it is not an "aggressive play". Who is saying it is? (link?) You are creating a straw man there.

I'm suggesting history may not be helpful going forward in addressing the OP's question.

You continue to ignore my point that the financial stability of all levels of gov't are not in a healthy place...and that could negatively affect the markets. I'm not saying you have to agree, but I"m curious as to what gives you so much confidence to rely on the status quo?
Click to expand...

The 100 years of historic returns in the market. Those same returns you say we can't count on.

You keep talking about these headwinds. Sure. There are headwinds, but nothing to make me toss out 100 years of investing data.
 
capitalcityguy said:
But there is a difference.

If we hit rock bottom…and I mean rock bottom like none of us have experienced in our (or our parent’s) lifetimes, my 401k account is going to be depressing as hell. Full disclosure: I haven't given up on the US economy. I still max out my 401k deferral to the legal limit, I also contribute the additional $6k catchup amount I'm allowed since I’m over age 50.

But…if/when things are bleak and maybe I suddenly can’t retire as soon as I planned or inflation has blown up to unprecedented level or the gov’t has become dysfunctional trying to deal with unprecedented difficulties…..none of those bad circumstances created by no fault of my own can take away 1) the roof over my head that is fully paid for 2) the advantage I will have over everyone else struggling in a broken economy where I don’t have a large mortgage payment obligation every month on property that maybe depreciating.

Bottom-line: you don’t have to buy my doomsday caution, but I think it is only fair to acknowledge the real differences whether or not you personally choose to act on them. There is only one investment I can control. My house. I can mitigate that risk substantially. With the markets, the only thing I can do is employ smart asset allocation strategies and hope for the best
Click to expand...


If what you are saying happens. Wouldn’t your house become extremely depressed since people would be out of work? So if you have a large loan since you are investing money in a crappy stock market, you would just short sell your house and buy a cheap house later? So it would somewhat cancel each other out.

Not in favor of this idea, but just flipping the tables. Also, what if he lives in a small town that doesn’t do TIF and incentive type stuff?
 
Cyched said:
His followers are going to be in for a rude awakening when retirement hits.

I wouldn't care as much if he hadn't been using it to tell people they can withdraw 8% annually in retirement - that can get problematic quickly.
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He one time had fat fingers when I listened in the tractor. Punched in 23% instead of 13 and had this guy retiring in like 10 years. Came back about half the show later and said it would be like 25.
 
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