Not over the last 10 years...
Notice that 10 does not equal 30. And if I must point out i've averaged 12% annually over the last decade.
Not over the last 10 years...
Notice that 10 does not equal 30. And if I must point out i've averaged 12% annually over the last decade.
Oh, and add in the power of compounding over the last decade and I'm WAY AHEAD of where I'd be if i put all that money towards paying down my mortgage.
Oh, and add in the power of compounding over the last decade and I'm WAY AHEAD of where I'd be if i put all that money towards paying down my mortgage.
Season football tickets plus donation?
New clothes?
Eating out for dinner?
New TV?
Cable?
Gambling?
Vacation?
High speed internet?
New PC?
And what if you don't put all of that money towards the mortgage? Isn't there a balance or do you believe all should go towards investments?
yes, buying a new vehicle does not make financial sense.
But, if you have enough money to buy one as well as no debt and saving plenty of money for retirement does that make you stupid for doing so? It may, I'm not sure.
HA! If you need a psychological element to manage your finances than you have more issues that Dave Ramsey can solve.
I disagree. Most decisions in life have a psychological element involved. Doesn't mean a person has issues.
My brother(who probably makes six digits as a engineer) ...
You are right. Sometimes being a geek has its benefits.
You are right. Sometimes being a geek has its benefits.
He's bench pressed almost 400 pounds. Far, far from being a geek....
No, it doesn't make you stupid. If you can afford to spend money on something it isn't stupid. Most people spend more than they can afford on more than just cars. A new car would just be high on the list of stupid purchases if you aren't well off.
For me, I totally agree. The analogy earlier in this thread about a noose around my neck is how I feel. Having no debt removes that feeling Not there yet so the noose is still there).
As well, paying on that debt and reducing it has had a pretty good psychological impact on how comfortable we feel in the current financial crunch the Nation is in. With less debt and more cash flow (Debt snowball) I feel really comfortable.:yes: I'm not sure everyone can say that.
He's bench pressed almost 400 pounds. Far, far from being a geek....
Correlation?
The value of compounding is not the same when you are paying down debt versus investing.
There is risk in everything we do from walking down the street to driving to work to swimming. So, lets discuss some of those risks. What if you pay down your debt aggressively and save/invest nothing, then you lose your job and have no income, no savings, no liquidity. How do you measure that risk? In both your examples and my example risk cannot be accurately measured. It is purely up to the individual to assess what level of risk they are willing to take on.
After the tax benefit i am paying 4% on my mortgage. It will be easy to make much more than 4% on average annually after taxes by investing in a mix of stocks/bonds/real estate over the next 30 years. Add in the power of compounding and it's a no-brainer.
Obviously there is more than one way for one to manage their finances. To each their own I guess..........
"I am not advocating saving nothing, but that aside, the above example of losing your job works both ways. If you lose your job and are carrying a longer term mortgage, you will have a more highly leveraged home and the tax advantage of your higher interest payments will be mitigated as your income is reduced. If you had taken a shorter term note, you will have a asset that can be leveraged for cash and be in a more desirable position to renegotiate to protect the asset."
I want to know your banker because the unemployed people I know are obviously getting a raw deal from their banker. Bankers don't loan against your asset (house), they loan against your income. How do you propose a person with no job and no income, get a home equity loan even if their house is 100% paid off?
I think we agree here more than we disagree.
Think about what you're saying. The loan is based on Home Equity, not income. How do you think Senior Citizens get these loans? They don't work.