Jump to content

Paying off the mortgage


drago

Recommended Posts

A mortgage is the single largest investment anyone will ever make in a lifetime. I dont like debt or oweing for anything. My goal is to pay it off as quickly as possible. Pros or cons it dont matter to me. Debt free is what its all about,especially with todays economy.

Donald Trump isn't debt free. He looks like he is doing alright even with the economic down turn.

Link to comment
Share on other sites

  • Replies 94
  • Created
  • Last Reply

Warren Buffett on "Mortgage Debt as an Investment" (he's against)

http://www.americaneer.com/mcmansions/

Excerpt (feel free to read the article)

"I hear media reports where financial advisors talk about about good debt and bad debt. I think there is NO good financial debt, whether its origin is your local pay check cashing business or a Wall Steet firm. If debt was good, Microsoft Corporation and Cisco Systems would not have billions of dollars of cash on their balance sheet."

I heard Warren say in an interview that it's pretty hard to borrow money at 5% and come out ahead reinvesting it.

Pay off the mortgage! Every Financial guru saying otherwise is just trying to sell books and newsletter subscriptions.

Link to comment
Share on other sites

Donald Trump isn't debt free. He looks like he is doing alright even with the economic down turn.

Id be willing to bet that no one here on JetNation has anywhere near the kind of money Donald Trump has. The common man like myself is better off owning a home free and clear without a mortgage. The younger you do it the better. I could do a million things with $1100 a month im currently paying for a short time more.

Link to comment
Share on other sites

Id be willing to bet that no one here on JetNation has anywhere near the kind of money Donald Trump has. The common man like myself is better off owning a home free and clear without a mortgage. The younger you do it the better. I could do a million things with $1100 a month im currently paying for a short time more.

I am not arguing against not having a mortgage. That would be great, I totally agree.

It just isn't a realistic goal for me with 3 kids, private school etc. I think the Suzie Orman's of the world lay out some great plans. Be debt free. But I don't know how long I will live and try to balance things out with a vacation here and there.

Now someday when I sell JetNation then I will co-author a book with The Donald that outlines how the other half lives. :D

Link to comment
Share on other sites

I am not arguing against not having a mortgage. That would be great, I totally agree.

It just isn't a realistic goal for me with 3 kids, private school etc. I think the Suzie Orman's of the world lay out some great plans. Be debt free. But I don't know how long I will live and try to balance things out with a vacation here and there.

Now someday when I sell JetNation then I will co-author a book with The Donald that outlines how the other half lives. :D

Understood 2 kids 1 in college here. I understand its tough.Been there done that. I just dont like debt. It hangs over you and lingers like the plague. I dont like car payments as well. Problem is many buy things they cant afford and then pay exhuberant amount of interest for material things. My goal is to have my home paid for in less than 5 years.

Link to comment
Share on other sites

I am not arguing against not having a mortgage. That would be great, I totally agree.

It just isn't a realistic goal for me with 3 kids, private school etc. I think the Suzie Orman's of the world lay out some great plans. Be debt free. But I don't know how long I will live and try to balance things out with a vacation here and there.

Now someday when I sell JetNation then I will co-author a book with The Donald that outlines how the other half lives. :D

You should call it In The Closet.

Link to comment
Share on other sites

Understood 2 kids 1 in college here. I understand its tough.Been there done that. I just dont like debt. It hangs over you and lingers like the plague. I dont like car payments as well. Problem is many buy things they cant afford and then pay exhuberant amount of interest for material things. My goal is to have my home paid for in less than 5 years.

That is a great goal and I totally respect that.

Just not an option for us right now, one income because of having young kids yet. I also don't like driving old cars. We don't have a big house and don't live a very fancy life but I like have newer cars. Nothing crazy, right now we have a Jeep Laredo and a Volkswagen. But I get bored with cars and don't mind the payments as much (unfortunately). Plus NJ is such a driving state. 23 miles to work. No stores in my town in walking distance, so it all involves lots of driving.

Link to comment
Share on other sites

That is a great goal and I totally respect that.

Just not an option for us right now, one income because of having young kids yet. I also don't like driving old cars. We don't have a big house and don't live a very fancy life but I like have newer cars. Nothing crazy, right now we have a Jeep Laredo and a Volkswagen. But I get bored with cars and don't mind the payments as much (unfortunately). Plus NJ is such a driving state. 23 miles to work. No stores in my town in walking distance, so it all involves lots of driving.

Im a car whore myself. My vehicles are fairly new 1998,2004,2005 and 2006. All paid for except the 2006 a few more payments. Have you ever looked into leasing its a sure fire way to own a new car every 2 years without worrying about repairs. I do have my eyes on a 2011 GMC pick-up I just dont want the payment book.

Link to comment
Share on other sites

Im a car whore myself. My vehicles are fairly new 1998,2004,2005 and 2006. All paid for except the 2006 a few more payments. Have you ever looked into leasing its a sure fire way to own a new car every 2 years without worrying about repairs. I do have my eyes on a 2011 GMC pick-up I just dont want the payment book.

I have leased a few times. I shatter the mileage each time though. My last car (Chrysler 300) was a lease and I owed $1,500 when I was turning it back in. That usually quenches my leasing thirst for a few years, lol.

But the payment was relatively low on a 39 month lease so it wasn't a terrible deal.

Link to comment
Share on other sites

I have leased a few times. I shatter the mileage each time though. My last car (Chrysler 300) was a lease and I owed $1,500 when I was turning it back in. That usually quenches my leasing thirst for a few years, lol.

But the payment was relatively low on a 39 month lease so it wasn't a terrible deal.

The mileage restrictions do suck on leases. Agreed. If you go over they nail you pretty good. Age is another issue when making debt. Im gonna be 50 in a few years and looking to retire. Im also recovering from a serious injury and that puts alot into perspective. Young people think they will never get old.

Link to comment
Share on other sites

The mileage restrictions do suck on leases. Agreed. If you go over they nail you pretty good. Age is another issue when making debt. Im gonna be 50 in a few years and looking to retire. Im also recovering from a serious injury and that puts alot into perspective. Young people think they will never get old.

Retire? Don't think I will ever get there. I just turned 41, after my refi if I pay the same amount each month I think I am mortgage free at 58. That is 4 new car payments away, haha.

Link to comment
Share on other sites

Retire? Don't think I will ever get there. I just turned 41, after my refi if I pay the same amount each month I think I am mortgage free at 58. That is 4 new car payments away, haha.

Nope not me 50 or 55 was in the plan. I was injured at work and had surgery. I dont know what tommorow brings but ive seen too many friends and relatives work until 65 or 70 and then drop dead shortly thereafter. Im gonna collect on my pension and enjoy life without work or stress.

Link to comment
Share on other sites

Nope not me 50 or 55 was in the plan. I was injured at work and had surgery. I dont know what tommorow brings but ive seen too many friends and relatives work until 65 or 70 and then drop dead shortly thereafter. Im gonna collect on my pension and enjoy life without work or stress.

Dude that is great. Sorry about the injury though.

My chronic porn habit has me in a lot of debt. So I am not afforded with such luxuries.

Link to comment
Share on other sites

Warren Buffett on "Mortgage Debt as an Investment" (he's against)

http://www.americaneer.com/mcmansions/

Excerpt (feel free to read the article)

"I hear media reports where financial advisors talk about about good debt and bad debt. I think there is NO good financial debt, whether its origin is your local pay check cashing business or a Wall Steet firm. If debt was good, Microsoft Corporation and Cisco Systems would not have billions of dollars of cash on their balance sheet."

I heard Warren say in an interview that it's pretty hard to borrow money at 5% and come out ahead reinvesting it.

Pay off the mortgage! Every Financial guru saying otherwise is just trying to sell books and newsletter subscriptions.

Warren Buffet knows his $hit.

Link to comment
Share on other sites

The mileage restrictions do suck on leases. Agreed. If you go over they nail you pretty good. Age is another issue when making debt. Im gonna be 50 in a few years and looking to retire. Im also recovering from a serious injury and that puts alot into perspective. Young people think they will never get old.

Problem with leasing is you really own nothing. Had a leased car and while at a full stop on the BQE was rear-ended into a truck by some druggie in a POS SUV. I was in no way at fault. Thankfully I wasn't hurt, but the car was totalled. I was well ahead of the mileage number, but worse than that, when I called GMAC and the insurance company, rudely found out there wasn't going to be a new car, and still owed GMAC $750 for I don't know what.

Would suggest anyone pay cash up front if you can, or keep the payments low and manageable. The day you drive it off the showroom floor the car is wroth almost half of the sticker price. But at least you own something of value. And that is not the case with a lease.

Link to comment
Share on other sites

I usually let deer decide when I buy cars.

I'm a consultant & drive a lot. I have a 2001 Saturn with 265,000 miles. Haven't made a payment since 2006.

I'll pay cash for my next used car when this quits, or I hit the next deer and the Ins Co totals me out.

The scare tactic of new cars vs. paying maintenance is overblown. I change the oil, accelerate gently and this car REFUSES to die.

I'm hoping it lasts long enough I can get a Ford Escape Hybrid < 10,000. I've read that the battery banks last forever and that dirty contacts make people "think" the batteries have died. Such a vehicle would get me 25-ish mpg, same as my saturn, with SUV space for my stuff.

Link to comment
Share on other sites

Problem with leasing is you really own nothing. Had a leased car and while at a full stop on the BQE was rear-ended into a truck by some druggie in a POS SUV. I was in no way at fault. Thankfully I wasn't hurt, but the car was totalled. I was well ahead of the mileage number, but worse than that, when I called GMAC and the insurance company, rudely found out there wasn't going to be a new car, and still owed GMAC $750 for I don't know what.

Would suggest anyone pay cash up front if you can, or keep the payments low and manageable. The day you drive it off the showroom floor the car is wroth almost half of the sticker price. But at least you own something of value. And that is not the case with a lease.

Did you have GAP insurance that usually covers the difference. Many lease companies used to give it for free. Im sure now they charge. I agree with your statement of "the day you drive it off the showroom floor the car is worth half the sticker price" they why buy and not lease? Buying and leasing has its pros and cons. Having a car payment sucks anyway you look at it.

Link to comment
Share on other sites

The day you drive it off the showroom floor the car is wroth almost half of the sticker price. But at least you own something of value. And that is not the case with a lease.

I'm glad that I don't give a crap about cars. My car gets me where I want to go. It's not a luxury item, and it's not something I'm showing off. I've never gotten a date because of my car.

I always buy used. Always. Usually from a dealer that's already made a killing on the car by leasing it out, and now it's back. It's got low mileage, and the oil has been changed every 3000 miles - usually at the dealership (even though the manual says you don't have to change it more often than 5000 or 10,000 miles nowadays). It's clean and even smells like a new car.

I've got a 2003 Honda Accord that I love. It's got a sunroof, 6 cylinders, a good stereo, and 130,000 miles. I'd hold onto it until it quit on me, but my 15 year old son already has his eyes on it for next year when he hopes to be driving. So it'll be another late model, used Honda for me when that time comes.

And while I believe in paying off my house with worthless 30 years from now dollars, I pay off all my credit cards, and pay off car loans inside of a year.

Link to comment
Share on other sites

Problem with leasing is you really own nothing. Had a leased car and while at a full stop on the BQE was rear-ended into a truck by some druggie in a POS SUV. I was in no way at fault. Thankfully I wasn't hurt, but the car was totalled. I was well ahead of the mileage number, but worse than that, when I called GMAC and the insurance company, rudely found out there wasn't going to be a new car, and still owed GMAC $750 for I don't know what.

Would suggest anyone pay cash up front if you can, or keep the payments low and manageable. The day you drive it off the showroom floor the car is wroth almost half of the sticker price. But at least you own something of value. And that is not the case with a lease.

The object of a lease is not to own a car, but to drive one for less money then it would cost to buy.

Buying a new car for cash gets you that big depreciation hit you are talking about.

If you plan on getting a new car every 2-3 years then there will not be much value in the one you bought anyway, and if you keep it for twice as long, theres not much value left there either.

The best way to avoid that is to buy something 1 or 2 years old with low mileage, let the guy who bought it new take the hit.

Link to comment
Share on other sites

Let us not also forget that when we pay off our 150k house in 30yrs with worthless/devalued currency... we've paid 350,000 worthless dollars for that 150,000 house.

Just sayin'.

More like $250K at today's rates.

Everyone has to make their own decision on the issue. Each person's situation is different. If you're pretty much living debt-free in every other aspect of your life, that mortgage probably isn't going to hurt you. Your income will grow a lot over those 30 years. If you're making extra payments, or signed on for a shorter term to pay it off sooner, and that's resulting in carrying credit card debt, or car loan debt, or other personal loans, then you're probably falling behind in the long run.

Link to comment
Share on other sites

Did you have GAP insurance that usually covers the difference. Many lease companies used to give it for free. Im sure now they charge. I agree with your statement of "the day you drive it off the showroom floor the car is worth half the sticker price" they why buy and not lease? Buying and leasing has its pros and cons. Having a car payment sucks anyway you look at it.

It does, but without dependable transportation in todays society youre SOL.

Im leery buying used and being stuck with somebody elses problem. And, the price of some used cars today are almost as much as a new one. Right now is the best time to buy a new 2010 with the 2011s rolling in. Ive made some good deals that way and it doesnt bother me that the vehicle is theoretically a year old.

Link to comment
Share on other sites

It does, but without dependable transportation in todays society youre SOL.

Im leery buying used and being stuck with somebody elses problem. And, the price of some used cars today are almost as much as a new one. Right now is the best time to buy a new 2010 with the 2011s rolling in. Ive made some good deals that way and it doesnt bother me that the vehicle is theoretically a year old.

Agreed try to grab a 0% special for 5 years. Problem is a $36.000 dollar car or truck will cost you $600.00 a month. I can buy a nice cabin in the poconos for alot less a month. But everyone needs a good reliable car. I seem to always get a good deal whenever im in the market for a vehicle.

Link to comment
Share on other sites

Agreed try to grab a 0% special for 5 years. Problem is a $36.000 dollar car or truck will cost you $600.00 a month. I can buy a nice cabin in the poconos for alot less a month. But everyone needs a good reliable car. I seem to always get a good deal whenever im in the market for a vehicle.

I never realized that property in the Poconos was so reasonable.

A nice getaway like that would be hard to pass up and will surely appreciate in the future. The economy will eventually improve and I think it will be back with a vengeance. Particularly real estate and construction.

Link to comment
Share on other sites

Agreed try to grab a 0% special for 5 years. Problem is a $36.000 dollar car or truck will cost you $600.00 a month. I can buy a nice cabin in the poconos for alot less a month. But everyone needs a good reliable car. I seem to always get a good deal whenever im in the market for a vehicle.

I bought a Jeep Laredo in the spring. I think it stickered at $34,000 or so. Because I had a Chrysler and with all the other promos it was like 7k off sticker before they even started negotiating with me. Add in the 0% for 5 years and I was sold.

Link to comment
Share on other sites

I never realized that property in the Poconos was so reasonable.

A nice getaway like that would be hard to pass up and will surely appreciate in the future. The economy will eventually improve and I think it will be back with a vengeance. Particularly real estate and construction.

Houses in the Poconos haven't appreciated much. The prospects don't seem much better. There is SO much land available.

Link to comment
Share on other sites

Houses in the Poconos haven't appreciated much. The prospects don't seem much better. There is SO much land available.

I was comparing the upside to buying a place in the mountains vs buying a new car.

But, I would imagine like any city, the closer you are to the city limits, the more you will spend. And the more it will appreciate when folks start buying in those areas again.

Link to comment
Share on other sites

I bought a Jeep Laredo in the spring. I think it stickered at $34,000 or so. Because I had a Chrysler and with all the other promos it was like 7k off sticker before they even started negotiating with me. Add in the 0% for 5 years and I was sold.

So your paying approx $425 a month after adding sales tax if you didnt put a dime down.

Houses in the Poconos haven't appreciated much. The prospects don't seem much better. There is SO much land available.

This is true but theres some really nice homes under $80K that can be financed for 20 years for under $400 a month. And you own a weekend get-a-way and another tax write off.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.


×
×
  • Create New...