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Re: Cashing out home equity to invest in Mutual Funds
Old 05-04-2007, 09:45 PM   #41
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Re: Cashing out home equity to invest in Mutual Funds

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Originally Posted by Mwsinron
The stock market cant possibly lose money this year.....
Wow your friends telling you that also, I just heard the same thing at a poker game.
My friend, a reformed broker. and I immediately started making a list of things to sell after hearing this bit of wisdom.

Depending on the interest rate of the mortgage it may or may not make sense to pay it off.

Because of the transaction cost involved with refinancing and the pyschological differences, I think it is much wiser to chose to invest in the market with excess cash rather than use your house as a margin loan to invest in the market.
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-04-2007, 10:03 PM   #42
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Re: Cashing out home equity to invest in Mutual Funds

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Originally Posted by Cute Fuzzy Bunny
Yeah right.

Please do a thread search on 'paying off the mortgage', before you start world war 16. Again.
Says the leader of the "I hate the CPI" brigade...
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-04-2007, 11:00 PM   #43
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Re: Cashing out home equity to invest in Mutual Funds

I took out an adjustable rate HELOC when rates were heading down and invested $175k. That was August 2001, so it turned out to be a lousy time to do it.

I held on until I was at breakeven about 4 years later and interest rates were looking too high again. Not too great, but I'd try it again next time the market looked low enough and the rates were OK.

Generally the first $100k is deductable. The rest is deductable as an investment expense. AMT treats it all as an investment expense, so the tax treatment can be a pain in the butt to work though.

One added risk I didn't like was that my HELOC's term was only 7 years. It's supposed to be easy enough to renew, but I didn't want to be in a position of having the loan disappear while the market was down.

Dan
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-05-2007, 12:25 AM   #44
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Re: Cashing out home equity to invest in Mutual Funds

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Originally Posted by Cute Fuzzy Bunny
Yeah right.

Please do a thread search on 'paying off the mortgage', before you start world war 16. Again.
The way I understand the history, I know about WWI, and WWII. I understand WWIII is the cold and sometimes hot war, WWIV is the war on terror, or global islamic fascist. WW V is abortion. WW VI The Donald vs Rosie. WW VII is ***** (how come his name was censor last time I menitioned him) vs the rest of the ER community. WW VIII is rent vs buy in ER. WW IX is SWR, WW X is pay off mortgage WW XI is TIPs vs Wellsley.

Could you help fill in 12 thru 15.

TIA
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-05-2007, 09:35 AM   #45
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Re: Cashing out home equity to invest in Mutual Funds

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Originally Posted by brewer12345
Says the leader of the "I hate the CPI" brigade...
I hardly hate the CPI.

I simply like to point out that it is a specific measure of changes to specific costs which may or may not apply to everyone, that people should understand their personal cost of living in relation to the CPI, and not just jump to the conclusion that a CPI indexed investment produces a "real" return for their instance.

I hear some people feel that personal cost of living isnt relevant, but it sort of is if the stuff and services you tend to buy increase in cost to the point where you can no longer afford them, and your investment style hasnt kept up.

Otherwise, I think that a calc that measures cost of living for an urban worker who rents and apartment and doesnt pay for health care may bear only coincidental similarity to a suburban retiree who owns their own home and pays out of pocket for health care.

You missed quite a few wars Clif... the sign of a bunch of BPD candidates who are out of work and have to find windmills to tilt against.
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-05-2007, 09:44 AM   #46
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Re: Cashing out home equity to invest in Mutual Funds

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Originally Posted by ADJ
I have a small mortgage balance of about 200K. I have enough cash sitting around to pay it off. For those that don't think I should refinance to pull out cash, would you suggest paying of the mortgage balance rather than investing in mutual funds?
If you have more than $200k sitting around in cash, then you cannot be trying for maximum returns on your equity. Continuing to do nothing seems to be the most likely approach.
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-05-2007, 12:43 PM   #47
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Re: Cashing out home equity to invest in Mutual Funds

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Originally Posted by clifp
Wow your friends telling you that also, I just heard the same thing at a poker game.
My friend, a reformed broker. and I immediately started making a list of things to sell after hearing this bit of wisdom.
It's a very profitable good thing you get to play poker with prognosticators like that. Do they know their true odds of drawing to that inside straight?

Here's another sign of the stock market's approaching apocalypse. I track 16 tickers at my Fidelity.com home page, fourteen of which we own or short and two that we're considering. Fourteen of the sixteen were up on Friday. The only two that were down... were the ones I'm shorting.

Yup, this market can't possibly go any higher.

Hey, Clif, lemme know the next time you're in a game with that market wizard (not the reformed broker!) and you need a fifth... or a sixth... or a seventh... oh, hey, waitaminnit-- which one of them is ratting you out to HPD?
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-05-2007, 05:43 PM   #48
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Re: Cashing out home equity to invest in Mutual Funds

Boy... sentiment must be very positive. We are probably around a market top in Big caps in the next 12 months... When people start talking Heloc and Credit card Tickler rates for leverage.


Is it time to run?

Stay well diversified. Greed is taking over. Soon, the stampede will start when those same people fall apart when fear takes over!.
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-05-2007, 07:42 PM   #49
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Re: Cashing out home equity to invest in Mutual Funds

I have no clue what will happen. So I guess Ill just keep my penny's in the same spot they have been However if I was a dirty market timer Id head for the hills...
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-05-2007, 11:42 PM   #50
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Re: Cashing out home equity to invest in Mutual Funds

I don't think we've hit the top yet, to many people saying "We've hit the top".

We need fewer people saying that, and more people saying, "this time its different".... Then we've hit the top
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-06-2007, 12:50 AM   #51
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Re: Cashing out home equity to invest in Mutual Funds

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Originally Posted by dgalbraith100
I don't think we've hit the top yet, to many people saying "We've hit the top".

We need fewer people saying that, and more people saying, "this time its different".... Then we've hit the top
Agreed, ... taxi drivers and the counter guy at the deli haven'tt been touting their 'buys' yet.
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-06-2007, 11:27 AM   #52
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Re: Cashing out home equity to invest in Mutual Funds

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I don't think we've hit the top yet, to many people saying "We've hit the top".
Was it Rothschild who said "I got rich by selling early"?
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-06-2007, 11:40 AM   #53
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Re: Cashing out home equity to invest in Mutual Funds

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Originally Posted by chinaco
Boy... sentiment must be very positive. We are probably around a market top in Big caps in the next 12 months... When people start talking Heloc and Credit card Tickler rates for leverage.


Is it time to run?

Stay well diversified. Greed is taking over. Soon, the stampede will start when those same people fall apart when fear takes over!.
I read an article by Jeremy Siegel somewhere saying the fundamentals are still good for the short-term for both US and international stocks.
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-06-2007, 01:44 PM   #54
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Re: Cashing out home equity to invest in Mutual Funds

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Originally Posted by Cute Fuzzy Bunny
Was it Rothschild who said "I got rich by selling early"?
Could be. Many seem to think that Bernard Baruch said "I sold too soon" in response to questions about how he got rich, but I couldn't find a source.
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-06-2007, 03:52 PM   #55
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Re: Cashing out home equity to invest in Mutual Funds

I think i've heard it attributed to several wealthy type folks.

Do note that I was considered a moron for 7 years for selling my company stock every year and diversifying, and then absolutely crazy for getting out of the market altogether in 2000.

Took 7 years to become a genius the first time, and about nine months the second time.

So pay close attention the next time someone says I'm an idiot.

Wait for it...
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-06-2007, 04:01 PM   #56
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Re: Cashing out home equity to invest in Mutual Funds

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Originally Posted by Cute Fuzzy Bunny

So pay close attention the next time someone says I'm an idiot.
(I've typed and deleted three responses to this juicy setup. I can't make up my mind... talk about a target rich environment...)


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Re: Cashing out home equity to invest in Mutual Funds
Old 05-06-2007, 04:06 PM   #57
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Re: Cashing out home equity to invest in Mutual Funds

Oh come on...I'm trying to make it easy on you weak eyed old farts from texas that dont even know how to make decent barbecue like they do in carolina.

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Re: Cashing out home equity to invest in Mutual Funds
Old 05-06-2007, 04:08 PM   #58
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Re: Cashing out home equity to invest in Mutual Funds

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Originally Posted by Cute Fuzzy Bunny
Oh come on...I'm trying to make it easy on you weak eyed old farts from texas that dont even know how to make decent barbecue like they do in carolina.

I think you might have justed started WW3
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-06-2007, 04:18 PM   #59
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Re: Cashing out home equity to invest in Mutual Funds

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Originally Posted by Cute Fuzzy Bunny
weak eyed old farts from texas that dont even know how to make decent barbecue like they do in carolina.

CFB wins this one, hands down. Real Americans don't eat beef barbecue.
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Re: Cashing out home equity to invest in Mutual Funds
Old 05-06-2007, 04:19 PM   #60
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Re: Cashing out home equity to invest in Mutual Funds

Quote:
Originally Posted by Cute Fuzzy Bunny
Oh come on...I'm trying to make it easy on you weak eyed old farts from texas that dont even know how to make decent barbecue like they do in carolina.
Quote:
Originally Posted by Cute Fuzzy Bunny
So pay close attention the next time someone says I'm an idiot.
I think it's time everyone started paying close attention...

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