cardude
Full time employment: Posting here.
- Joined
- Feb 21, 2006
- Messages
- 599
OK, I know this subject has been beaten to death on this forum and I apologize.
I ran the numbers on Firecalc and my success rate goes from 96% to 100% if I pay the house off and lower the portfolio value by the same amount (and decrease my spending by the amount of the house payment). My cash is earning only 1.6% and the house is at 5%, so it sounds like a no brainer.
The reason I ask is because I've been agonizing over what to do with the 10 years of cash I built up the last couple of years, but which is now earning almost nothing, and it just dawned on me I should probably just pay the stupid house off and go on to the next problem. I wanted the extra secuirty blanket of all that cash when I FIRED, and I though I would be able to put a bunch of it to use when the market tanked last year, but all I did was suck my thumb and do nothing so that obviously didn't work.
Am I thinking right? After paying off the hosue I will still have about 6.5 years of expenses in cash if DW keeps working and the rental properties hold up, and about 4.5 years if one of the shakier rentals goes south (the old car dealerhips) and the wife quits.
I ran the numbers on Firecalc and my success rate goes from 96% to 100% if I pay the house off and lower the portfolio value by the same amount (and decrease my spending by the amount of the house payment). My cash is earning only 1.6% and the house is at 5%, so it sounds like a no brainer.
The reason I ask is because I've been agonizing over what to do with the 10 years of cash I built up the last couple of years, but which is now earning almost nothing, and it just dawned on me I should probably just pay the stupid house off and go on to the next problem. I wanted the extra secuirty blanket of all that cash when I FIRED, and I though I would be able to put a bunch of it to use when the market tanked last year, but all I did was suck my thumb and do nothing so that obviously didn't work.
Am I thinking right? After paying off the hosue I will still have about 6.5 years of expenses in cash if DW keeps working and the rental properties hold up, and about 4.5 years if one of the shakier rentals goes south (the old car dealerhips) and the wife quits.