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Old 06-17-2007, 11:16 AM   #21
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Also AS, that mortgage interest is not deductible for you in your high marginal tax rate. A good rule of thumb is to always pay off non-deductible debt first.

I did the opposite but not through any foresight. Sold the big estate home, paid of the mortgage and rented a penthouse, putting the net proceeds in the market. That decision has enabled me to retire early.
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Old 06-17-2007, 11:39 AM   #22
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What?!? You sold your house and made a lot of money from it, invested it and made more money from that?!?

Supposedly, this is an implausible outcome. You must be lucky.

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Old 06-17-2007, 12:46 PM   #23
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Yes, home was 185K, and a recent evaluation pegged the value at 500K...this is in Edmonton where house prices are outrageous in my opinion now. Crappy 2 bedroom condos are going for 250K. One thing for sure is that I bought at the perfect time as 2003ish is when prices went out of control. Some of the employees I supervise are just starting out making 40K a year and buying 400K houses....they are really scraping each month to get by even with a spousal second income.
Let me get this straight. You have 100% equity in a $500K house which you bought for 37% of its current value, and you're complaining?

Suggestion: sell Edmonton house, move to New Brunswick and buy dream home for $200K. Invest $300K for FIRE, incurring no capital gains tax on sale of principal residence. Telecommute.
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Old 06-17-2007, 01:18 PM   #24
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Being conservative will always cost you money relative to a best case outcome. Conservatism shines during heavy seas.

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Old 06-17-2007, 01:38 PM   #25
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Let me get this straight. You have 100% equity in a $500K house which you bought for 37% of its current value, and you're complaining?
My thoughts exactly.
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Old 06-17-2007, 01:52 PM   #26
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Quote:
Originally Posted by cute fuzzy bunny View Post
What?!? You sold your house and made a lot of money from it, invested it and made more money from that?!?

Supposedly, this is an implausible outcome. You must be lucky.

Touchee CFB. But I did say "not through any foresight."
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Old 06-17-2007, 04:15 PM   #27
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Just be sure that it never happens again. Or you might have to become a real estate mogul.

So I take it that we're not really disputing real estates value as an investment...just that its not possible to make money on it through foresight?

Cuz jeez...I can say the same about almost any investment...if you could buy and sell with foresight, there'd be zero risk premium and no significant returns to be made.
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Old 06-17-2007, 04:23 PM   #28
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Foresight? It helps that kcowan lives in Vancouver, rated #1 city in which to live, with an Olympics coming, and accountingsucks lives in Edmonton, where oil is king.....

Red-hot real-estate market breaks records in May
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Old 06-17-2007, 04:27 PM   #29
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Ah...so you're saying that profiting on your home can involve some planning to improve ones success?


This "luck" theory seems to be taking on water...
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Old 06-17-2007, 04:31 PM   #30
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Ah...so you're saying that profiting on your home can involve some planning to improve ones success?


This "luck" theory seems to be taking on water...
Yeah. When I lived in Pittsburgh in the 80s, one of my colleagues bought a row house in steeltown for $15K. When he had finished with it, it looked like House Beautiful, and the neighbours had caught the reno bug. Wonder what it's worth now?
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Old 06-17-2007, 10:04 PM   #31
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I borrowed more on my house last Aug and have made about 29K on the extra 114K I borrowed. It was a major risk but so far so good. When I retire I will move this will allow me the funds to pay cash for my retirement home if I want so I don't need to finance then sell this house and invest that money. I could finance the new house and keep the investment and sell this house and invest the money going into retirement with a 100% mortgage. The investments would probably pay the mortgage payments but I wouldn't be happy having to take out money each month. With no mortgage I could live on SS and rental income so if my investments failed I would be OK. Being OK isn't great but it is way better than not being OK.
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Old 06-18-2007, 06:01 AM   #32
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In 1997 we were very heavily invested in company stock. We sold some of our company stock to pay off our mortgage - this was a way of lessening our risk. If things blew up or we lost jobs, at least we didn't need to worry about the monthly mortgage bill. (We were no longer getting tax benefits from the mortgage anyway - annual interest paid was too low).

The company stock did very well - probably doubled or tripled from there. No question that paying off the mortgage "cost" us in terms of profits from company stock - maybe 100K or more. But IMO it was a very prudent decision considering the considerable financial risk, and it really did help us sleep better at night. I don't regret it for a minute.

How we slept at night holding all that company stock I have no idea, but it did ultimately let us retire way early. If we had diversified like a "prudent" individual would, we would either still be working or retired on a much slimmer budget.

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