Next poll...honing in on mortgages

[cute fuzzy bunny]

Couple of polls to hone in on the mortgage question.

In essence, is the idea of debt a major or minor consideration when making the decision to have one, whether working or not?

I'm going to run a concurrent poll on why you have the mortgage...this is just to hone in on the level of irrational (hate to use the word but there it is) factoring.

[education]

We paid off the mortgage in 2002. It took a chunk out of our retirement savings, but we felt the market was so horrible and we saw our assets tanking rapidly, so we bite the bullet. We had an $18,000 tax liability do to the structure of some our our accounts (damn those FPs and their annuities). But we are really saving a ton of interest and I love nothing better than to gig the bankers. When I asked for the payoff, the banker was upset and asked why I was doing something like that (read as meaning stupid). I told her it was for two reasons:
I want to--and I can. Boy, did that feel good!!!!!! Have I ever regretted the payoff? Not one bit.

Professor

[MRGALT2U]

Originally Posted by Professor

We paid off the mortgage in 2002.* It took a chunk out of our retirement savings, but we felt the market was so horrible and we saw our assets tanking rapidly, so we bite the bullet.* We had an $18,000 tax liability do to the structure of some our our accounts (damn those FPs and their annuities).* But we are really saving a ton of interest and I love nothing better than to gig the bankers.* When I asked for the payoff, the banker was upset and asked why I was doing something like that (read as meaning stupid).* I told her it was for two reasons:
I want to--and I can.* Boy, did that feel good!!!!!!* Have I ever regretted the payoff?* Not one bit.

Professor

I understand the appeal of being without a mortgage. However, in my
"big spender" days, no amount of debt fazed me. I instinctively
believed that I should borrow all of the money I could find
(from all sources) because I would make money by using OPM.
It mostly turned out to be true.

JG

[cute fuzzy bunny]

Fascinating. Tell us all a story about any instance where you used "OPM" to make money.

[MRGALT2U]

Originally Posted by (Cute Fuzzy Bunny)

Fascinating.* Tell us all a story about any instance where you used "OPM" to make money.

Go f**k yourself, and kindly note the lack of a smiley face.

JG

[Nords]

Originally Posted by MRGALT2U

Go f**k yourself, and kindly note the lack of a smiley face.
JG

Ah, now, JG, we expect better of a Mensa member capable of the following quote:

Originally Posted by MRGALT2U

We already have one egomaniac here and that is probably sufficient. Besides,
I was here first

or, as Jarhead says, "a world-class bull$hitter".

[Craig]

Frankly, there are millions of stories about using OPM to make a ton of money ... some of them even on these boards. The question may not have been meant so, but it did come across as impertinent.

Anyone who has chosen to use a 6%, tax deductible mortgage while piling money into 10% average yield funds is using OPM ... not to mention commercial real estate, purchases of businesses, ...

The PEG / VC industry makes billions this way ...

[cute fuzzy bunny]

No, it was very impertinent. I'm qujite sure that "John Galt" has never made a penny of anything with "OPM", its just another case of throwing something out there that sounds really, really important. Anytime you ask him to give any specifics, you get a song and a dance or something that clearly shows he doesnt know what he's talking about.

I dont mind bullshit. I dont mind volume. Volumes of bullshit gets old pretty fast, particularly when its hardly ever productive, accurate or useful.

[MRGALT2U]

Originally Posted by (Cute Fuzzy Bunny)

I dont mind bull****.* I dont mind volume.* Volumes of bull**** gets old pretty fast, particularly when its hardly ever productive, accurate or useful.

Some of us do mind, and if you really feel this way, why do you keep putting it on here? Post count? I am sure you recall
my calling
you an
ignorant p***k. I was too kind. Seriously.

JG

[cute fuzzy bunny]

Can you put that in a photo for me and post it Johnny?

Considering the lack of respect you usually tender to your wife and children, I should certainly not expect anything better.

As far as post count, only one person here seems to care about that. I've asked a number of times for it to be removed, as my expectation is that without that ridiculous measuring stick, you'd post a lot less.

At least that would be a lot of peoples fondest hope.

As far as a real measure of contribution...lets see...you arent even in the top 20 for starting new topics. You've never started or taken a leadership role in any significant discussion of any kind as far as I can remember. Your claims of retiring early on just your brain power and will power are somewhat stunted when people find out you have a measly 300k in net worth, 100k in credit card debt and your wifes job pays the bills while you sit home. When people point out that you dont know what you're talking about 95% of the time, you start name calling.

A real quality person: you keep up the good work! And send more photos!

[yakers]

Originally Posted by Professor

I want to--and I can.* Boy, did that feel good!!!!!!* Have I ever regretted the payoff?* Not one bit.

Professor

That is as good an explanation of why to be FI as I have heard.

Rather than reposting an old post I'll see if I can link it ( http://early-retirement.org/forums/i...14779#msg14779 ) The question of whether or not to pay off the mortgage is a perenial one. There are at least two possible answers but only one for me. I just find being in debt as a form of self inflicted slavery.

One interesting thing for me is that there are some things I bought which gave me an intitial rush but have faded. This has not happenned with paying of the mortgage.

[cute fuzzy bunny]

We dont have a great sample yet, but I'm surprised at how many people weighed the 'no debt!' feelings higher than the numbers or didnt care about the numbers at all. A majority of 40% vs 37.5 who prioritized the numbers and 25% who weighed them equally. I'm also surprised that nobody took " Debt doesnt scare me" option. I figured we'd have at least one or two that would try to arb their debt no matter what.

[Helen]

We only paid $100k for our home about 14 years ago. The banks would have lent us a lot more, but we both hate having debt. We were able to save for retirement while making house payments. We paid the sucker off last year. We are now putting the old mortgage money into I-bonds. We will live off the I-Bonds the first 4 years of retirement.

-helen

[eridanus]

Originally Posted by Nords

or, as Jarhead says, "a world-class bull$hitter".

On the internet, anyone could be a (alpha) dog. Yes, that means me, Jarhead, Galt, and even you.

My mortgage is around 5.625%. I could pay it off but I hate to deplete my savings so much. I should pay off the 2nd lien on a rental property...it's an albatross.

[Nords]

Originally Posted by (Cute Fuzzy Bunny)

I figured we'd have at least one or two that would try to arb their debt no matter what.

Well, we studied the numbers and made a decision with limited risk.

It's a lot easier to make that decision at 5.375% than at 8%...

[wabmester]

Originally Posted by Nords

... or, as Jarhead says, "a world-class bull$hitter".

Let me say this as a mostly impartial observer who doesn't visit this site as much as he used to.

The pissing contests and posturing that go on here remind me of the W-O-R-K-place. I thought we left that crap behind. Please reign it in. And repeated provocation from a moderator is especially distasteful.

As JG might say, "Quis custodiet ipsos custodes?"

And remember: you're all special in your own special way.

[azanon]

How much did the idea of debt concern you in making a mortgage decision

The poll choices were not all inclusive apparently.* I wasn't phased by borrowing (going in debt) per se, but just made sure that my total payment on a 30-year loan was plenty low (its about 12% of my takehome pay) relative to what I bring in.

So if we're only talking about debt per se, i wasnt worried about it (choice 5, bring it on).* But obviously I wouldnt want more than i can handle, so i just picked #4.* Any of the choices reflecting fear in debt wouldnt be right for me either (1-3) because i'm always out for the option that will make me the most money, even if it means having borrowed money.

At 5.96% interest, and a tax deductible loan, i'm really not worried about my home loan at all.* I realize that's a decent percentage to you T-bill, TIPS, and bond lovers.* But i invest exclusively in stocks.

Azanon

[cute fuzzy bunny]

Well, lets be careful with that term 'limited risk'...comparing small cap value to mortgage prepayment risks are like comparing a cup of whipped cream and a cup of tabasco.

You're an odd bird in this equation. You've got cola pension income that can pay the bills, you're not planning on moving for the term of the loan, you're planning to run the full 30 years of the loan, and you have no bond holdings earning less than the mortgage. And your working life in a slim metal tube under a thousand feet of water slaving over a hot nuclear reactor probably means you're not going to be the first guy to flinch after a 5-7 year downturn. By the way, did you guys ever have someone crop up and say "lets light half the sub on fire or electrify every 3rd button at random!", just for kicks?

Compared to someone who doesnt have a cash income, figures to live in the home for the average 7 years, cut the term of the mortgage short at that time, and holds 30-40% in cash and bonds paying 1-3% below their mortgage rate...

You're one of those outliers I keep talking about.

[justin]

I voted #5 - bring it on.

Got a 30 year adjustable rate mortgage on my house a couple years ago for 125% of my purchase price. Still paying 3.75% interest on that bad boy. Over the next decade, the rate will increase some (1% every 2 years), up to a max of 9.75%. We essentially paid cash for the house, then refinanced into this ARM a little while after closing (didn't like the hassle of financing at closing). The proceeds were mostly invested in stocks in addition to paying off some higher rate debt. We do plan on paying off the loan within 10 years or so.

DW and I owe low six figures in college loans. However, the rates are locked for 30 years around 1% APR.

I play the zero percent credit card interest rate arbitrage game. Getting close to a six figure portfolio of that type of debt.

We aren't debt averse, you might say. Smart debt is good. The carrying costs of the debt we have are less than 50% of one of our take home paychecks. And we have substantial assets "in the bank" to back us up.

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