Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 10-06-2008, 06:07 PM   #61
W2R's Avatar
Join Date: Jan 2007
Location: New Orleans
Posts: 34,830
SecondCor521, that is a good point. I think that if one is not already maxing out retirement savings such as 401K savings, it probably isn't yet time to pay off one's house.

At least that is my thinking. I suppose different situations are different. In my case I maxed out my TSP and paid off my house at the same time, but at the expense of any excess to put into taxable investments. Well, maybe some, but not as much as I would otherwise have accumulated.

"You can never cross the ocean until you have the courage to lose sight of the shore." - - - C. Columbus
W2R is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-06-2008, 06:21 PM   #62
Recycles dryer sheets
Ultimate Cheapskate's Avatar
Join Date: Jun 2008
Posts: 134
Originally Posted by SecondCor521 View Post
Sorry if I'm stomping on board etiquette by turning this into "yet another pay off the mortgage" thread, but the above reminded me of another reason I am not paying off my mortgage.

Right now I am paying my regular monthly mortgage payments and am also maxing out many of the typical things: 401(k), Roth IRA, 529, ESA. If I were to divert funding away from those savings vehicles in order to pay off my mortgage, then I could pay it off in about 5 years. But then I would probably be able to max out those savings vehicles again and still have extra cash left over which I would want to save, so I'd probably stick that in a taxable account.

I haven't run the simulations on which is better, but I currently don't like the thought of losing out on the next 5 years of contributions to those savings vehicles because I won't be able to make it up later.

"Could' vs. "probably" - that's the choice, brother.

Stay Cheap!
-Jeff Yeager

Ultimate Cheapskate is offline   Reply With Quote
Old 10-06-2008, 06:42 PM   #63
Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,470
Originally Posted by Nords View Post
Well, I'm no fanatic, but I'm in Animorph's camp and I have the data to back it up.

Covering a mortgage without losing your ass(ets).

Short story-- 5.44% after-tax APY on a 5.375% mortgage after four years of payments.

Of course if you have the cash to pay off a mortgage the return of the stock market is not the comparison but the amount of shares the future cash flows a DCA from what will be the mortgage payment versus a lump sum investment plus dividends. $6,719.65 per year investments per 100K mortgage. A prolonged downturn below the original price will result in the mortgage being prepaid being better. A big bull market early that holds will make the lump sum a better investment. It is very easily possible that the DCA instead of mortgage payments will cause a need of much greater than the 5.375 rate of the mortgage. A five year bull market at the end could cause both to exceed nine percent...

Running_Man is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
pay off the house or no? retiringat50 FIRE and Money 49 01-28-2008 07:38 PM
Hmm, stock market or Money Market/CD? Moneycoming Stock Picking and Market Strategy 4 08-14-2007 06:41 PM
To Pay Off the House ... Or Not? Rosalita FIRE and Money 9 05-16-2006 06:11 PM
Pay off the House Sheryl FIRE and Money 45 05-07-2004 12:22 PM


All times are GMT -6. The time now is 03:37 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.