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07-31-2014, 09:20 PM
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#61
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 2,844
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Quote:
Originally Posted by samclem
ad hominem?
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It was just a bad joke, in the book he stated that people with unhappy retirements are more likely to drive a BMW than a Honda. In combination with his study that showed that people that had mortgages were more likely to have an unhappy retirement and that the #1 car in this group was a BMW I thought it was a funny quip, but I didn't really think it through. Just stated that after watching the Last Comic Standing so jokes were on my mind, for some reason at the time I though that was funny but I can see how the intended humor would be missed.
__________________
But then what do I really know?
https://www.early-retirement.org/forums/f44/why-i-believe-we-are-about-to-embark-on-a-historic-bull-market-run-101268.html
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07-31-2014, 09:33 PM
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#62
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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Quote:
Originally Posted by Running_Man
It was just a bad joke, in the book he stated that people with unhappy retirements are more likely to drive a BMW than a Honda.
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Gotcha. I figured it was a ref to the long-running series of "BMW drivers are jerks" jokes.
I've never owned a BMW . . . but I might still be a jerk.
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08-01-2014, 06:32 AM
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#63
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Full time employment: Posting here.
Join Date: Nov 2008
Posts: 728
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Here are my three items for a happy retirement......or, as I like to say the three items that make me the luckiest person in the world.
1. My health....without health I have nothing.
2. My family.....with my wife being my best friend.
3. Enough money to put a roof over my head and food on the table....no financial worries.
I have all of these and......if you have them, you too are the luckiest person in the world!
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08-01-2014, 09:01 AM
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#64
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Thinks s/he gets paid by the post
Join Date: Sep 2007
Posts: 1,214
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Quote:
Originally Posted by Running_Man
Do you drive a BMW?
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I do.
Which has a loan at 1.99%.
Have a mortgage, too, 30 years at 4%.
I'm retired, and quite happy. And collecting ~7% dividend yield on my portfolio of bonds and preferred stocks. Nobody has ever even tried to explain how I'd be happier or better off by cashing out the portfolio to pay off the mortgage and car note.
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08-01-2014, 11:41 AM
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#65
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,888
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And I don't agree.
All you have to do is understand and accept the difference in 'risk'. After all, what is an Asset Allocation other than having different assets with different 'risk' profiles? So one can decide to trade the relative safety of eliminating the interest payment for the volatility and reasonable expectation of long term returns in the market. They should consider how this fits their overall AA.
Let me ask you this: If you feel this way, do you advocate absolutely zero investment in anything until the mortgage is paid off? It seems anything else is hypocritical, unless you can get zero-risk investment at above your mortgage rate (not likely). That would leave a lot of people out of the market for a long time. Heck, I guess you are saying they should even forego a company match on a 401K, because even with a 50% match, well, stocks can drop that much - there is no guarantee. If you want Apples-to-Apples, isn't that it?
-ERD50
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08-01-2014, 01:30 PM
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#66
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,259
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Quote:
Originally Posted by rayvt
I do.
Which has a loan at 1.99%.
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1.99% on a BMW??
My Toyota has a 0.9% loan, less than 1/2 your rate. Why are you so profligate?
Of course, compared to my child, who has a 0% loan, we are both rather imprudent.
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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08-01-2014, 01:48 PM
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#67
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gone traveling
Join Date: Sep 2013
Posts: 1,248
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Quote:
Originally Posted by ERD50
And I don't agree.
All you have to do is understand and accept the difference in 'risk'. After all, what is an Asset Allocation other than having different assets with different 'risk' profiles? So one can decide to trade the relative safety of eliminating the interest payment for the volatility and reasonable expectation of long term returns in the market. They should consider how this fits their overall AA.
Let me ask you this: If you feel this way, do you advocate absolutely zero investment in anything until the mortgage is paid off? It seems anything else is hypocritical, unless you can get zero-risk investment at above your mortgage rate (not likely). That would leave a lot of people out of the market for a long time. Heck, I guess you are saying they should even forego a company match on a 401K, because even with a 50% match, well, stocks can drop that much - there is no guarantee. If you want Apples-to-Apples, isn't that it?
-ERD50
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We are talking about retired people not people working and contributing to 401k.
8 secrets for success from early retirees - Andrea Coombes' Working Retirement - MarketWatch
If I was retired I would not want mortgage unless it beast CD rates just like Wes Moss writes in his book. But yes if you are working max out 401k first.
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08-01-2014, 02:08 PM
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#68
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Chicago
Posts: 1,154
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Quote:
Originally Posted by pb4uski
+1 I refinanced at 3.375% in early 2012 just before I retired (but after I stopped working - I was "on vacation"). Since then my portfolio has averaged a 14.7% annual return so I'm ahead 11.3% a year. Since I retired my portfolio has increased more than my entire mortgage and that is after withdrawals for living expenses.
I realize that living in retirement with a mortgage is not for everyone and that's fine, but so far it has worked out great for me. My comfort is I could write a check and lay off my mortgage at any time I chose to.
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+2........I also have a 3.375% mortgage at 30 years in 2012. With inflation and effective rate after writeoff this is essentially free money to me. My income sources easily handles this payment and I also could pay off mortgage at any time but I will keep the bank's money...thank you.
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08-01-2014, 02:09 PM
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#69
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,985
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Quote:
Originally Posted by haha
This is almost a universal mental bias- a preference for whatever we already have. I have it also, it is comforting.
Ha
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Exactly. No need to endlessly debate the virtues of a mortgage or other financial paths. To me my home is a I built it, I bought it, I own it and I'm happy. I also use a buckets strategy (shudder) for my investments. In the end, if I'm happy, does it really matter all that much?
__________________
Took SS at 62 and hope I live long enough to regret the decision.
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08-01-2014, 02:22 PM
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#70
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,888
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Quote:
Originally Posted by eta2020
We are talking about retired people not people working and contributing to 401k. ....
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Yes, but the concept is the same in determining alternatives for how the money can be used.
People can do what they want, but it's not a 'slam dunk' that a retired person is better off w/o a mortgage. Assuming adequate liquidity, assuming a good rate on the mortgage, I'd say it is one of the least important decisions for a retiree.
-ERD50
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08-01-2014, 02:47 PM
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#71
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Chicago
Posts: 1,154
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Quote:
Originally Posted by rayvt
I would. In fact, that's how I got the seed money to start serious investing, 20 years ago.
"So for those of us who have paid off houses and good credit (many people here) you recommend us to mortgage out our houses and invest money into equities?"
No. For you (you being someone who is retired with no mortgage) it is too late. The time to start investing is long before you retire, when you have a low mortgage payment that you can pay out of your paycheck. Then you don't have problems about pulling money out of your investments in a bear market to pay the mortgage.
The danger and risk of having a mortgage is being unable to make the monthly payment. If that isn't a problem or risk for you, then yes, have a mortgage AND have equity investments. You can't pull money out of you house and invest it if you can't safely make the payments with money that isn't tied up in the investments.
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Well, a better circumstance which we used after I retired was selling my paid off house and putting down 20% on new one and investing the rest.
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08-01-2014, 03:35 PM
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#72
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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