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Old 12-24-2011, 08:17 PM   #21
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I have known so many young people who inherit a large sum and it is gone in a year so I will give you the same advice I give my daughter .Take a small portion of the inheritance and take a dream trip or buy a larger house then invest the rest . It is the only big sum you will get and it has to last .
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Old 12-24-2011, 08:27 PM   #22
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I've never heard from anyone that regretted having a paid off house. I know I've never regretted paying off mine.
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Old 12-24-2011, 10:09 PM   #23
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I received a large one time cash proceed and the first thing I did was pay off the mortgage. I was 54 at the time and I have never regretted it.

I do agree with others who recommend that you wait a while.
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Old 12-24-2011, 11:33 PM   #24
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I've never heard from anyone that regretted having a paid off house. I know I've never regretted paying off mine.
You have now.

We actually took out a mortgage on our rental property in 2001 to invest it in the stock market. Bought a lot of Berkshire Hathaway.

These days we have a mortgage on our residence (30-year fixed 3.625%) and another mortgage on our rental (30-year fixed 4.625%). We'll pay them off when I'm in my late 70s.
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Old 12-25-2011, 08:49 AM   #25
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You have now.

We actually took out a mortgage on our rental property in 2001 to invest it in the stock market. Bought a lot of Berkshire Hathaway.

These days we have a mortgage on our residence (30-year fixed 3.625%) and another mortgage on our rental (30-year fixed 4.625%). We'll pay them off when I'm in my late 70s.
I'll second that. Sold our home in Illinois and put down minimum in new home in Indiana (30-year fixed 3.99%). Invested the difference. To me it is a wealth builder.
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Old 12-25-2011, 09:01 AM   #26
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I received a large one time cash proceed and the first thing I did was pay off the mortgage. I was 54 at the time and I have never regretted it.

I do agree with others who recommend that you wait a while.
Now there it sits with no opportunity to grow.
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Old 12-25-2011, 09:09 AM   #27
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Now there it sits with no opportunity to grow.
...until you carefully consider how you would like to invest it. Then it's available rather than pissed away gone or invested in something you regret.
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Old 12-25-2011, 09:19 AM   #28
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...until you carefully consider how you would like to invest it. Then it's available rather than pissed away gone or invested in something you regret.
You mean like a house.
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Old 12-25-2011, 09:57 AM   #29
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You mean like a house.
No, that is not what I meant. I was thinking more along the lines of spending it to buy a lifetime subscription to the Fruit of the Month Club.
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Old 12-25-2011, 10:33 AM   #30
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No, that is not what I meant. I was thinking more along the lines of spending it to buy a lifetime subscription to the Fruit of the Month Club.
Now, now, take it easy ole boy. Merry Xmas. I apologize if I offended anybody. Especially someone who has been a stalwart of this community for as long as you have.
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Old 12-25-2011, 11:39 AM   #31
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We are doing something that I have not heard mentioned here as a possibility. We have a mortgage on a rental property at 4.625% that we just refinanced in early 2011. Rather than prepay it, we are taking what we would have used to prepay and putting it into a designated, and separate, corporate bond fund. So far it is earning a bit more than what we would get as guaranteed return from mortgage prepayment. If all goes to plan the balance in the fund will exceed our mortgage balance when we retire. At that point we can decide whether to pay it off or just stay liquid.

On an objective basis I think it is a tough call in our situation to decide whether to prepay or invest. Prepaying the mortgage is risk free but the corporate bond fund carries a little risk. I think this approach is costing us around half a percent after adjusting for risk but in my opinion that's worth it for the liquidity of having the money available if we need it.

So, what you could do is take some of the money, whatever your mortgage balance is, and set it aside in a designated account that is always there to pay off the mortgage if/when you decide to do so. In the meantime it would throw off enough income to pay your mortgage payments. If you take this route though you must be very cognizant of risk. Don't go and throw it in an emerging markets fund. Stick with something like government bonds or similar.
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Old 12-25-2011, 02:31 PM   #32
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We are doing something that I have not heard mentioned here as a possibility.
Oh, it's received some air time over the years...

From the Early Retirement FAQ archives:
(FAQ archive) Should I pay off the mortgage or invest the money?

and my personal favorite:
Covering a mortgage without losing your ass(ets).

and also:
http://the-military-guide.com/2011/1...in-retirement/
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