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12-24-2011, 07:17 PM
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#21
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Gone but not forgotten
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 11,447
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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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12-24-2011, 07:27 PM
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#22
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Full time employment: Posting here.
Join Date: Jan 2004
Posts: 851
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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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12-24-2011, 09:09 PM
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#23
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Full time employment: Posting here.
Join Date: Apr 2008
Posts: 702
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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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12-24-2011, 10:33 PM
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#24
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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 Quote:
Originally Posted by farmerEd
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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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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Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."
I don't spend much time here— please send a PM.
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12-25-2011, 07:49 AM
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#25
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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 Nords
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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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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12-25-2011, 08:01 AM
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#26
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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 FreeAtLast
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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Now there it sits with no opportunity to grow.
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12-25-2011, 08:09 AM
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#27
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,022
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Quote:
Originally Posted by ripper1
Now there it sits with no opportunity to grow.
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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. 
__________________
Numbers is hard
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12-25-2011, 08:19 AM
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#28
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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 REWahoo
...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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12-25-2011, 08:57 AM
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#29
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,022
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Quote:
Originally Posted by ripper1
You mean like a house.
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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.
__________________
Numbers is hard
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12-25-2011, 09:33 AM
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#30
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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 REWahoo
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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12-25-2011, 10:39 AM
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#31
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Recycles dryer sheets
Join Date: May 2010
Posts: 254
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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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