Good Debt vs Bad Debt

[Tommy_Dolitte]

Ready...GO!

Your perspective...

http://www.cambridgeadvisors.com/consumer/resources/articles/web/goodbaddebt/

 

[Nords]

Let's not go there again!

We all know how we feel about rent vs own and mortgage vs no debt. The article does nothing but dump high-octane gasoline on the smoldering embers of this eternal reciprocated diatribe.

Having said that, we're about to refinance our mortgage from 6.125% to 5.5. It's the third one (on this house) in four years. It'll cost about $1500 and the payback is less than a year. The money is invested in a small-cap index ETF (S&P 600/Barra Small-cap Value-- IJS). I'll pay the mortgage out of my pension cashflow and we'll be keeping our retirement portfolio withdrawal rate under 4%.

I'll be 74 when it's paid off!

 

[Cut-Throat]

Re: Let's not go there again!

We all know how we feel about rent vs own and mortgage vs no debt.  The article does nothing but dump high-octane gasoline on the smoldering embers of this eternal reciprocated diatribe.

Having said that, we're about to refinance our mortgage from 6.125% to 5.5.  It's the third one (on this house) in four years.  It'll cost about $1500 and the payback is less than a year.  The money is invested in a small-cap index ETF (S&P 600/Barra Small-cap Value-- IJS).  I'll pay the mortgage out of my pension cashflow and we'll be keeping our retirement portfolio withdrawal rate under 4%.

I'll be 74 when it's paid off!

Well,

there is man putting his money where his mouth is!  - I did wimp out and pay off my 5.25% mortgage! - Wabmester and ***** both seem to think we are in for tougher times than that - and that it will be tough to get 5.5%. But, I really do hope you are correct and we all get returns better than this, as I am still 60% in stocks.

I am somewhat in between, in that I am hoping for a 2.5% to 3% real return in stock/bonds over the next 20-30 years, but right now I would wimp out and take a 5.5% return over the short term.

 

[John Galt]

I have no mortgages on anything, and I don't expect
to see 74. Now, this is important. Neither my spouse
nor I plan to be here for very long (it's just our mindset). However, I allow for the possibility that we might be around for a long time.
Our idea is to live like you might die tomorrow but
allow for the scenario that you may live to 100.
Anyway, I know that psychologically I am better off with
no mortgages. 50% of my net worth is in real estate,
all unencumbered. I need to preserve that.

John Galt

 

[farmerEd]

My thoughts?

Over the past 70 years, the stock market has increased an average of 11% per year.


Thats as far as I had to read in the article to know the author has nothing to say of any real significance....

 

[azanon]

My perspective was that its the standard advise we've all heard..... and yes, i agreed with all of it. Was nothing revolutionary though.

 

[cute fuzzy bunny]

Yeah, here's another salient stat for you.

During the course of the past 43 years, I've never dropped dead or fathered a child.

Therefore, I should conceivably last forever, childless.

Oops.

 

[sgeeeee]

Your perspective...

There does not appear to be much value in discussing mortgage and debt on these boards.