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wwotd and why

Old 12-06-2018, 11:32 PM
  #21  
KarlK
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sell the dump and shack up with KSpaz or FPD
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Old 12-06-2018, 11:33 PM
  #22  
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Originally Posted by K-Spaz View Post
I hope you're going to make me feel good here and tell me that I was not instrumental in providing that cash.
not at all, it was a done deal previous just had to wait for the previous owner to vacate. long story but it took them a while.
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Old 12-06-2018, 11:34 PM
  #23  
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The only issue is risk. You have more risk with a loan than without, granted though that in your case the risk is marginal. If your investments are bringing in more than the mortgage rate then there is that. Calculate how much interest you'd lose by paying the mortgage, then see how quickly investing the mortgage payment recovers the 'lost' interest. Say it's 10 years, average out what you are earning now and project it 10 years in the future, take a look at your balances then. Obviously nothing is going to stay static, but that is about all you can do.
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Old 12-06-2018, 11:34 PM
  #24  
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Originally Posted by KarlK View Post
sell the dump and shack up with KSpaz or FPD
both are too far away from my current reality, and one of them would require an appointment every day which I cannot handle. bonus, im not a fan of cats.
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Old 12-06-2018, 11:35 PM
  #25  
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Old 12-06-2018, 11:36 PM
  #26  
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Originally Posted by flange View Post
both are too far away from my current reality, and one of them would require an appointment every day which I cannot handle. bonus, im not a fan of cats.
it's all about the box wine and KSpaz massages
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Old 12-06-2018, 11:37 PM
  #27  
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Originally Posted by flange View Post
both are too far away from my current reality, and one of them would require an appointment every day which I cannot handle. bonus, im not a fan of cats.
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Old 12-07-2018, 04:58 AM
  #28  
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Originally Posted by dvarapala View Post
If you can invest that money and earn > 3.25% then pay it off.

/thread


Other way around. If he can make, for example, 8% return investing then he should invest and leave the mortgage alone.

Originally Posted by ratflinger
The only issue is risk. You have more risk with a loan than without
Risk of paying off the loan is that it's a poor use of available funds, assuming he has options that will give him better than 3.25% return.

Risk of keeping the loan is mostly on the bank, although if this guy isn't BSing us about his finances then there's basically zero risk.

IMO he'd be crazy to pay it off.
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Old 12-07-2018, 05:33 AM
  #29  
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Pay it off.
Why?
Bragging Rights
and..
Because you can...
No need for Mr Drysdale unless his Miss Jane is doing your nephew or some other sordid activities....
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Old 12-07-2018, 07:11 AM
  #30  
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Dump the debt.
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Old 12-07-2018, 08:34 AM
  #31  
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I'm not sure this is a serious thread, so I'll withhold my sage advice.
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Old 12-07-2018, 09:28 AM
  #32  
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Originally Posted by PKguitar View Post
I'm not sure this is a serious thread, so I'll withhold my sage advice.
That's only acceptable if you supply some sort of catty, sarcastic remark in its place.
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Old 12-07-2018, 09:55 AM
  #33  
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Originally Posted by PKguitar View Post
I'm not sure this is a serious thread, so I'll withhold my sage advice.
its semi-serious. I have ample cash reserves and if I do it would be paying it off using my end of year bonus money, not anything out of the bank. I am already paying off another note on my beach house which was a significant home equity line which I took at purchase five years ago due to the low rate and my ability to pay it down. I wanted to keep the 30 year note at 750k. I sometimes utilize my cash reserves for large business purchases in lieu of using my commercial line of credit and pay me interest instead of the bank, so the 2% paid by them is not the whole story of earnings. I the bank pays me a shade over 1000 per month in interest and charges me 400 on the mortgage balance.

Edit: I have discussed this with two of my financial advisors and both say keep the debt. My accountant who does all pf my business and personal stuff also says it doesn't really matter, as write off is down to nothing at this point.

Last edited by flange; 12-07-2018 at 09:57 AM.
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Old 12-07-2018, 09:56 AM
  #34  
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You can justify keeping the 3.25% loan because:

1. You can subtract a couple of percent for inflation;
2. If you also get an interest tax deduction - then the cost of the loan is nearly zero.
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Old 12-07-2018, 10:00 AM
  #35  
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I guess what I would do is click on this thread and then go try and find one with more pictures in it......
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Old 12-07-2018, 10:17 AM
  #36  
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Old 12-07-2018, 10:18 AM
  #37  
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Originally Posted by Yaupon View Post
You can justify keeping the 3.25% loan because:

1. You can subtract a couple of percent for inflation;
2. If you also get an interest tax deduction - then the cost of the loan is nearly zero.
by the sounds of things, he does get an interest tax deduction but that interest is actually income at the same time. So he's getting the 1099 for that which he doesn't have to pay FICA or any 941, no PA state income tax and no local tax. No unemployment comp. That's a 21% swing right there. So then he also gets to deduct it as an expense and that helps again, though it's diminishing returns.

At the end of every year I have to play a similar shell game but with about 1 % as much money. If I was receiving a paycheck as an employee a lot of these take things don't apply. But when you are self-employed, there's not such simple answers to these things cuz it can get complicated.

If this was something like a car loan that's entirely different. The cost to get one of those is 0. But when you're talking about a mortgage, the cost to replace it for him is going to be $20,000 or so. Well you have to factor that in if you're trying to determine the best future path. That's why I'm saying if he's going to buy something else in the near future and he actually needed or wanted to get another mortgage, they're going to bend him over something terrible in mortgage fees that he can avoid right now by not paying this off. At a cost that's probably about nothing.
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Old 12-07-2018, 10:22 AM
  #38  
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That's a kick-*** looking doc right there.
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Old 12-07-2018, 10:23 AM
  #39  
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Originally Posted by NDMIKE88 View Post
Dump the debt.
But it's not debt if you can make the payments.
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Old 12-07-2018, 10:28 AM
  #40  
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Ive had no mortgage for 8 years and there is nothing like the great feeling and freedom of having no mortgage. If at all possible I would never ever have a lienholder on any of my my property again.
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