gleek
Flak Jacket
Karma: 107 Posts: 9511
 OfflineE chu ta!
 
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What would you do?
« on: November 13, 2008, 09:24:12 PM » |
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Suppose you had enough cashish to payoff your mortgage, would you do so knowing that you can now keep a larger percentage of your take-home pay OR would you continue to pay off the mortgage on a monthly basis and "invest" the money in this currently *feces*ty economic climate?
Consider that if you have a relatively low interest rate on your mortgage to begin with, the effect interest rate (i.e. real rate minus the 30-35% kickback from Uncle Sam) is just about the same as what you'd earn on a 1-year CD. Of course, anything with a shorter maturity, and you'd actually be losing money.
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Woman, open the door, don't let it sting. I wanna breathe that fire again.
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Seamus
Straitjacket
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OfflineI'm a juvenile acting product of the working class
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Re: What would you do?
« Reply #1 on: November 13, 2008, 09:34:07 PM » |
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Suppose you had enough cashish to payoff your mortgage If I had enough hashish to pay off my mortgage I think I'd rather go away to some Island or go deep into the woods and just smoke it until...what...oh my...cashish? Nevermind.  |
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stroh
Sleeveless Hoodie From: Impact Crater Springs, CA
Karma: 155 Posts: 16135
OfflineWe're doomed!
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Re: What would you do?
« Reply #2 on: November 14, 2008, 05:05:37 AM » |
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Good question. I have heard that paying off your mortgage is one of the worst things you can do.
I would take a percentage of the money, pay it down to a payment I like, but continue with a low fixed interest and continue to pay the mortgage. The invest the rest.
Most likely not in the markets, but buy and operate a business.
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Aske
Lederhosen
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Re: What would you do?
« Reply #3 on: November 14, 2008, 06:09:45 AM » |
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Really depends on what you think inflation is over the remaining timeline, what you realistically think you can do with investing the money instead, and how secure you are that you will have steady income over the remaining timeline.
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Russia has invaded a sovereign neighboring state and threatens a democratic government elected by its people. Such an action is unacceptable in the 21st century. -- Chimpy McFlightsuit, CEO of Bu$hco Industries of 'Merka |
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stroh
Sleeveless Hoodie From: Impact Crater Springs, CA
Karma: 155 Posts: 16135
OfflineWe're doomed!
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Re: What would you do?
« Reply #4 on: November 14, 2008, 06:15:23 AM » |
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Say this happened to me four years ago. Here's your chunk. Pay off your house.
Today I would be fuxorred. The value of what I had been given is now cut in more than half.
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Clive
Full Metal Jacket
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Re: What would you do?
« Reply #5 on: November 14, 2008, 07:16:59 AM » |
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We're in the black on our mortgage, and we're lucky to live in a neighborhood and area where housing prices haven't cratered. (Yet?)
So I'd either invest it safely, or I'd pay off the house and then continue to pull a mortgage-payment-equivalent out of take-home and invest that. Probably a split, now that I think about it -- I wouldn't want the house to be an albatross if we had to move suddenly, but you can never have too big an emergency fund.
*fudge*. I'd stuff that cash somewhere safe. If I lost my job, we had to move,and the current house didn't sell briskly, we'd have the money to both put $$$ down on the new house and make payments on the old one until it sold.
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hobbit
Tartan Jacket From: The Shire
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Re: What would you do?
« Reply #6 on: November 14, 2008, 08:02:21 AM » |
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You're probably not going to listen to me, but here it is anyway......
Invest it, and yes - in the market. Given time, you will earn more with the investment than you would save on the interest. Stuffing it into 'safe' investments like CDs, Money Markets etc. - isn't going to get you the same returns. The time for stuffing money in 'safe' places (or mattresses) was a year ago - its too late now folks.
Good investing takes guts. Our emotional investing strategies are to buy when its good and sell when its bad. Well if you think about that for even one second, you will recognize that buying 'high' and selling 'low' is a *fudge*ed up investment strategy. Isn't the point to do the opposite? Without going into too much detail as to why - trust me, if you have the time to let it earn - sound investments in the market (blue chip stocks, quality mutual funds) right now will kick ass in a few years.
Oh - and Warren Buffet says he's investing in the markets again too. Right now. One of the worlds savviest investors is buying US stocks right now. So no matter what you think of me - there ya go.
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I've gone to find myself. If I get back before I return, keep me here.
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Aske
Lederhosen
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Re: What would you do?
« Reply #7 on: November 14, 2008, 08:04:13 AM » |
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Oh - and Warren Buffet says he's investing in the markets again too. Right now. One of the worlds savviest investors is buying US stocks right now. So no matter what you think of me - there ya go.
But which ones? |
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Russia has invaded a sovereign neighboring state and threatens a democratic government elected by its people. Such an action is unacceptable in the 21st century. -- Chimpy McFlightsuit, CEO of Bu$hco Industries of 'Merka |
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stroh
Sleeveless Hoodie From: Impact Crater Springs, CA
Karma: 155 Posts: 16135
OfflineWe're doomed!
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Re: What would you do?
« Reply #8 on: November 14, 2008, 08:08:24 AM » |
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You're probably not going to listen to me, but here it is anyway......
Invest it, and yes - in the market. Given time, you will earn more with the investment than you would save on the interest. Stuffing it into 'safe' investments like CDs, Money Markets etc. - isn't going to get you the same returns. The time for stuffing money in 'safe' places (or mattresses) was a year ago - its too late now folks.
Good investing takes guts. Our emotional investing strategies are to buy when its good and sell when its bad. Well if you think about that for even one second, you will recognize that buying 'high' and selling 'low' is a *fudge*ed up investment strategy. Isn't the point to do the opposite? Without going into too much detail as to why - trust me, if you have the time to let it earn - sound investments in the market (blue chip stocks, quality mutual funds) right now will kick ass in a few years.
Oh - and Warren Buffet says he's investing in the markets again too. Right now. One of the worlds savviest investors is buying US stocks right now. So no matter what you think of me - there ya go.
I don't have an argument with any of that. I wish I had money to sink in the stock market right now. I think it's a great time to buy. My point was simply paying off the house doesn't do much (for me) and to sink it all in stocks doesn't do much for me either. I still have the house payment to make. I would rather look for a way to get that money working for me. |
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hobbit
Tartan Jacket From: The Shire
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Re: What would you do?
« Reply #9 on: November 14, 2008, 08:10:20 AM » |
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Oh - and Warren Buffet says he's investing in the markets again too. Right now. One of the worlds savviest investors is buying US stocks right now. So no matter what you think of me - there ya go.
But which ones? He didn't really say. Guess that's what makes him savvy. Buy American. I am. |
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I've gone to find myself. If I get back before I return, keep me here.
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stroh
Sleeveless Hoodie From: Impact Crater Springs, CA
Karma: 155 Posts: 16135
OfflineWe're doomed!
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Re: What would you do?
« Reply #10 on: November 14, 2008, 08:23:55 AM » |
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Oh - and Warren Buffet says he's investing in the markets again too. Right now. One of the worlds savviest investors is buying US stocks right now. So no matter what you think of me - there ya go.
But which ones? Most likely BioFlim Inc. Which as you know makes this product.It's all about matching what's appropriate for the country in tough times. |
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spacey
Amazing Technicolor Dreamcoat From: Group W Bench
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Re: What would you do?
« Reply #11 on: November 14, 2008, 08:56:09 AM » |
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As I believe in making my money work for me, I'd buy a Ford Econoline van, line the interior with white faux fur, throw a rotating bed in the back, with a disco ball, banging sound system, and install maybe a wet bar. At the very least a small fridge. Then I'd get it painted sparkly purple and throw on a bunch of ground effects and a spoiler. Maybe get some airbrushing done on it too, like a Valkyrie, or maybe just some hot warrior looking chick riding a snake or something, but definitely a chick riding something. Oh, and I'd for sure get some mag wheels, that would be sweet.
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stroh
Sleeveless Hoodie From: Impact Crater Springs, CA
Karma: 155 Posts: 16135
OfflineWe're doomed!
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Re: What would you do?
« Reply #12 on: November 14, 2008, 08:57:20 AM » |
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Aske
Lederhosen
Karma: 120 Posts: 31405
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Re: What would you do?
« Reply #13 on: November 14, 2008, 08:59:07 AM » |
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So Buffet essentially thinks that, if he is buying big companies broadly (who knows if he is) that around 1985-1990 an essential shift in the value and behavior of DJIA (as a leading indicator of overall domestic equity performance)... such that a disjoint in the DJIA for example occurs and a new (log) slope should be present-- that we have truly floored out at around 8000-8500. I wonder who else called this as a floor a while ago?  Now if only I really understood the background on why this fundamental disjoint happened... it's pretty obvious (to me) that it did... at this point. (yes, it's a combination of many things, credit expansion, electronic trading explosion, equity bubbles, new derivative products, expansion in use of derivatives, different FED policies, many others, etc... but how do all these tie/work together... I need to research this more if I can find the time)  If you truly believe there is no disjoint, then the plot says we should floor out around 4000 or so. SELL SELL SELL |
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« Last Edit: November 14, 2008, 09:01:36 AM by Aske »
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Russia has invaded a sovereign neighboring state and threatens a democratic government elected by its people. Such an action is unacceptable in the 21st century. -- Chimpy McFlightsuit, CEO of Bu$hco Industries of 'Merka |
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gleek
Flak Jacket
Karma: 107 Posts: 9511
OfflineE chu ta!
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Re: What would you do?
« Reply #14 on: November 14, 2008, 09:55:33 AM » |
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The problem with the market is there really aren't any bluechips left that trade like bluechips. They're just as volatile as tech stocks right now. What day or even the hour of the day you jump in could mean the difference between making a profit on Day 1 vs. being stuck with the stock for several years just to make your money back.
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Woman, open the door, don't let it sting. I wanna breathe that fire again.
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