Lets just say you came into some money, something like 400,000. You pay off all your bills, buy a new car, put a chunk of it in retirement. You have enough to purchase a new house, in full. Would it be better buy the house at once, or get a mortgage, pay interest to the bank, but at the same time, getting interest on the amount left. Assume equal rates you pay to a bank on a mortgage as you would if you left the money in the bank.
Found money disapeers quickly. Pay the taxes due ont he money first, then pay cashf or a home you want to live in forever, haggle on the price, don’t overpay. Pay cash for two reliable new vehicles.
Invest the rest in as many protected accounts as you can 401K for you and your wife (Max $15K each per year) Roth IRA (Max $5K each per year) College savings plans if you have kids.
Invest in total stock market index funds or small cap index funds.
It only would make sense to do the loan if the interest rate on the money in savings were greater than the rate of the loan Loan rate being about 5%, your savings should return 6% or higher. Now if you have a high income and you could deduct the interest expense from your taxes, this would be worth doing the loan, HOWEVER this does not take loan origination costs into consideration or that
The entire mortgage crisis right now is due to people looking at homes as investments and not homes. Being debt free is a great idea if you have the chance to, and if your home is paid off, you really don’t have to work as much, so your income tax bill will be greatly reduced.
Found money disapeers quickly. Pay the taxes due ont he money first, then pay cashf or a home you want to live in forever, haggle on the price, don’t overpay. Pay cash for two reliable new vehicles.
Invest the rest in as many protected accounts as you can 401K for you and your wife (Max $15K each per year) Roth IRA (Max $5K each per year) College savings plans if you have kids.
Invest in total stock market index funds or small cap index funds.
It only would make sense to do the loan if the interest rate on the money in savings were greater than the rate of the loan Loan rate being about 5%, your savings should return 6% or higher. Now if you have a high income and you could deduct the interest expense from your taxes, this would be worth doing the loan, HOWEVER this does not take loan origination costs into consideration or that
The entire mortgage crisis right now is due to people looking at homes as investments and not homes. Being debt free is a great idea if you have the chance to, and if your home is paid off, you really don’t have to work as much, so your income tax bill will be greatly reduced.
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I would not pay for a property (house condo or whatever) in full and in one shot because you never know if there are problems with that property (even if you have it checked by a specialist beforehand)..
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there are pros and cons of paying cash for your house and it was put to me that when it’s paid for noone can take it away, so if you buy one that is priced enough so you don’t spend all yuor money I would do it as I did and the rest invest wherever you like to. keep enough on hand to live good and rest go to a bank and ask for finance person to give you ideas.
Investing in 401′s along with stock market nor a good idea right now, like putting money into a old used car, keep putting in and no return.
many have annunity funds which give you a fixed rate, banker will give you many ideas and go home to think it over before you invest anywhere to give your mind time to clear before doing anything.
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I paid my house off and have have piece of mind
In 1993, Seals waved its white flag and sold all of its financial companies and opted to accept VISA and Credit card for transactions as well as Discover and their store Mastercard. Dean Witter bought the Discover card ( Dean Witter, Discover & Company . ) and later combined with Morgan Stanley in 1997.