Dave Ramsey is a idiot. I listen long enough to scream and then turn the station. I love how he tells people to sell your car at a loss, then go buy a piece of junk and drive it. How about you keep the car you have, drive it past the point its paid for and every year you drive it after it paid for devides into the cost. I wont even get into his stupid logic about credit cards, all I can say is he is out of touch, use your debit card and when someone empties your accounts, see if you have thousands like Dave Ramsey, before you or the bank catches it and see how many checks bounce. use credit cards, much safer, much easier.
Living beyond your means
- Thread starter Clubber_Lang
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I scratch my head when people wait in line at 11:59 PM at an electronics store just to buy the latest i [censored] electronic toy.
Having to start over after my divorce I have a different perspective to life/money/savings etc.
1. Mr Warren B says to get ahead you HAVE to live below your means.
2. You will always have to fight live one life vs sacrifice something now for better later.
So do you buy that vette now? or wait till ya pay the mortgage off?
1. Mr Warren B says to get ahead you HAVE to live below your means.
2. You will always have to fight live one life vs sacrifice something now for better later.
So do you buy that vette now? or wait till ya pay the mortgage off?
Originally Posted By: Quattro Pete
Originally Posted By: Radman
Although I have pondered this one and have drawn two conclusions;
1 - The teachers do not understand home finances.
Teachers teach what they are taught to teach. So if no one makes an effort to teach them, they will obviously not teach it to the students. Personal finance could be made a lot larger part of the school curriculum, and the teachers could be trained on how to deliver it. Alas, it is not being done. Why?
Quote:
2 - We live in an instant gratification society media driven to market impulse buying.
Yup. The widespread advertising in every possible avenue of our daily lives does not help. Trying to teach people to be financially responsible goes totally against this advertising blitzkrieg.
I'm just going to touch on this a bit. While it's a nice theory to want it taught in our schools - from the beginning of time, fiscal responsibilty has been something taught at home. I attribute this, and 75% of the rest of societies current problems, to a complete fail in parenting in todays society.
Originally Posted By: Radman
Although I have pondered this one and have drawn two conclusions;
1 - The teachers do not understand home finances.
Teachers teach what they are taught to teach. So if no one makes an effort to teach them, they will obviously not teach it to the students. Personal finance could be made a lot larger part of the school curriculum, and the teachers could be trained on how to deliver it. Alas, it is not being done. Why?
Quote:
2 - We live in an instant gratification society media driven to market impulse buying.
Yup. The widespread advertising in every possible avenue of our daily lives does not help. Trying to teach people to be financially responsible goes totally against this advertising blitzkrieg.
I'm just going to touch on this a bit. While it's a nice theory to want it taught in our schools - from the beginning of time, fiscal responsibilty has been something taught at home. I attribute this, and 75% of the rest of societies current problems, to a complete fail in parenting in todays society.
Originally Posted By: KenO
I attribute this, and 75% of the rest of societies current problems, to a complete fail in parenting in todays society.
That's true. So if the parents never learned how to make ends meet, the kids never will either. Sounds like a vicious circle that I was hoping the school could break.
I attribute this, and 75% of the rest of societies current problems, to a complete fail in parenting in todays society.
That's true. So if the parents never learned how to make ends meet, the kids never will either. Sounds like a vicious circle that I was hoping the school could break.
Originally Posted By: Panzerman
Dave Ramsey is a idiot. I listen long enough to scream and then turn the station. I love how he tells people to sell your car at a loss, then go buy a piece of junk and drive it. How about you keep the car you have, drive it past the point its paid for and every year you drive it after it paid for devides into the cost. I wont even get into his stupid logic about credit cards, all I can say is he is out of touch, use your debit card and when someone empties your accounts, see if you have thousands like Dave Ramsey, before you or the bank catches it and see how many checks bounce. use credit cards, much safer, much easier.
Physical cash is safest of all. Nobody steals your card # then.
Dave Ramsey is a idiot. I listen long enough to scream and then turn the station. I love how he tells people to sell your car at a loss, then go buy a piece of junk and drive it. How about you keep the car you have, drive it past the point its paid for and every year you drive it after it paid for devides into the cost. I wont even get into his stupid logic about credit cards, all I can say is he is out of touch, use your debit card and when someone empties your accounts, see if you have thousands like Dave Ramsey, before you or the bank catches it and see how many checks bounce. use credit cards, much safer, much easier.
Physical cash is safest of all. Nobody steals your card # then.
Because of WW2 my immigrant parents never made it past 5th grade in school. They were careful with their money, always saved a little for a rainy day, but never made enough to buy a house when I was a kid so we lived in rented apartments. My 82 yo mother final bought a small super cheap condo that she lives in about 20 years ago and paid it off in 10 years.
I was lucky enough to get a really good education, majoring in Economics and Finance, got a decent job out of school, saved my money like crazy for a down payment and bought my first starter house when I was 25 years old. I am currently on my 7th house (fully paid off). I learned early that doubling and tripling up on mortgage payments will quickly produce a paid off house. There are lots of fancy theories about how people should not pay off mortgage but instead put extra money into leveraged investments, etc. I say pure 100% horse-poop to that. Anyone that claims they can consistently make more than current mortgage interest rate on their personal investments is almost always lying or deceiving themselves. If they could consistently invest at that performance level they would be running a hedge fund for $5-10 mil a year.
Especially if you are a young person, please listen to this advice - Buy a house and some property you can afford as soon as you can and then save like crazy and pay it off in 5-7 years max. It is the greatest feeling in the world when you make that last payment and actually truly own something of value. Then and only then you can start leveraging, synergizing, etc on your way to being a big time investor.
Oh yea and never buy new cars, buy 3 year old nice low mile cars for cash and drive them for 10 years minimum. That is also the ticket to wealth.
I was lucky enough to get a really good education, majoring in Economics and Finance, got a decent job out of school, saved my money like crazy for a down payment and bought my first starter house when I was 25 years old. I am currently on my 7th house (fully paid off). I learned early that doubling and tripling up on mortgage payments will quickly produce a paid off house. There are lots of fancy theories about how people should not pay off mortgage but instead put extra money into leveraged investments, etc. I say pure 100% horse-poop to that. Anyone that claims they can consistently make more than current mortgage interest rate on their personal investments is almost always lying or deceiving themselves. If they could consistently invest at that performance level they would be running a hedge fund for $5-10 mil a year.
Especially if you are a young person, please listen to this advice - Buy a house and some property you can afford as soon as you can and then save like crazy and pay it off in 5-7 years max. It is the greatest feeling in the world when you make that last payment and actually truly own something of value. Then and only then you can start leveraging, synergizing, etc on your way to being a big time investor.
Oh yea and never buy new cars, buy 3 year old nice low mile cars for cash and drive them for 10 years minimum. That is also the ticket to wealth.
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Originally Posted By: Quattro Pete
Originally Posted By: KenO
I attribute this, and 75% of the rest of societies current problems, to a complete fail in parenting in todays society.
That's true. So if the parents never learned how to make ends meet, the kids never will either. Sounds like a vicious circle that I was hoping the school could break.
Our public schools are training grounds for good little sheeple.
Google Common core.
Originally Posted By: KenO
I attribute this, and 75% of the rest of societies current problems, to a complete fail in parenting in todays society.
That's true. So if the parents never learned how to make ends meet, the kids never will either. Sounds like a vicious circle that I was hoping the school could break.
Our public schools are training grounds for good little sheeple.
Google Common core.
Originally Posted By: cashmoney
There are lots of fancy theories about how people should not pay off mortgage but instead put extra money into leveraged investments, etc. I say pure 100% horse-poop to that. Anyone that claims they can consistently make more than current mortgage interest rate on their personal investments is almost always lying or deceiving themselves. If they could consistently invest at that performance level they would be running a hedge fund for $5-10 mil a year.
Your statement baffles me. I read this all the time on here, and yet, when I look at the average returns over 20 year and 30 year periods, I'm hard pressed to find a return less than current mortgage rates of say 4%-4.5% if one just indexes in the S&P and forget about it for 20 or 30 years.
S&P 500 yearly returns since 1928. 10yr. 20yr. and 30yr. geometric means.
Dataset Source:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
There are lots of fancy theories about how people should not pay off mortgage but instead put extra money into leveraged investments, etc. I say pure 100% horse-poop to that. Anyone that claims they can consistently make more than current mortgage interest rate on their personal investments is almost always lying or deceiving themselves. If they could consistently invest at that performance level they would be running a hedge fund for $5-10 mil a year.
Your statement baffles me. I read this all the time on here, and yet, when I look at the average returns over 20 year and 30 year periods, I'm hard pressed to find a return less than current mortgage rates of say 4%-4.5% if one just indexes in the S&P and forget about it for 20 or 30 years.
S&P 500 yearly returns since 1928. 10yr. 20yr. and 30yr. geometric means.
Dataset Source:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
Originally Posted By: cashmoney
Because of WW2 my immigrant parents never made it past 5th grade in school. They were careful with their money, always saved a little for a rainy day, but never made enough to buy a house when I was a kid so we lived in rented apartments. My 82 yo mother final bought a small super cheap condo that she lives in about 20 years ago and paid it off in 10 years.
I was lucky enough to get a really good education, majoring in Economics and Finance, got a decent job out of school, saved my money like crazy for a down payment and bought my first starter house when I was 25 years old. I am currently on my 7th house (fully paid off). I learned early that doubling and tripling up on mortgage payments will quickly produce a paid off house. There are lots of fancy theories about how people should not pay off mortgage but instead put extra money into leveraged investments, etc. I say pure 100% horse-poop to that. Anyone that claims they can consistently make more than current mortgage interest rate on their personal investments is almost always lying or deceiving themselves. If they could consistently invest at that performance level they would be running a hedge fund for $5-10 mil a year.
Especially if you are a young person, please listen to this advice - Buy a house and some property you can afford as soon as you can and then save like crazy and pay it off in 5-7 years max. It is the greatest feeling in the world when you make that last payment and actually truly own something of value. Then and only then you can start leveraging, synergizing, etc on your way to being a big time investor.
Oh yea and never buy new cars, buy 3 year old nice low mile cars for cash and drive them for 10 years minimum. That is also the ticket to wealth.
At current home mortgage rates, this is horrible advice. My mortgage is at 3.5%. I've considered paying more money towards it, but I think I'd rather build my savings account for house #2, and turn this one into a rental property. Then rinse & repeat.
Because of WW2 my immigrant parents never made it past 5th grade in school. They were careful with their money, always saved a little for a rainy day, but never made enough to buy a house when I was a kid so we lived in rented apartments. My 82 yo mother final bought a small super cheap condo that she lives in about 20 years ago and paid it off in 10 years.
I was lucky enough to get a really good education, majoring in Economics and Finance, got a decent job out of school, saved my money like crazy for a down payment and bought my first starter house when I was 25 years old. I am currently on my 7th house (fully paid off). I learned early that doubling and tripling up on mortgage payments will quickly produce a paid off house. There are lots of fancy theories about how people should not pay off mortgage but instead put extra money into leveraged investments, etc. I say pure 100% horse-poop to that. Anyone that claims they can consistently make more than current mortgage interest rate on their personal investments is almost always lying or deceiving themselves. If they could consistently invest at that performance level they would be running a hedge fund for $5-10 mil a year.
Especially if you are a young person, please listen to this advice - Buy a house and some property you can afford as soon as you can and then save like crazy and pay it off in 5-7 years max. It is the greatest feeling in the world when you make that last payment and actually truly own something of value. Then and only then you can start leveraging, synergizing, etc on your way to being a big time investor.
Oh yea and never buy new cars, buy 3 year old nice low mile cars for cash and drive them for 10 years minimum. That is also the ticket to wealth.
At current home mortgage rates, this is horrible advice. My mortgage is at 3.5%. I've considered paying more money towards it, but I think I'd rather build my savings account for house #2, and turn this one into a rental property. Then rinse & repeat.
Do you know how many investors manage to match the results of the S+P average or better on a long term basis? The correct answer is virtually no investors, no matter how supposedly savvy they think they are, match or do better than S+P average - why? Because humans almost always behave in ways that maximize their losses and minimize their profits in the stock and bond markets. And the irony is that the more confident they are in their skills the more often they end up not doing as well. Even when they invest in pure index funds based on broad averages they still screw up most of the time.
By the way I invest heavily in the market on a regular basis and have done so for 35 years - I don't beat the averages but have done OK mostly due to the "magic" of dollar cost averaging and a few lucky guesses. I also am lucky enough to have a very cleared eyed view of how the game is played.
By the way I invest heavily in the market on a regular basis and have done so for 35 years - I don't beat the averages but have done OK mostly due to the "magic" of dollar cost averaging and a few lucky guesses. I also am lucky enough to have a very cleared eyed view of how the game is played.
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Originally Posted By: Panzerman
Dave Ramsey is a idiot. I listen long enough to scream and then turn the station. I love how he tells people to sell your car at a loss, then go buy a piece of junk and drive it. How about you keep the car you have, drive it past the point its paid for and every year you drive it after it paid for devides into the cost. I wont even get into his stupid logic about credit cards, all I can say is he is out of touch, use your debit card and when someone empties your accounts, see if you have thousands like Dave Ramsey, before you or the bank catches it and see how many checks bounce. use credit cards, much safer, much easier.
This is the myth that just refuses to die...my debit card and my credit card have exactly the same protections, period, end of discussion.
Dave Ramsey is a idiot. I listen long enough to scream and then turn the station. I love how he tells people to sell your car at a loss, then go buy a piece of junk and drive it. How about you keep the car you have, drive it past the point its paid for and every year you drive it after it paid for devides into the cost. I wont even get into his stupid logic about credit cards, all I can say is he is out of touch, use your debit card and when someone empties your accounts, see if you have thousands like Dave Ramsey, before you or the bank catches it and see how many checks bounce. use credit cards, much safer, much easier.
This is the myth that just refuses to die...my debit card and my credit card have exactly the same protections, period, end of discussion.
Originally Posted By: KenO
Originally Posted By: cashmoney
Because of WW2 my immigrant parents never made it past 5th grade in school. They were careful with their money, always saved a little for a rainy day, but never made enough to buy a house when I was a kid so we lived in rented apartments. My 82 yo mother final bought a small super cheap condo that she lives in about 20 years ago and paid it off in 10 years.
I was lucky enough to get a really good education, majoring in Economics and Finance, got a decent job out of school, saved my money like crazy for a down payment and bought my first starter house when I was 25 years old. I am currently on my 7th house (fully paid off). I learned early that doubling and tripling up on mortgage payments will quickly produce a paid off house. There are lots of fancy theories about how people should not pay off mortgage but instead put extra money into leveraged investments, etc. I say pure 100% horse-poop to that. Anyone that claims they can consistently make more than current mortgage interest rate on their personal investments is almost always lying or deceiving themselves. If they could consistently invest at that performance level they would be running a hedge fund for $5-10 mil a year.
Especially if you are a young person, please listen to this advice - Buy a house and some property you can afford as soon as you can and then save like crazy and pay it off in 5-7 years max. It is the greatest feeling in the world when you make that last payment and actually truly own something of value. Then and only then you can start leveraging, synergizing, etc on your way to being a big time investor.
Oh yea and never buy new cars, buy 3 year old nice low mile cars for cash and drive them for 10 years minimum. That is also the ticket to wealth.
At current home mortgage rates, this is horrible advice. My mortgage is at 3.5%. I've considered paying more money towards it, but I think I'd rather build my savings account for house #2, and turn this one into a rental property. Then rinse & repeat.
I just dumped my house and wish I'd done it sooner. It's at the point where the property taxes just aren't worth it. I'm in a nice apartment for not much more than what I'd been paying in taxes!
Originally Posted By: cashmoney
Because of WW2 my immigrant parents never made it past 5th grade in school. They were careful with their money, always saved a little for a rainy day, but never made enough to buy a house when I was a kid so we lived in rented apartments. My 82 yo mother final bought a small super cheap condo that she lives in about 20 years ago and paid it off in 10 years.
I was lucky enough to get a really good education, majoring in Economics and Finance, got a decent job out of school, saved my money like crazy for a down payment and bought my first starter house when I was 25 years old. I am currently on my 7th house (fully paid off). I learned early that doubling and tripling up on mortgage payments will quickly produce a paid off house. There are lots of fancy theories about how people should not pay off mortgage but instead put extra money into leveraged investments, etc. I say pure 100% horse-poop to that. Anyone that claims they can consistently make more than current mortgage interest rate on their personal investments is almost always lying or deceiving themselves. If they could consistently invest at that performance level they would be running a hedge fund for $5-10 mil a year.
Especially if you are a young person, please listen to this advice - Buy a house and some property you can afford as soon as you can and then save like crazy and pay it off in 5-7 years max. It is the greatest feeling in the world when you make that last payment and actually truly own something of value. Then and only then you can start leveraging, synergizing, etc on your way to being a big time investor.
Oh yea and never buy new cars, buy 3 year old nice low mile cars for cash and drive them for 10 years minimum. That is also the ticket to wealth.
At current home mortgage rates, this is horrible advice. My mortgage is at 3.5%. I've considered paying more money towards it, but I think I'd rather build my savings account for house #2, and turn this one into a rental property. Then rinse & repeat.
I just dumped my house and wish I'd done it sooner. It's at the point where the property taxes just aren't worth it. I'm in a nice apartment for not much more than what I'd been paying in taxes!
Originally Posted By: Jarlaxle
Originally Posted By: Panzerman
Dave Ramsey is a idiot. I listen long enough to scream and then turn the station. I love how he tells people to sell your car at a loss, then go buy a piece of junk and drive it. How about you keep the car you have, drive it past the point its paid for and every year you drive it after it paid for devides into the cost. I wont even get into his stupid logic about credit cards, all I can say is he is out of touch, use your debit card and when someone empties your accounts, see if you have thousands like Dave Ramsey, before you or the bank catches it and see how many checks bounce. use credit cards, much safer, much easier.
This is the myth that just refuses to die...my debit card and my credit card have exactly the same protections, period, end of discussion.
No they absolutely do not. A credit card has consumer protections built into it because of years of consumer protection regulations governing unsecured consumer signature debt instruments. A debit card is not a debt instrument and has almost no consumer protections built in by law - in fact it has significantly less protections for loss of funds, fraud, or basic implied warrant protections for product purchases madew with credit card. Try getting your money back from a bank if a relative finds your pin number in your desk and empties your account with your debit card. With a credit card as long as you report fraud within 60 days the most you can lose is $50.
Originally Posted By: Panzerman
Dave Ramsey is a idiot. I listen long enough to scream and then turn the station. I love how he tells people to sell your car at a loss, then go buy a piece of junk and drive it. How about you keep the car you have, drive it past the point its paid for and every year you drive it after it paid for devides into the cost. I wont even get into his stupid logic about credit cards, all I can say is he is out of touch, use your debit card and when someone empties your accounts, see if you have thousands like Dave Ramsey, before you or the bank catches it and see how many checks bounce. use credit cards, much safer, much easier.
This is the myth that just refuses to die...my debit card and my credit card have exactly the same protections, period, end of discussion.
No they absolutely do not. A credit card has consumer protections built into it because of years of consumer protection regulations governing unsecured consumer signature debt instruments. A debit card is not a debt instrument and has almost no consumer protections built in by law - in fact it has significantly less protections for loss of funds, fraud, or basic implied warrant protections for product purchases madew with credit card. Try getting your money back from a bank if a relative finds your pin number in your desk and empties your account with your debit card. With a credit card as long as you report fraud within 60 days the most you can lose is $50.
Last edited:
Originally Posted By: Jarlaxle
Originally Posted By: KenO
Originally Posted By: cashmoney
Because of WW2 my immigrant parents never made it past 5th grade in school. They were careful with their money, always saved a little for a rainy day, but never made enough to buy a house when I was a kid so we lived in rented apartments. My 82 yo mother final bought a small super cheap condo that she lives in about 20 years ago and paid it off in 10 years.
I was lucky enough to get a really good education, majoring in Economics and Finance, got a decent job out of school, saved my money like crazy for a down payment and bought my first starter house when I was 25 years old. I am currently on my 7th house (fully paid off). I learned early that doubling and tripling up on mortgage payments will quickly produce a paid off house. There are lots of fancy theories about how people should not pay off mortgage but instead put extra money into leveraged investments, etc. I say pure 100% horse-poop to that. Anyone that claims they can consistently make more than current mortgage interest rate on their personal investments is almost always lying or deceiving themselves. If they could consistently invest at that performance level they would be running a hedge fund for $5-10 mil a year.
Especially if you are a young person, please listen to this advice - Buy a house and some property you can afford as soon as you can and then save like crazy and pay it off in 5-7 years max. It is the greatest feeling in the world when you make that last payment and actually truly own something of value. Then and only then you can start leveraging, synergizing, etc on your way to being a big time investor.
Oh yea and never buy new cars, buy 3 year old nice low mile cars for cash and drive them for 10 years minimum. That is also the ticket to wealth.
At current home mortgage rates, this is horrible advice. My mortgage is at 3.5%. I've considered paying more money towards it, but I think I'd rather build my savings account for house #2, and turn this one into a rental property. Then rinse & repeat.
I just dumped my house and wish I'd done it sooner. It's at the point where the property taxes just aren't worth it. I'm in a nice apartment for not much more than what I'd been paying in taxes!
There are definitely places in this country where property taxes are insane. But I'd relocate before I lived in an apartment. btw - if you think you aren't paying property taxes in an apartment you are deceiving yourself - its built right into your rent and reflects the value of the apartment. It has to work that way, the landlord is running a for profit business not a charity.
Originally Posted By: KenO
Originally Posted By: cashmoney
Because of WW2 my immigrant parents never made it past 5th grade in school. They were careful with their money, always saved a little for a rainy day, but never made enough to buy a house when I was a kid so we lived in rented apartments. My 82 yo mother final bought a small super cheap condo that she lives in about 20 years ago and paid it off in 10 years.
I was lucky enough to get a really good education, majoring in Economics and Finance, got a decent job out of school, saved my money like crazy for a down payment and bought my first starter house when I was 25 years old. I am currently on my 7th house (fully paid off). I learned early that doubling and tripling up on mortgage payments will quickly produce a paid off house. There are lots of fancy theories about how people should not pay off mortgage but instead put extra money into leveraged investments, etc. I say pure 100% horse-poop to that. Anyone that claims they can consistently make more than current mortgage interest rate on their personal investments is almost always lying or deceiving themselves. If they could consistently invest at that performance level they would be running a hedge fund for $5-10 mil a year.
Especially if you are a young person, please listen to this advice - Buy a house and some property you can afford as soon as you can and then save like crazy and pay it off in 5-7 years max. It is the greatest feeling in the world when you make that last payment and actually truly own something of value. Then and only then you can start leveraging, synergizing, etc on your way to being a big time investor.
Oh yea and never buy new cars, buy 3 year old nice low mile cars for cash and drive them for 10 years minimum. That is also the ticket to wealth.
At current home mortgage rates, this is horrible advice. My mortgage is at 3.5%. I've considered paying more money towards it, but I think I'd rather build my savings account for house #2, and turn this one into a rental property. Then rinse & repeat.
I just dumped my house and wish I'd done it sooner. It's at the point where the property taxes just aren't worth it. I'm in a nice apartment for not much more than what I'd been paying in taxes!
There are definitely places in this country where property taxes are insane. But I'd relocate before I lived in an apartment. btw - if you think you aren't paying property taxes in an apartment you are deceiving yourself - its built right into your rent and reflects the value of the apartment. It has to work that way, the landlord is running a for profit business not a charity.
So be disciplined enough to make substantially higher than minimum payments monthly and pay your mortgage off in 5-7 years but don't trust yourself not to touch your investment in an index. I would hope those using this advice would pause to think about the implications if they can truly succeed in the former but not that latter and adjust their actions accordingly.
---
And I have no doubt it's worked for you, I just have no doubt other methods also work, and we differ on what's optimal.
---
And I have no doubt it's worked for you, I just have no doubt other methods also work, and we differ on what's optimal.
I understand life circumstances and all. But with taxes that high consider moving
to a state that wont make you so blue with stratosphere taxes. My 3 br ranch
property taxes are $725 a year. Its an average house.
Originally Posted By: Jarlaxle
Originally Posted By: KenO
Originally Posted By: cashmoney
Because of WW2 my immigrant parents never made it past 5th grade in school. They were careful with their money, always saved a little for a rainy day, but never made enough to buy a house when I was a kid so we lived in rented apartments. My 82 yo mother final bought a small super cheap condo that she lives in about 20 years ago and paid it off in 10 years.
I was lucky enough to get a really good education, majoring in Economics and Finance, got a decent job out of school, saved my money like crazy for a down payment and bought my first starter house when I was 25 years old. I am currently on my 7th house (fully paid off). I learned early that doubling and tripling up on mortgage payments will quickly produce a paid off house. There are lots of fancy theories about how people should not pay off mortgage but instead put extra money into leveraged investments, etc. I say pure 100% horse-poop to that. Anyone that claims they can consistently make more than current mortgage interest rate on their personal investments is almost always lying or deceiving themselves. If they could consistently invest at that performance level they would be running a hedge fund for $5-10 mil a year.
Especially if you are a young person, please listen to this advice - Buy a house and some property you can afford as soon as you can and then save like crazy and pay it off in 5-7 years max. It is the greatest feeling in the world when you make that last payment and actually truly own something of value. Then and only then you can start leveraging, synergizing, etc on your way to being a big time investor.
Oh yea and never buy new cars, buy 3 year old nice low mile cars for cash and drive them for 10 years minimum. That is also the ticket to wealth.
At current home mortgage rates, this is horrible advice. My mortgage is at 3.5%. I've considered paying more money towards it, but I think I'd rather build my savings account for house #2, and turn this one into a rental property. Then rinse & repeat.
I just dumped my house and wish I'd done it sooner. It's at the point where the property taxes just aren't worth it. I'm in a nice apartment for not much more than what I'd been paying in taxes!
to a state that wont make you so blue with stratosphere taxes. My 3 br ranch
property taxes are $725 a year. Its an average house.
Originally Posted By: Jarlaxle
Originally Posted By: KenO
Originally Posted By: cashmoney
Because of WW2 my immigrant parents never made it past 5th grade in school. They were careful with their money, always saved a little for a rainy day, but never made enough to buy a house when I was a kid so we lived in rented apartments. My 82 yo mother final bought a small super cheap condo that she lives in about 20 years ago and paid it off in 10 years.
I was lucky enough to get a really good education, majoring in Economics and Finance, got a decent job out of school, saved my money like crazy for a down payment and bought my first starter house when I was 25 years old. I am currently on my 7th house (fully paid off). I learned early that doubling and tripling up on mortgage payments will quickly produce a paid off house. There are lots of fancy theories about how people should not pay off mortgage but instead put extra money into leveraged investments, etc. I say pure 100% horse-poop to that. Anyone that claims they can consistently make more than current mortgage interest rate on their personal investments is almost always lying or deceiving themselves. If they could consistently invest at that performance level they would be running a hedge fund for $5-10 mil a year.
Especially if you are a young person, please listen to this advice - Buy a house and some property you can afford as soon as you can and then save like crazy and pay it off in 5-7 years max. It is the greatest feeling in the world when you make that last payment and actually truly own something of value. Then and only then you can start leveraging, synergizing, etc on your way to being a big time investor.
Oh yea and never buy new cars, buy 3 year old nice low mile cars for cash and drive them for 10 years minimum. That is also the ticket to wealth.
At current home mortgage rates, this is horrible advice. My mortgage is at 3.5%. I've considered paying more money towards it, but I think I'd rather build my savings account for house #2, and turn this one into a rental property. Then rinse & repeat.
I just dumped my house and wish I'd done it sooner. It's at the point where the property taxes just aren't worth it. I'm in a nice apartment for not much more than what I'd been paying in taxes!
Originally Posted By: 99Saturn
So be disciplined enough to make substantially higher than minimum payments monthly and pay your mortgage off in 5-7 years but don't trust yourself not to touch your investment in an index. I would hope those using this advice would pause to think about the implications if they can truly succeed in the former but not that latter and adjust their actions accordingly.
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And I have no doubt it's worked for you, I just have no doubt other methods also work, and we differ on what's optimal.
If the market tanks, u lose your job and your house ac goes out, would u rather have
a paid off house or a fat mortgage pymt?
So be disciplined enough to make substantially higher than minimum payments monthly and pay your mortgage off in 5-7 years but don't trust yourself not to touch your investment in an index. I would hope those using this advice would pause to think about the implications if they can truly succeed in the former but not that latter and adjust their actions accordingly.
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And I have no doubt it's worked for you, I just have no doubt other methods also work, and we differ on what's optimal.
If the market tanks, u lose your job and your house ac goes out, would u rather have
a paid off house or a fat mortgage pymt?
Originally Posted By: cashmoney
Do you know how many investors manage to match the results of the S+P average or better on a long term basis? The correct answer is virtually no investors, no matter how supposedly savvy they think they are, match or do better than S+P average - why? Because humans almost always behave in ways that maximize their losses and minimize their profits in the stock and bond markets.
This takes this discussion in a different direction a little bit, but it's a great segue to great advice: invest in market index funds. You asked how many investors match the results of the overall market? I do. How is this? All of my investments are in low-cost market index funds. You are absolutely correct that 90% of investors will not make the market. The sure-fire way to make the market is to OWN the market; you can do that with low-cost index funds.
The ironic thing about investing is the people who spend the least amount of time on it (the people who are in index funds) beat the other 90% who live and die by individual equities every day.
Do you know how many investors manage to match the results of the S+P average or better on a long term basis? The correct answer is virtually no investors, no matter how supposedly savvy they think they are, match or do better than S+P average - why? Because humans almost always behave in ways that maximize their losses and minimize their profits in the stock and bond markets.
This takes this discussion in a different direction a little bit, but it's a great segue to great advice: invest in market index funds. You asked how many investors match the results of the overall market? I do. How is this? All of my investments are in low-cost market index funds. You are absolutely correct that 90% of investors will not make the market. The sure-fire way to make the market is to OWN the market; you can do that with low-cost index funds.
The ironic thing about investing is the people who spend the least amount of time on it (the people who are in index funds) beat the other 90% who live and die by individual equities every day.
Originally Posted By: cashmoney
Especially if you are a young person, please listen to this advice - Buy a house and some property you can afford as soon as you can and then save like crazy and pay it off in 5-7 years max. It is the greatest feeling in the world when you make that last payment and actually truly own something of value. Then and only then you can start leveraging, synergizing, etc on your way to being a big time investor.
I would advise keeping separate your personal emotions and financial math. Paying off a mortgage early will make you feel good inside, but someone doing that will usually be far behind someone who makes his base mortgage payment and invests the rest. If you squirrel all your money away into your house, you've lost nearly a decade of compounding in your portfolio. As mortgage rates today are below prevailing market returns by a non-trivial amount, you'll grow more wealth by getting as much money as you can into the market and as early as you can.
Is this more risky than paying off your house first? Of course it is. There is no single "best" advice for everybody. Everyone has their own tolerance to risk and everyone has enough personal life situation variables (age, job, assets, etc) such that a single strategy won't be optimal for everyone.
Especially if you are a young person, please listen to this advice - Buy a house and some property you can afford as soon as you can and then save like crazy and pay it off in 5-7 years max. It is the greatest feeling in the world when you make that last payment and actually truly own something of value. Then and only then you can start leveraging, synergizing, etc on your way to being a big time investor.
I would advise keeping separate your personal emotions and financial math. Paying off a mortgage early will make you feel good inside, but someone doing that will usually be far behind someone who makes his base mortgage payment and invests the rest. If you squirrel all your money away into your house, you've lost nearly a decade of compounding in your portfolio. As mortgage rates today are below prevailing market returns by a non-trivial amount, you'll grow more wealth by getting as much money as you can into the market and as early as you can.
Is this more risky than paying off your house first? Of course it is. There is no single "best" advice for everybody. Everyone has their own tolerance to risk and everyone has enough personal life situation variables (age, job, assets, etc) such that a single strategy won't be optimal for everyone.
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