Published: Tuesday, May 7 2013 11:40 a.m. MDT
Anyone that proposes investing your money in today's environment instead of
paying off your mortgage should be sued for malpractice! The markets are so
manipulated and in a bubble it isn't funny. How can the market continue to
go up even when company after company has reported less than expected results
and it continues to get worse? Could it be that the government and the federal
reserve are manipulating the markets to make everything look rosy so that they
can continue their keynsian policies? Can't go on forever folks!
The sad thing is when you pay off your mortgage you still do not own your home.
The government requires property tax payments forever, if you don't they
will take your paid off home. Sorry to be the bearer of bad news.
So many things drive me crazy about this topic. There is still such old school
thinkers like, "But if people pay their mortgages off, he says, they lose
the tax deduction. They lose flexibility." Why should I spend 10k to get
2.5k as a write off? I could donate that amount and get the same deduction.
Also, you don't pay off a mortgage unless you have an emergency fund
because you need liquid money and shouldn't rely on your house to bail you
out of messes. Not having a house payment allows you to invest or save or give
or go on vacations or..... it is in your hands and not the bank's.
This is ridiculous. There is no safe investment today that pays more than what
you're paying in interest on a mortgage. And the tax deduction excuse is
ridiculous - in most cases you're paying far more in interest than
you're saving on taxes. Pay the thing off as soon as you can, and then
you'll have that much more money available each month.
Somebody brought up that the LDS Church advises that it's ok to go into
debt for education, a house, or a car (modestly, at that; it's certainly
not wise to go into debt for a huge home that you really can't afford with
your salary). That being said, it's still generally advised by church
leaders to get out of that debt as soon as possible. Just because they say
it's ok to go into debt for one of those three things doesn't mean the
principle of getting out of debt as soon as possible doesn't apply.
Riverton Cougar...it was me...that someone. Yes...we should always live within
our means. I blame a lot of the housing bubble on the folks that were already
in houses and saw new neighbors moving in and paying high prices and then
decided to re-write their own homes and take out 200K or 75K to go do something
with. That is wrong.However, being in debt is not a sin. Yes,
Interest never sleeps. However, nor does making money on my 401K. So if I can
have a 100% return on my 401K because of an employer match, should I not save
those monies each month instead of paying off a house?How about the
7-12% and 15.8% this year I am making on the 401K? No I am not a stock jock but
I am active.So I state again a HOME is a LIABILITY. Buying a house
is cheaper than renting....so keep re-writing....use the other monies wisely and
do not invest what you can't afford to lose. Some simple advise.
Interesting article and comments coming at an interesting time. We are at a
stage in our lives where we can consider paying off our home mortgage.We have gone both ways, hanging onto our savings or using the money to pay off
our last loan obligation. We were fortunate when the economy tanked a few years
ago. Many here lost 40% of their investments or more. We lost 20% and have
since recovered that and been fortunate to have an increase from there.I agree wholeheartedly. When I was in a situation to counsel people on their
finances, I realized early on what has been stated earlier: your house is not an
investment. It is a place to raise a righteous family, stay out of the weather
and whatever else happens there. There really is no "underwater." If you
can make the payment, you can survive. If you can't, no matter how much
equity is in the house, it won't matter.As for me and my house,
we will follow the prophets and get out of debt. And it wasn't an opinion
from the prophets.
Those who pay off their mortgage learn the meaning of liberty. Debt is bondage.
Debt is working for others. "Those who understand interest collect it;
those who don't, pay it." HJGrant Those who lost half of their
retirement savings in the stock market crash could have done what I did before
the crash; I paid off my mortgage and now have the joy of paying cash for
everything I want to buy: cars, appliances, entertainment, vacations, computers,
toys, etc. Also, it is so nice to be able to help the needy in and out of the
Better off to save money and sell home and live in the woods.
Baddog - Yes it was an opinion from the prophets. It isn't doctrine, I
don't see that question in the temple recommend interview. It is sound
advice, but it is just that - advice. Many temple going mormons don't
follow it, they live far beyond their means. Yet they can still go to the
temple. It depends on your individual situation. The main point of the arcitle,
as I took it, is that you can do it either way and come out ahead. You can also
do it either way and come out behind. If you can make more money with your cash
while only paying a %3 interest rate, maybe it isn't a bad idea.
In theory, investing your money into other investments rather than paying down
your home seems sensible, until you look at the reality that the majority of
middle-income earners do not have the positive net-worth to even begin investing
in more than just their 401(k) or other employer sponsored retirement plan, if
they are even doing that. I work in personal finance and from a real world
standpoint, it is better to pay off your mortgage early than not. When things
go south, like being unable to liquidate your assets, you will at least be able
to keep your home and know it is yours. A home is an investment in lifestyle.
If you can manage to pay off your home early, then you can rent it into an
investment by leasing it. If you get good enough at it, you can use the majority
of that new income to pay off another property and so forth until you have 5
properties (or more) by the time you retire. Passive income can be created by
real estate ownership, but only by disciplined budgeting and willingness to
forego instant gratification in the here and now for greater rewards in the
Mortgage is not a French word for slave. Just to set the record straight,
here's the word's etymology: [Middle English morgage, from Old French
: mort, dead (from Vulgar Latin *mortus, from Latin mortuus, past participle of
mor, to die; see mer- in Indo-European roots) + gage, pledge (of Germanic
origin).]Word History: The great jurist Sir Edward Coke, who lived from
1552 to 1634, has explained why the term mortgage comes from the Old French
words mort, "dead," and gage, "pledge." It seemed to him that it
had to do with the doubtfulness of whether or not the mortgagor will pay the
debt. If the mortgagor does not, then the land pledged to the mortgagee as
security for the debt "is taken from him for ever, and so dead to him upon
condition, &c. And if he doth pay the money, then the pledge is dead as to
A house can be both a home and an asset. In my case we owe just over four years
on a $400,000 house, obviously a big asset for us. My wife and I look at this
as having a big asset, one that we can sell in the future to help finance our
retirement and then live in a downsized house that will cost us much less. We
are looking forward to that final payment but until then we will go with a 2.90%
I thought the prophets were generally referring to non-mortgage/student loans
type of debt like credit card debt (the sort of thing that is often due to poor
money management and carries much higher interest rates).
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