I know more than one person that WERE doing very well at this in the 80s. One of them had 35-40 houses and a small apartment complex. All of them lost everything including their personal residence.
I know more than one person that WERE doing very well at this in the 80s. One of them had 35-40 houses and a small apartment complex. All of them lost everything including their personal residence.
I believe you. And where I would be using equity as 90% of my investment principal to get a headstart, the guys I've been talking to could pay off their mortgages many, many times over.
That is your gut talking to you. I would listen.................
I own rental property. I just put one under contract today to sell. It should close in 30 days. I leveraged myself heavily several years ago trying to buy property. But being off on disability for 7 months made me decide to shift gears, get out of debt, then work on a cash basis. Now that I can see the finish line and trying to figure out my next step, the people I was getting advice from are telling me to just leverage again.
Plan A for sure.
Then you can use that $1,000 house payment to help finance your retirement.
If you use plan B,
The interest you earn, you have to pay taxes on it.
The interest you pay, you might get 20% back on your taxes.
It would be very unlikely you could make more money then your
mortgage interest unless you enter a high risk investment,
and we all know how those turn out a lot of the time.
That is why they are called high risk.
And there is no way to describe the feeling when you pay off a loan!
I was crazy (stupid) enough to build a new house, and get a new mortgage.
Then you can use that $1,000 house payment to help finance your retirement.
If you use plan B,
The interest you earn, you have to pay taxes on it.
The interest you pay, you might get 20% back on your taxes.
It would be very unlikely you could make more money then your
mortgage interest unless you enter a high risk investment,
and we all know how those turn out a lot of the time.
That is why they are called high risk.
And there is no way to describe the feeling when you pay off a loan!
I was crazy (stupid) enough to build a new house, and get a new mortgage.
I sleep very well because I don't owe anybody a dime for anything.
A.
I did it last year and glad I did.
I did it last year and glad I did.
Get out of your masters pocket, plan A.
There are a lot of people that are house rich and cash poor. In other words, they focused on paying the house off and not saving money to live on.
I think a balanced approach is best. Do not borrow money on your house to invest. If you do have a low mortgage rate, I would not be making extra principle payments. Some mentioned the crash of 2008. That was only a paper loss unless you sold at the bottom. If you can't handle the cyclical nature of the stock market, don't buy stocks. I would be saving that money and invest to your risk tolerance.
I think a balanced approach is best. Do not borrow money on your house to invest. If you do have a low mortgage rate, I would not be making extra principle payments. Some mentioned the crash of 2008. That was only a paper loss unless you sold at the bottom. If you can't handle the cyclical nature of the stock market, don't buy stocks. I would be saving that money and invest to your risk tolerance.
This is the best post so far. For those who think you can't generate a higher return than 3% on a reasonably safe investment, inflation is going to eat you alive. If you are interest free and sitting on cash making less than 3%, you are losing money.
You should not look at this as an all or nothing approach. Pay your mortgage down to the point where you can easily manage it and finance it for 15 years. You should have at least 20% equity in your home before considering alternate investments. I like rentals because they are forced investments and after the initial investment, someone else going to work every day to invest their money of my behalf every month. Stocks are fine but Real Estate is a good way to diversify. Generally you are protected from inflation as real estate tends to appreciate at a similar rate. I am generating better than a 12% annual return and have been doing so for 8 years now. The crash in 2008 hurt my IRAs and my kids IRAs but it did absolutely nothing to my real estate portfolio.
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