Comments on: A Follow-up to the Dave Ramsey Mortgage Post – This is Interesting! http://allfinancialmatters.com/2007/03/08/a-follow-up-to-the-dave-ramsey-mortgage-post-this-is-interesting/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Thu, 24 May 2012 21:32:24 +0000 hourly 1 http://wordpress.org/?v= By: Mike http://allfinancialmatters.com/2007/03/08/a-follow-up-to-the-dave-ramsey-mortgage-post-this-is-interesting/comment-page-2/#comment-457571 Mike Wed, 11 May 2011 15:11:55 +0000 http://allfinancialmatters.com/?p=1642#comment-457571 Forget the math! Use common sense. I am on Step 6, trying to pay off my $86,000 mortgage before age 30. It's putting money I already make toward the debt. If I weren't applying it to the mortgage, I might be spending it. Certainly not saving it with the terrible rates. You can check my progress on my blog, if you are interested. I've got about four years to go! Forget the math! Use common sense.
I am on Step 6, trying to pay off my $86,000 mortgage before age 30.
It’s putting money I already make toward the debt.
If I weren’t applying it to the mortgage, I might be spending it.
Certainly not saving it with the terrible rates.
You can check my progress on my blog, if you are interested.
I’ve got about four years to go!

]]> By: Beentheredonethat http://allfinancialmatters.com/2007/03/08/a-follow-up-to-the-dave-ramsey-mortgage-post-this-is-interesting/comment-page-2/#comment-444244 Beentheredonethat Fri, 02 Jul 2010 14:08:43 +0000 http://allfinancialmatters.com/?p=1642#comment-444244 Interesting read. I paid off my 30 year in 3 years in 08 just before the market tanked and have invested the payment for the past two years. Alot more money in a cheap market. What also is not stated in these calculations are other freedoms. Yes we all want to expand our wealth but we also want to live an enjoyable life. I am comfortable spending money on vacations or whatever I desire, in cash, knowing that if a financial issue arrises I can stop my investing and have the previous mortgage money for use. Mathmatically you might make more money but, for me, I want to have a life while doing it. Having no debt reduces ones stress level, affords you new freedoms and also allows you to "play" the market at the same time. Had I kept my 30 year mortgage I would still be paying it off, reducing the amount invested each month by my mortgage payment, been unable to move when I wanted where I wanted. I rent that house now and pocket the rent, while living overseas and having my rent paid for by my employer. Interesting read. I paid off my 30 year in 3 years in 08 just before the market tanked and have invested the payment for the past two years. Alot more money in a cheap market. What also is not stated in these calculations are other freedoms. Yes we all want to expand our wealth but we also want to live an enjoyable life. I am comfortable spending money on vacations or whatever I desire, in cash, knowing that if a financial issue arrises I can stop my investing and have the previous mortgage money for use. Mathmatically you might make more money but, for me, I want to have a life while doing it. Having no debt reduces ones stress level, affords you new freedoms and also allows you to “play” the market at the same time. Had I kept my 30 year mortgage I would still be paying it off, reducing the amount invested each month by my mortgage payment, been unable to move when I wanted where I wanted. I rent that house now and pocket the rent, while living overseas and having my rent paid for by my employer.

]]> By: FinancialDave http://allfinancialmatters.com/2007/03/08/a-follow-up-to-the-dave-ramsey-mortgage-post-this-is-interesting/comment-page-2/#comment-443711 FinancialDave Wed, 12 May 2010 22:39:48 +0000 http://allfinancialmatters.com/?p=1642#comment-443711 Now "BeyondWeird" has hit the nail on the head - CASH is king, as long as you don't "plop" it down on your home mortgage. It's amazing how much a $29 financial calculator can keep you from making a 1.5 million dollar mistake. Say you have a windfall of $200,000 and you want to pay off that home mortgage, just so you are free of that $1104 mortgage payment (5.25%.) Ok, let's look at what you just lost in income over 30 years -- that $200K would be $3,967,000 @ 10% rate of return. Now what did you gain - $1104 @ 10% for 30 yr. is $2,495,000 -- basically a $1.5 million dollar mistake. Now “BeyondWeird” has hit the nail on the head – CASH is king, as long as you don’t “plop” it down on your home mortgage. It’s amazing how much a $29 financial calculator can keep you from making a 1.5 million dollar mistake. Say you have a windfall of $200,000 and you want to pay off that home mortgage, just so you are free of that $1104 mortgage payment (5.25%.) Ok, let’s look at what you just lost in income over 30 years — that $200K would be $3,967,000 @ 10% rate of return. Now what did you gain – $1104 @ 10% for 30 yr. is $2,495,000 — basically a $1.5 million dollar mistake.

]]> By: BeyondWeird http://allfinancialmatters.com/2007/03/08/a-follow-up-to-the-dave-ramsey-mortgage-post-this-is-interesting/comment-page-2/#comment-441807 BeyondWeird Tue, 26 Jan 2010 02:50:23 +0000 http://allfinancialmatters.com/?p=1642#comment-441807 Okay, So I've got a 15yr mortgage interest rate of 4.375% fixed, & no other debt. I've maxed out my 401k contributions each year, & can't do a Roth due to income level. One "child" is now 25, the other is 18 & 529 College money is set aside. Not bad, so far. I've got about a year or two of emergency fund set aside, and I STILL believe one of the RISKIEST choices I could make is paying off my mortgage early! As has been said earlier, you get no good behavior credits for paying early - in other words if you've paid $1000 per month additional for years, and you're late on your payment next month, or you start missing payments, that extra money you've been paying won't do you a bit of good.... you're still late, you will still eventually be forclosed on, and it won't matter if the mortgage balance is $150,000 or $50,000! Now if you had INVESTED that $1,000 per month in a liquid asset, you could use it to pay the mortgage if you fell on hard times. That extra $1,000 per month would have possibly paid the mortgage payment for YEARS, during which time you would have been able to "float your boat" and move (takes money), or find a new job (takes money). So having LIQUIDITY could mean the difference between being stuck in a depressed market with no money at hand. I work in a volatile industry, and I think I'll stick with my CASH, and my net cost of funds 3% mortgage, after I take my mortgage interest tax deduction... and INVEST wisely instead... IMHO Okay, So I’ve got a 15yr mortgage interest rate of 4.375% fixed, & no other debt. I’ve maxed out my 401k contributions each year, & can’t do a Roth due to income level. One “child” is now 25, the other is 18 & 529 College money is set aside. Not bad, so far.

I’ve got about a year or two of emergency fund set aside, and I STILL believe one of the RISKIEST choices I could make is paying off my mortgage early!

As has been said earlier, you get no good behavior credits for paying early – in other words if you’ve paid $1000 per month additional for years, and you’re late on your payment next month, or you start missing payments, that extra money you’ve been paying won’t do you a bit of good…. you’re still late, you will still eventually be forclosed on, and it won’t matter if the mortgage balance is $150,000 or $50,000! Now if you had INVESTED that $1,000 per month in a liquid asset, you could use it to pay the mortgage if you fell on hard times. That extra $1,000 per month would have possibly paid the mortgage payment for YEARS, during which time you would have been able to “float your boat” and move (takes money), or find a new job (takes money). So having LIQUIDITY could mean the difference between being stuck in a depressed market with no money at hand.

I work in a volatile industry, and I think I’ll stick with my CASH, and my net cost of funds 3% mortgage, after I take my mortgage interest tax deduction… and INVEST wisely instead…
IMHO

]]> By: Deb http://allfinancialmatters.com/2007/03/08/a-follow-up-to-the-dave-ramsey-mortgage-post-this-is-interesting/comment-page-2/#comment-439307 Deb Mon, 14 Sep 2009 02:51:59 +0000 http://allfinancialmatters.com/?p=1642#comment-439307 This example proves that Dave Ramsey KNOWS what he's talking about! In this example the people who paid off mtg early apparently didn't invest their extra cash and were almost even to the person who kept the 30 year mortgage. If the payed off people truly didn't invest the money that's ok, look at all the years they lived in peace, debt free!!! This example proves that Dave Ramsey KNOWS what he’s talking about!

In this example the people who paid off mtg early apparently didn’t invest their extra cash and were almost even to the person who kept the 30 year mortgage.

If the payed off people truly didn’t invest the money that’s ok, look at all the years they lived in peace, debt free!!!

]]> By: Kirk Womack http://allfinancialmatters.com/2007/03/08/a-follow-up-to-the-dave-ramsey-mortgage-post-this-is-interesting/comment-page-2/#comment-424107 Kirk Womack Sat, 06 Jun 2009 02:09:53 +0000 http://allfinancialmatters.com/?p=1642#comment-424107 Two years ago we stopped investing in our 401k and we began paying thousands against the principle on our home. We only have $1,500.00 left to pay and the property is ours and we didn't lose our a$$et$ to the stock market. We don't have to worry about losing our home to the bank. Our money isn't tied up in unstable companies that could fail in a second with no warning. We are debt free and will now be able to live comfortable lives without worry. There's something to be said about that don't you think? If all of your money is placed in the stock market, which most likely it is. You most likely are worried that you'll never get back what you just lost in the latest crisis. I don't have that worry and in 11 years, I will have saved approximately $500,000.00 that I probably would have sank into the stock market and lost. Now that is a $500,000.00 gain in 11 years. Can you beat that? I don't think so... Oh, and did I mention that God was in all of this? That is right! God. If we all would just obey the Lord and keep his word, "owe no man nothing" then we wouldn't be in the situation that were in today. Two years ago we stopped investing in our 401k and we began paying thousands against the principle on our home. We only have $1,500.00 left to pay and the property is ours and we didn't lose our a$$et$ to the stock market. We don't have to worry about losing our home to the bank. Our money isn't tied up in unstable companies that could fail in a second with no warning. We are debt free and will now be able to live comfortable lives without worry. There's something to be said about that don't you think? If all of your money is placed in the stock market, which most likely it is. You most likely are worried that you'll never get back what you just lost in the latest crisis. I don't have that worry and in 11 years, I will have saved approximately $500,000.00 that I probably would have sank into the stock market and lost. Now that is a $500,000.00 gain in 11 years. Can you beat that? I don't think so… Oh, and did I mention that God was in all of this? That is right! God. If we all would just obey the Lord and keep his word, "owe no man nothing" then we wouldn't be in the situation that were in today.

]]> By: john http://allfinancialmatters.com/2007/03/08/a-follow-up-to-the-dave-ramsey-mortgage-post-this-is-interesting/comment-page-2/#comment-404445 john Wed, 25 Feb 2009 16:17:26 +0000 http://allfinancialmatters.com/?p=1642#comment-404445 Too many people here are doing exactly what the first person said not to do. Don't take little chunks, but look at the whole thing. It is advocated by Dave that after you pay off your mortgage you continue to invest that money into the market. Once you have no debt and can invest all your income you will surpass the time that you wasted in those 3 years quickly. As for the guy that thinks that he is going to continue to get 33% - that is where the fantasy is. Too many people here are doing exactly what the first person said not to do. Don’t take little chunks, but look at the whole thing. It is advocated by Dave that after you pay off your mortgage you continue to invest that money into the market. Once you have no debt and can invest all your income you will surpass the time that you wasted in those 3 years quickly. As for the guy that thinks that he is going to continue to get 33% – that is where the fantasy is.

]]> By: Greg http://allfinancialmatters.com/2007/03/08/a-follow-up-to-the-dave-ramsey-mortgage-post-this-is-interesting/comment-page-1/#comment-386248 Greg Mon, 08 Dec 2008 20:33:40 +0000 http://allfinancialmatters.com/?p=1642#comment-386248 Very interesting read. I kind of wish now that I'd been hammering down my mortgage over the last 4 years instead of throwing money at the stock market. But now that the market has tanked so much, a part of me feels like now is not the time to go ultra conservative and throw everything at the mortgage note. Decisions, decisions. Very interesting read. I kind of wish now that I’d been hammering down my mortgage over the last 4 years instead of throwing money at the stock market. But now that the market has tanked so much, a part of me feels like now is not the time to go ultra conservative and throw everything at the mortgage note. Decisions, decisions.

]]> By: JLP http://allfinancialmatters.com/2007/03/08/a-follow-up-to-the-dave-ramsey-mortgage-post-this-is-interesting/comment-page-1/#comment-375592 JLP Sun, 02 Nov 2008 14:05:37 +0000 http://allfinancialmatters.com/?p=1642#comment-375592 Don, Clueless????? Did you READ the post before you left your comment? I do take that into consideration. Maybe you should READ first BEFORE you comment. Don,

Clueless?????

Did you READ the post before you left your comment? I do take that into consideration.

Maybe you should READ first BEFORE you comment.

]]> By: don http://allfinancialmatters.com/2007/03/08/a-follow-up-to-the-dave-ramsey-mortgage-post-this-is-interesting/comment-page-1/#comment-375536 don Sun, 02 Nov 2008 09:14:37 +0000 http://allfinancialmatters.com/?p=1642#comment-375536 Holy cow! this is the most cluless post i have ever seen, the author totally ignores the fact in his equation that if you paid off your house in 4 years you now have 26 more years to invest that payment into mutual funds and stocks, etc. YOU WILL HAVE ALOT MORE MONEY IN THE END...PAY OFF THE MORTGAGE....people who say not to just want your money..how disgusting Holy cow! this is the most cluless post i have ever seen, the author totally ignores the fact in his equation that if you paid off your house in 4 years you now have 26 more years to invest that payment into mutual funds and stocks, etc. YOU WILL HAVE ALOT MORE MONEY IN THE END…PAY OFF THE MORTGAGE….people who say not to just want your money..how disgusting

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