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Key:
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Joined: Jul 2011
Posts: 37,679
Freak of Nature
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Freak of Nature
Joined: Jul 2011
Posts: 37,679 |
I'm one that has ALWAYS said to pay off debt as fast as you could, BUT what kind of interest could you get on your money if you put it into an interest bearing account right now? You might get as much interest on your money, as the rate is on the loans you have. If so, then keep your money and let it make money. Fur, it's hard to argue against the debt vs interest numbers you mentioned but, in my opinion it's a lot easier to amass wealth when you have no debt period. I know in our case we made it a point to get the house paid off ASAP but, also at the same time we never carried auto, cc or any other debit, if we couldn't pay for it, we didn't buy it. For the record never heard of Dave Ramsey until we were 100% free but, we did a lot of his teaches. I've never understood the fascination with Dave Ramsey . It's just common $ sense. Yup. but people are generally stupid when it comes to money. I don't know how many times I heard people say that its a good thing to have a little debt. I come from a long line of tight wads , I guess it's in my DNA. I have family members who make Dave Ramsey look like a rookie when it comes to being tight with $. I'm a big fan of getting paid interest instead of paying interest.
"Why do you ask"?
Always vote the slowest path to socialism.
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Joined: Jul 2010
Posts: 9,854
14 point
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14 point
Joined: Jul 2010
Posts: 9,854 |
If you owe less than $100k TOTAL I would say you are not really in bad shape. You are in good shape.
Think on some extreme level you can obsess with debt until you are both debt free AND broke.
Right now is not the time to discuss retirement savings but I do see a lot of people who think paying off their home early is the key to financial success. It is NOT when you are doing this at the expense of saving for retirement.
You can't start saving for retirement at 50 years old. And you also need to be thinking along the lines of if I anticipated I would need $1million for retirement.... you are going to need $2 million by the time Biden is out of office.
That's my advice. I'd hold tight. Having $60k saved is nothing to get hyperactive about.
No government employees were harmed in the making of this mess.
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Joined: Jun 2014
Posts: 4,760
10 point
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10 point
Joined: Jun 2014
Posts: 4,760 |
Nothing like sleeping in a paid off house.
Killing my neighbors deer since 1982
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Joined: Dec 2013
Posts: 22,924 Likes: 3
a.k.a. Dingle Johnson
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a.k.a. Dingle Johnson
Joined: Dec 2013
Posts: 22,924 Likes: 3 |
Mortgage interest is deductible. Auto loan interest is not. The home appreciates (most of the time) but vehicles historically do not. I would pay the vehicle off fitst If he only owes $54k, then the mortgage interest is no enough to itemize. So that argument is moot. Pay the house off first. Keep the rest of the money in the bank as a cash reserve. Pay $1000 (Plus that month's interest) on the truck every month and pay the truck off in 22 months. Meanwhile bank the extra money in a high interest savings account. Some are paying over 4% right now. I less than 2 years you will be debt free and have a nice chunk of liquid cash in the bank.
Last edited by Irishguy; 03/24/23 08:11 PM.
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Joined: Jul 2011
Posts: 37,679
Freak of Nature
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Freak of Nature
Joined: Jul 2011
Posts: 37,679 |
If you owe less than $100k TOTAL I would say you are not really in bad shape. You are in good shape.
Think on some extreme level you can obsess with debt until you are both debt free AND broke.
Right now is not the time to discuss retirement savings but I do see a lot of people who think paying off their home early is the key to financial success. It is NOT when you are doing this at the expense of saving for retirement.
You can't start saving for retirement at 50 years old. And you also need to be thinking along the lines of if I anticipated I would need $1million for retirement.... you are going to need $2 million by the time Biden is out of office.
That's my advice. I'd hold tight. Having $60k saved is nothing to get hyperactive about.
The OP is way ahead, he said he maxes out his Roth, has another IRA , a investment account and some $ from a former biz. Sounds like he's pretty solid at this point.
"Why do you ask"?
Always vote the slowest path to socialism.
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Joined: Dec 2012
Posts: 16,401
Old Mossy Horns
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Old Mossy Horns
Joined: Dec 2012
Posts: 16,401 |
The correct answer is buy a boat and go fishing
We will burn that bridge when we get there
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Joined: Apr 2003
Posts: 3,749
10 point
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10 point
Joined: Apr 2003
Posts: 3,749 |
Truck first- then apply that payment to the house until you have enough cash to pay it off.
"We aren't here to justify your feelings and give you self worth" - Aldeer Welcome Center
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Joined: Oct 2013
Posts: 3,882
10 point
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10 point
Joined: Oct 2013
Posts: 3,882 |
The correct answer is buy a boat and go fishing But need to finance the boat to insure your credit remains good. 🤷🏿
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Joined: Jul 2020
Posts: 8,855
14 point
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14 point
Joined: Jul 2020
Posts: 8,855 |
The correct answer is buy a boat and go fishing But need to finance the boat to insure your credit remains good. 🤷🏿 This is really the sad state of affairs. You could pay all your mess off, and pay cash for everything, and then apply for a loan only to find out you have a mediocre credit score. The guy at the lot I bought my truck from told me your credit will go up with a truck note. He was right. I got from no note for YEARS!! to a note, and boom, higher credit score. It's bassackwards if you ask me. Another option would be to buy stocks that consistently pay dividends. Then just let it reinvest them. When you retire, you have an income stream there too.
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Joined: Nov 2015
Posts: 21,456
Freak of Nature
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Freak of Nature
Joined: Nov 2015
Posts: 21,456 |
Aldeer is slippin. Hookers and blow
Isaiah 5:20 Woe to those who call evil good and good evil, who put darkness for light and light for darkness, who put bitter for sweet and sweet for bitter.
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Joined: Aug 2006
Posts: 9,561
14 point
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14 point
Joined: Aug 2006
Posts: 9,561 |
The correct answer is buy a boat and go fishing But need to finance the boat to insure your credit remains good. 🤷🏿 This is really the sad state of affairs. You could pay all your mess off, and pay cash for everything, and then apply for a loan only to find out you have a mediocre credit score. The guy at the lot I bought my truck from told me your credit will go up with a truck note. He was right. I got from no note for YEARS!! to a note, and boom, higher credit score. It's bassackwards if you ask me. Another option would be to buy stocks that consistently pay dividends. Then just let it reinvest them. When you retire, you have an income stream there too. I think a super easy way to keep your credit score active is to just use a credit card for fuel and keep it paid off every month. Heck, my in-laws use a credit card for most of their expenses every month and pay it off every month and their score is stellar (and they used to accumulate air miles for travelling at the same time).
If you live to be a hundred, I want to live to be a hundred minus one day, so I never have to live without you.---Winnie the Pooh
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Joined: Jun 2017
Posts: 6,755
The Flippin’ Idiot That Could Care Less
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The Flippin’ Idiot That Could Care Less
Joined: Jun 2017
Posts: 6,755 |
Mortgage payment has tax benefits , truck loans don't if that matters. The tax benefits are a joke brother. You talking about a chump change. I'd pay the house off for sure!
Last edited by Jakethesnake; 03/25/23 11:45 AM.
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Joined: Nov 2013
Posts: 2,976
10 point
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10 point
Joined: Nov 2013
Posts: 2,976 |
The correct answer is buy a boat and go fishing But need to finance the boat to insure your credit remains good. 🤷🏿 This is really the sad state of affairs. You could pay all your mess off, and pay cash for everything, and then apply for a loan only to find out you have a mediocre credit score. The guy at the lot I bought my truck from told me your credit will go up with a truck note. He was right. I got from no note for YEARS!! to a note, and boom, higher credit score. It's bassackwards if you ask me. Another option would be to buy stocks that consistently pay dividends. Then just let it reinvest them. When you retire, you have an income stream there too. You’re missing the point, you pay cash so you don’t get the note which puts you back in debt. Who cares what their credit score is when you pay cash.
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Joined: Feb 2014
Posts: 4,609
10 point
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10 point
Joined: Feb 2014
Posts: 4,609 |
The correct answer is buy a boat and go fishing But need to finance the boat to insure your credit remains good. 🤷🏿 This is really the sad state of affairs. You could pay all your mess off, and pay cash for everything, and then apply for a loan only to find out you have a mediocre credit score. The guy at the lot I bought my truck from told me your credit will go up with a truck note. He was right. I got from no note for YEARS!! to a note, and boom, higher credit score. It's bassackwards if you ask me. Another option would be to buy stocks that consistently pay dividends. Then just let it reinvest them. When you retire, you have an income stream there too. You’re missing the point, you pay cash so you don’t get the note which puts you back in debt. Who cares what their credit score is when you pay cash. ^^^^^^^^^^^^^^^^^[
experience is a freakin' awesome teacher....
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Joined: Jun 2007
Posts: 1,789
8 point
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8 point
Joined: Jun 2007
Posts: 1,789 |
There are multiple ways to make money work for you. Arguing about one being better than another is like telling somebody else what deer they should or shouldn't hunt.
Most folks are driven by emotion and miss the opportunity to have money truly work for them. Fear of not having enough will cause you to miss opportunities. Think "scared money can't play." The other common emotion is Greed and that will cause the focus to be more, more, more and then money owns you.
I prefer to be a cheerful giver than a shrewd investor. In this, the Giver always has and God is always pleased and I never have to worry about where or when it's going to arrive.
O God, you are my God; early will I seek you. Psalm 63:1
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Joined: Nov 2011
Posts: 22,080
Freak of Nature
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Freak of Nature
Joined: Nov 2011
Posts: 22,080 |
Mortgage interest is deductible. Auto loan interest is not. The home appreciates (most of the time) but vehicles historically do not. I would pay the vehicle off fitst That’s not true anymore for basically everyone (now). Even if you don’t have a cent of deductions, the standard deduction is $25k for a couple. Over 90% of people now do not itemize, which means you take the $25k standard. This means all deductions below that amount help you exactly zero. Mortgage deduction is effectively no longer an argument unless you’re pretty wealthy or someone who makes $100k and gives away $30k to the church. If that’s you, good work! And if not, you won’t get any mortgage benefit.
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Joined: Jul 2011
Posts: 37,679
Freak of Nature
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Freak of Nature
Joined: Jul 2011
Posts: 37,679 |
The correct answer is buy a boat and go fishing But need to finance the boat to insure your credit remains good. 🤷🏿 This is really the sad state of affairs. You could pay all your mess off, and pay cash for everything, and then apply for a loan only to find out you have a mediocre credit score. The guy at the lot I bought my truck from told me your credit will go up with a truck note. He was right. I got from no note for YEARS!! to a note, and boom, higher credit score. It's bassackwards if you ask me. Another option would be to buy stocks that consistently pay dividends. Then just let it reinvest them. When you retire, you have an income stream there too. You’re missing the point, you pay cash so you don’t get the note which puts you back in debt. Who cares what their credit score is when you pay cash. I don't know why folks get so hung up on it.
"Why do you ask"?
Always vote the slowest path to socialism.
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Joined: Nov 2020
Posts: 1,381
8 point
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8 point
Joined: Nov 2020
Posts: 1,381 |
Mortgage interest is deductible. Auto loan interest is not. The home appreciates (most of the time) but vehicles historically do not. I would pay the vehicle off fitst That’s not true anymore for basically everyone (now). Even if you don’t have a cent of deductions, the standard deduction is $25k for a couple. Over 90% of people now do not itemize, which means you take the $25k standard. This means all deductions below that amount help you exactly zero. Mortgage deduction is effectively no longer an argument unless you’re pretty wealthy or someone who makes $100k and gives away $30k to the church. If that’s you, good work! And if not, you won’t get any mortgage benefit. This is what I was talking about. The other qualitative benefit of paying off truck first is that it's a quicker win that eliminates a higher interest rate. Quick wins help psychologically when folks set a goal to be debt free. Either way, OP is in good shape.
Professional Smart Alec
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Joined: Jul 2020
Posts: 607
4 point
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4 point
Joined: Jul 2020
Posts: 607 |
A lot of good advice here. If it were me I would really pray for God to reveal to me what I should do. He owns it all anyway and everyone’s situation is going to be different.
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Joined: Nov 2011
Posts: 2,260
8 point
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8 point
Joined: Nov 2011
Posts: 2,260 |
Life happened and I was unable to respond to this thread. But here is what I decided to do.
Pay off the truck
The house has no tax savings for me because we take the standard deduction. I don't have enough taxable expenses to itemize. I saw some comments about the tax benefits for owning a home.
The main reason I am going this route is because I don't want to empty my emergency reserves.
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