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Is there an obvious answer on a 15 vs 30 year mortgage, or is it entirely situational? It seems like it's almost a toss-up between the current ~.75% lower on the 15 year but increased flexibility from lower required principal payments on the 30. Without getting into a ton of detail, let's assume payments on the 15 year are ~15% of (gross) income and the 30% year is about 10%.
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Jun 22, 2017 13:41
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AreWeDrunkYet posted:Is there an obvious answer on a 15 vs 30 year mortgage, or is it entirely situational? It seems like it's almost a toss-up between the current ~.75% lower on the 15 year but increased flexibility from lower required principal payments on the 30. Among the crew of consistent very high earners where most of my relevant experience in personal finance arises, the 15 year mortgage is sort of uniformly preferred. I would guess it's highly situational. Whether you're going to acquire a 15 or a 30, though, make sure to put enough down that you aren't paying PMI and make sure you're not buying more house than you could afford on a 15. I think that's a nice rule of thumb.
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Jun 22, 2017 14:10
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AreWeDrunkYet posted:Is there an obvious answer on a 15 vs 30 year mortgage, or is it entirely situational? It seems like it's almost a toss-up between the current ~.75% lower on the 15 year but increased flexibility from lower required principal payments on the 30. I would argue that 30 year is almost always the right choice. You can just pay the higher rate of the 15 year mortgage and pay it off in about the same time. If something comes up, however, you can dramatically lower your payment for however long you choose. You're basically paying a small interest rate premium for the flexibility to pay less on the mortgage if you choose. This obviously becomes less of an issue if you earn a lot or for mortgages that are smaller, but I think the flexibility is worth it. If having a lower mortgage payment frees up more money to go into retirement accounts, that's better in the long run.
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Jun 22, 2017 14:41
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Yea the extra interest on the 30 year is worth paying for the cashflow. It's trivial to make diversified investments that pay out greater than 4.5% over a 15 year time frame, and at that point you're arbitraging someone else's money (the bank) for your own benefit... AND you get cashflow.
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Jun 22, 2017 16:37
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EAT FASTER!!!!!! posted:Among the crew of consistent very high earners where most of my relevant experience in personal finance arises, the 15 year mortgage is sort of uniformly preferred. That's how I think about it too
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Jun 23, 2017 04:09
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EAT FASTER!!!!!! posted:I would guess it's highly situational. Whether you're going to acquire a 15 or a 30, though, make sure to put enough down that you aren't paying PMI and make sure you're not buying more house than you could afford on a 15. I think that's a nice rule of thumb. I actually disagree with this. More is better. If you can do more than 20%, then don't stop there. But especially in expensive markets that can be next to impossible, especially while paying expensive rent. Keep in mind that your mortgage company will require to maintain reserves on top of your down payment in a lot of areas we are talking north of $50K in savings to get into a starter condo, and in an appreciating market the amount you need to save increases at least as fast as your ability to save. It is not necessarily BWM to pay PMI if everything else is in place, you qualify for a conventional mortgage and you are going to be in the house long enough. Personally I avoided PMI by putting 10% down, getting a conventional mortgage at 80% and a second mortgage for the remaining 10%. But PMI isn't the end of the world and you might not even be paying it for that long if you pay extra and if your house appreciates.
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Jun 23, 2017 06:50
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Hadlock posted:Ah drat, ok and $160 for a new alternator, I had forgotten about that part. Yeah new battery, new alternator. We (myself coming from a family of electrical engineers, an a professional auto mechanic) even used a multimeter and pulled each fuse, twice, in order to try and figure out where the 0.9 amp draw was coming from. From all three fuse boxes. There was also a possible failing heater circuit issue which was going to be $70 to replace and at that point I was kind it done with dealing with the car. 100% that was a bad ground, so you did the right thing.
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Jun 23, 2017 14:38
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Zeta Taskforce posted:Personally I avoided PMI by putting 10% down, getting a conventional mortgage at 80% and a second mortgage for the remaining 10%. But PMI isn't the end of the world and you might not even be paying it for that long if you pay extra and if your house appreciates.  I never knew you could do this. Is it common? How exactly does it work out?
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Jun 23, 2017 19:58
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khysanth posted:
I also did this when I bought my first house in 2004, it worked out fine. I paid off the 15% (in my case) loan ASAP and everything was fine.
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Jun 23, 2017 20:17
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khysanth posted:
Its pretty common. Another group who does something similar are folks trying to get into more expensive houses who are trying to avoid paying extra for a jumbo loan. I don't know exactly where the cutoff is now, I think it's still $417,000. But in expensive markets that isn't a great amount of house. People who qualify for more will get the conventional for $417,000 (that is sold to Fannie or Freddie) and finance the rest as a HELOC or second that is held by the bank in portfolio. These people are still putting hundreds of thousands of dollars down but its a good strategy if you are looking in the $650K to maybe a million.
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Jun 25, 2017 02:47
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Ok guys. I need help. I'm trying to think of a way that I can include my wife on our financial situation but not have to make her log in to something like YNAB with my username\pass cause I'm a super nerd and use randomized 30 character passwords. I'm fine moving to something else but what? Only thing I can think of is a spreadsheet.
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Jun 26, 2017 18:55
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Irritated Goat posted:randomized 30 character passwords You don't need to do this. Just come up with something secure that she can remember or sign up for LastPass and rotate. Easiest way to get random and avoid dictionary stuff is to come up with a phrase, and base the password on the first letter of each word with some punctuation thrown in. 3wTgr&adsitcuwap,abtpotfloewwsptI.
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Jun 26, 2017 19:15
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Irritated Goat posted:randomized 30 character passwords. Imwearingayellowtshirt Mywifeisthegreatestlifechoice Iregretnothingmaybe Somerandomwords Are all way easier to get wife involved with than that. YNAB is my one password that I keep *simple* since it is shared with the wife.
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Jun 26, 2017 19:20
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Irritated Goat posted:Ok guys. I need help. Since you are the nerd it is entirely cool if you are the one who does the heavy lifting with spreadsheets, YNAB and whatever method you use to link your accounts together and pay bills. If I recall (looked at posting history) you make more money and she works on the side as a reporter. This does NOT give you more say over the direction of your household. She absolutely should know what is going on and have an equal say what you two spend money on. To what extent is she involved now? Does she have equal access to everything via joint accounts? You might be the tightwad of the couple and when she gets a vote you might find there is more balance between achieving goals and enjoying some of it. You will probably have nicer stuff and cooler experiences.
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Jun 26, 2017 19:49
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Irritated Goat posted:Ok guys. I need help. Do they support 2FA? That's going to be far more secure than any password.
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Jun 26, 2017 19:49
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Zeta Taskforce posted:Since you are the nerd it is entirely cool if you are the one who does the heavy lifting with spreadsheets, YNAB and whatever method you use to link your accounts together and pay bills. If I recall (looked at posting history) you make more money and she works on the side as a reporter. This does NOT give you more say over the direction of your household. She absolutely should know what is going on and have an equal say what you two spend money on.  I'm kind of curious where you get "My wife doesn't get a say and only I have control of the house" from "I'm trying to help my wife get more involved". Either way, she knows the big picture but the monthly\weekly stuff is more what I've been doing. I'd like her to help me with the smaller stuff as I would benefit from a 2nd pair of eyes. porkface posted:You don't need to do this. Just come up with something secure that she can remember or sign up for LastPass and rotate. She's not going to remember that. Trust me. She uses more "normal" passwords. AreWeDrunkYet posted:Do they support 2FA? That's going to be far more secure than any password. If I did it, it'd be on Google Sheets so yeah, 2FA + sharing only with link.
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Jun 26, 2017 20:15
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Irritated Goat posted:
My apologies for misreading your question. The answer clearly is to have a "normal" type padsword that is within normal parameters of complexity. I didnt realize the situation could be fixed that easily
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Jun 26, 2017 22:01
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write the password on a sticky noteand stick it to her computer
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Jun 26, 2017 23:55
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A loved one who can't help you with daily tweeking of your budget because she is unable to deal with a 30 character password is the most first world of first world problems.
Zeta Taskforce fucked around with this message at 07:40 on Jun 27, 2017 |
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Jun 27, 2017 06:15
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You don't actually need a super-secure password, a reasonably secure one is fine. Most hacks are perpetrated by people who hack a big company's database via social engineering, and when that happens, the difference between something reasonably secure (but memorable) and a 500 character randomized string is negligible. There's also the option of "writing it down" - can't download something written on paper and kept in a drawer.
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Jun 27, 2017 18:55
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Hey guys, I'm looking for some pointers. A little bit about myself. So I'm 33 years old and I'm from Switzerland (no, I'm not the owner of a bank), I've been working for 9 years at my current company (Looking to go elsewhere...), and until now I never really cared about finances much but I'm getting older and we are starting talks about having a child, also my parents are newly retired so I've been thinking more and more about handling properly my finances for the futur. I have no debts (yay for free education) and I have saved ~16K CHF on my savings account which I'd like to invest a part of it because at the moment it's sitting on a savings account with a 0.01% interest rate. Ideally I would like to invest for two things, a house (but it's not easy to become owner in Switzerland) and for my retirement. On another special savings account I have ~6K CHF saved, this special account is something specific to Switzerland, basically the money is blocked until I retire but I can deduct this from my taxes. I can also use this money for some specific cases like buying a house. The interest rate on this account is 0.2% My income is ~5K CHF a month. I understand the first thing I should start doing is a budget. I read the OP, but sadly it refers to an archived Let's Share Our Budgets Thread. How would I go about doing a budget? I've never done anything like that. Is it just my annual income vs expenses? Any simple tool recommended? I think my bank offers such a tool, I'll give it a look. After that I'm a bit lost, I tried searching the web for stuff but most of it seem to be specific to the US. I checked with my bank and they have these investments funds where you can place money and they buy stocks, these types of accounts have a ~1% interest rate or something like that. Is this worth considering or should I buy stock myself? Basically what would be the best way for a Swiss person to invest money?
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Jun 28, 2017 13:15
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BarbarianElephant posted:You don't actually need a super-secure password, a reasonably secure one is fine. Most hacks are perpetrated by people who hack a big company's database via social engineering, and when that happens, the difference between something reasonably secure (but memorable) and a 500 character randomized string is negligible. There's also the option of "writing it down" - can't download something written on paper and kept in a drawer. lol no that's how hacks happened 10 years ago, passwords are the last thing we worry about today. If anything your phone number is more important to keep secret nowadays, don't give that out to loving anyone
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Jun 28, 2017 13:59
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Le0 posted:Basically what would be the best way for a Swiss person to invest money? So the answer is massively "it depends." European countries have very different setups for investment and retirement than does the United States. You need to be clear about your goals (if you would like to buy a home you should be "saving" not investing - whereas if your timeline is retiring 30 years from now you probably need to find the most tax-efficient and high return way to invest) and decide the amount you can squirrel away. Unless they're Swiss, nobody is going to know the opportunities for this kind of thing to describe to you. Good luck!
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Jun 28, 2017 16:21
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Le0 posted:How would I go about doing a budget? Take some time to sit down and actually LOOK at what you're spending. Look over a past statement or two and see what your trends are. How much is eating out? How much is fuel? How much are you spending at the grocery store? Look at the your typical income. What is coming in every month for you to spread around to your budget catagories. Take a look at YNAB for software. It's come a long way and is very simple to use. Don't get discouraged either after your first attempt. It'll usually take 3 months or so to get into a groove of what you spend and can expect for each category. Are you married? Be sure to involve your partner. They have equal say in the spending of the money and need to be included as well. It's important that each of you know where your money is planning to go and how much you have available. It really does cut down on those arguments over nothing purchases.
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Jun 28, 2017 16:32
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One of the higher-ups at my employer hinted that they may offer employees a roth 401k option in addition to our non-roth 401k later this year. I'm not sure how I should best take advantage of this. Age: 29 Annual income: $47,315 (hourly) Vanguard Roth IRA: $12,948 non-roth 401k: $47,998 Current contribution rates: - 7% of my income into my non-roth 401k - auto-transfer $30 from my checking account every two weeks to my roth IRA (I know I should be depositing $5500 in one payment every January so I can take advantage of the interest, but I'm currently saving my 12-month emergency fund) I'm trying to figure out what would be the most efficient way for me to take advantage of the roth 401k if it actually becomes available. - Roll over my non-roth 401k into the roth 401k I don't like this idea because I'm in the 25% income tax bracket so I would have to pay $12k either out of my retirement savings or save $12k on my own in addition to continuing to save for retirement. - Treat my roth 401k like my roth IRA: 1) Continue to save 7% in the non-roth 401k 2) Stop my automatic transfer to my roth IRA 3) Start saving in my roth 401k 4) As soon as I get $5500 in the roth 401k, roll it over into the roth IRA so I can take advantage of the automatic paycheck contribution and earn more interest with the already-existing funds in the roth IRA. - Ignore the roth 401k and continue paying into my 401k and my roth IRA. My thinking is that the roth IRA has $12k, and is already starting to earn interest. If I start putting money in the roth 401k, I have to start over from 0. I get that the roth 401k has a higher contribution limit than the roth IRA, but since I make $47k annually, I don't really see myself maxing my IRA contribution limit at this point and I'm wondering if it would be wiser to just pick between investing in my possible roth 401k or my roth IRA. Has anyone else been in this situation before? Should I put this in the retirement thread? I wasn't sure if it was too newbie for that thread. quote:Le0's question about budgeting I don't know anything about Swiss investments, but maybe I can help with your budget question. I saw that you were considering looking at the "Lets share our budgets thread." You might want to keep in mind that a lot of goons live in countries besides Switzerland, so try to focus on budgets for people who live where you do. For example, many American posters will have budgets/long-term goals affected by the fact that they spent most of their youth paying off tens of thousands of dollars in student loan debt. If you base your goals too closely on our goals, there's a possibility you could miss out on opportunities for yourself. There are some universal ideas that will be true no matter where you live (such as saving part of your paycheck, live within your means, etc) but for specific budgeting details I would rely on other consumers who have personal experience with Swiss financial products. For me, the big thing is I look at how much my expenses are month to month. How much do you pay in rent/mortgage/utilities/internet/phone costs month to month? How much do you spend on food? An expense tracker like Mint.com is really simple to set up and super helpful for getting an idea of where your money goes every month. I also think about my regular bills and expenses. Examples of what I write down: - Monthly cellphone bill - Car insurance bill once every six months - I tend to replace my cellphones every 3-5 years. I'm not big on tech so I rarely spend more than $400 on the phone. So I'll write down that I will probably drop $400 in 2020 to replace my phone. Someone who must have the new iphone every year might write down that they will spend $900 every single year. - I live in a city with poor public transportation and I bought my personal vehicle in 2010, so I'll write down that I will probably need to be ready to replace my car within the next 3-5 years and how much I expect that to cost. Or maybe my car will get totaled tomorrow and I'll need to immediately replace it, or maybe my car will last another 10 years, or maybe I'll have a fabulously wealthy estranged great aunt that will surprise me with a brand new car tomorrow. For this exercise, I don't need to predict exactly when I will need a new car or exactly how much the car will cost, but I want to to estimate it so I'll have an idea of expenses that are coming my way. Once you have an idea of what regular expenses are coming up, you can start thinking about how to save for those expenses so you'll be ready for them. If my car insurance is due in six months and it's going to cost $700, I can be prepared to pay that bill if I put away $60 per paycheck. It's a little overwhelming at first, but it's great that you're starting to think about it. Just focus on saving! legsarerequired fucked around with this message at 01:55 on Jun 29, 2017 |
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Jun 29, 2017 00:47
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What balance does Capital One report to credit bureaus? The balance on my statement, or the balance on the day they report (typically 3-5 days after my statement cycle ends). I'm probably going to have to go a little above the recommended credit utilization ratio this month and next month, though not a significant amount (mid to high 30% or so, low 40% at most), but will be able to pay everything off in full in late August/early September. Am I being neurotic by being concerned about going over 30% utilization for a couple of months by the amount I said? boop the snoot fucked around with this message at 02:02 on Jun 29, 2017 |
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Jun 29, 2017 01:41
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TBeats posted:What balance does Capital One report to credit bureaus? The balance on my statement, or the balance on the day they report (typically 3-5 days after my statement cycle ends). Ask Capital One to be sure but credit cards typically report the balance on the cycle date and only update the reported balance once a month. With regard to your credit score being destroyed you probably are being a bit neurotic. 35% isnt much worse than 30%. 25% isnt that much better. But refer to the thread title, even though its not destructive to your credit carrying a balance isnt great.
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Jun 29, 2017 02:37
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legsarerequired posted:
Unless I'm missing something, this isn't an option since you cannot roll a 401k to an IRA unless you leave the job.
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Jun 29, 2017 03:52
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drive me nuts to school posted:Unless I'm missing something, this isn't an option since you cannot roll a 401k to an IRA unless you leave the job. Some plans let you do whats called an in-service roller without leaving the company. Check your 401k plan description to see. edit: That said, I still don't see why you would stop contributing to your roth IRA in order to contribute more to your roth 401k just to roll it over to the roth 401k. Automatic deductions is nice, but you can set that up for the IRA and I'm not following the part about interest. Xenoborg fucked around with this message at 03:58 on Jun 29, 2017 |
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Jun 29, 2017 03:54
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EAT FASTER!!!!!! posted:So the answer is massively "it depends." European countries have very different setups for investment and retirement than does the United States. You need to be clear about your goals (if you would like to buy a home you should be "saving" not investing - whereas if your timeline is retiring 30 years from now you probably need to find the most tax-efficient and high return way to invest) and decide the amount you can squirrel away. Thank you, I will try to find some resources in Switzerland that can provide some advice. The reason I'm thinking more about investing for a home is that in Switzerland you have to provide 20% of the value, if you take into account that houses are very expensive, something like 1MIL CHF for a small house, that means I have to bring 200K CHF. I don't even have 10% of this sum saved up, so if I'm ever able to afford a house it will be when I retire or something. Anyway I'll have to take a look at my expenses etc.. and do a budget to see how much I can save per year. rotaryfun posted:Take some time to sit down and actually LOOK at what you're spending. Look over a past statement or two and see what your trends are. How much is eating out? How much is fuel? How much are you spending at the grocery store? I will take a look at YNAB, I checked my bank budget software and it's quite nice because it automatically categories my withdrawals etc.. and then shows me an overview, I can also directly set a budget inside the app. I'm not married but I've been living with my girlfriend for a few years now, I spoke to her about this and she said "You are going to keep bothering me with this right?" to which I answered "If you ever wish to have a goat farm when we are old you better budget!!". So we will be talking about this together. The thing is currently we both have our separate accounts I pay the rent then she sends me half etc... but we were thinking maybe of opening a shared account. Thank you for your advice, I will check for Switzerland specific budgets.
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Jun 29, 2017 07:39
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Xenoborg posted:edit: That said, I still don't see why you would stop contributing to your roth IRA in order to contribute more to your roth 401k just to roll it over to the roth 401k. Automatic deductions is nice, but you can set that up for the IRA and I'm not following the part about interest. I'm assuming the first sentence was meant to say " That said, I still don't see why you would stop contributing to your roth IRA in order to contribute more to your roth 401k just to roll it over to the roth IRA. " I feel the same way but I wasn't sure if I was missing something. This was what I meant about interest. My roth IRA has roughly $12k in it. Google tells me that roth IRAs can earn interest, like a savings account earns interest. My roth 401k will have $0, and it might have worse rates since it's an employer offered plan. To me, it seems better to continue investing in my roth IRA and my non-roth 401k (which already has $48k) as I have been.
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Jun 29, 2017 10:26
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Le0 posted:So we will be talking about this together. Just based on friends experiences and personal opinion/experience, unless you are married, I would 100% avoid this. Until then... it's YOUR budget and your budget alone. Sure you can split rent and utilities and whatnot, but make them category items in your own personal budget. You do not have access to her money and she does not have access to your money. There is a line there and it's one I would not cross.
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Jun 29, 2017 12:03
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legsarerequired posted:I'm assuming the first sentence was meant to say " That said, I still don't see why you would stop contributing to your roth IRA in order to contribute more to your roth 401k just to roll it over to the roth IRA. " I feel the same way but I wasn't sure if I was missing something. Either account can earn interest if the money is in a money market fund, which is roughly equal to a savings account like you said. However, you would do much better to invest that money in a mix of stock and bond funds. Short term, the amount will go up and down with the markets, but long term (like a retirement account is) you will make much more money in such a setup. See the boogleheads wiki for more information: https://www.bogleheads.org/wiki/Asset_allocation As for which is better IRA or 401k it comes down to what funds are available in your 401k. In most cases an IRA is the better choice, but some companies, mostly extremely large ones, have funds in their 401k that are as good as or better than the best you can buy yourself. As for the split between Traditional and Roth, it comes down to your tax rate now vs the tax rate when you retire. At 47k of income you are likely near the end of the 15% tax bracket. My personal opinion is that your marginal tax rates will probably never be lower than, so Roth is a comparatively better choice right now. You don't want to do 100% roth however since if you did you would have no taxable income at retirement and would be below 15% marginal tax. So maybe shift heavier to Roth now while its in the 15% bracket and shift more to traditional when your income growths past that. Xenoborg fucked around with this message at 13:42 on Jun 29, 2017 |
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Jun 29, 2017 13:34
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legsarerequired posted:- Treat my roth 401k like my roth IRA: Because you're so young, roth is definitely going to be the way to go. You have so much growth potential that you don't want to end up losing a lot of that growth to taxes. I would just stop putting money into your current traditional 401k and start your roth 401k. If you employer has a match, their match will go into the traditional. I've not heard of having the ability to roll out of a 401k unless some life event happens or you are leave the company. But maybe your group has different rules. I would also just leave the funds that are in your traditional there unless you have the cash for the tax hit.
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Jun 29, 2017 13:44
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TBeats posted:What balance does Capital One report to credit bureaus? The balance on my statement, or the balance on the day they report (typically 3-5 days after my statement cycle ends). I believe utilization only factors based on the current amount and doesn't really have a 'history' in calculation, so while it matters that your utilization is 50%, as soon as you pay off the cards and it drops there will be no 'memory' of that spike in your score or general history - it will only matter if you are applying for a loan or having your credit checked during the actual period where the utilization is high. So as long as you aren't actually doing anything creditwise for that period, it will revert back once you have payed off the amounts.
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Jun 29, 2017 13:59
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Zeta Taskforce posted:Ask Capital One to be sure but credit cards typically report the balance on the cycle date and only update the reported balance once a month. Ashcans posted:I believe utilization only factors based on the current amount and doesn't really have a 'history' in calculation, so while it matters that your utilization is 50%, as soon as you pay off the cards and it drops there will be no 'memory' of that spike in your score or general history - it will only matter if you are applying for a loan or having your credit checked during the actual period where the utilization is high. So as long as you aren't actually doing anything creditwise for that period, it will revert back once you have payed off the amounts. Thanks for the responses. I've been really good about paying off my credit cars in full after getting myself completely out of debt in January 2016. So while I may be proud of the wrong thing, I am proud that this is the first time in ~18 months that I've had to carry a balance through a billing cycle. Unfortunately times are just tough for the next couple of months. My credit limit is relatively low (due to being in the process of rebuilding my credit) so it's pretty easy to rack up a high utilization ratio. Thanks again! One more question to satisfy my general curiosity: does credit utilization have a steady impact (like 50% compared to 30% will impact your credit score the same amount 70% would compared to 50%... if that makes sense) or is it an exponential thing (like 70% compared to 50% having a significantly bigger impact than 50% compared to 30%)? If this question doesn't make sense I'll do my best to clarify. boop the snoot fucked around with this message at 14:15 on Jun 29, 2017 |
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Jun 29, 2017 14:13
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Quick question on long term savings/investment/etc. Given the choice, do I put more money in to retirement, or do I over-pay a mortgage? Both my wife and I have 401(k) accounts, but we aren't maxing out our yearly retirement contributions right now (though we are doing 15% each). We're probably even a little behind depending on how you look at it...in absolute dollar figures we're doing pretty well, but we're not going to hit the "2x your salary by 35" milestone that seems to be the current advice. My simplistic projections indicate we'll be on the order of about 1x our combined salary by 35, but our salaries are pretty good so I'm not terribly worried yet. Anyhow, I figure our mortgage is 3.625% fixed, and we're 1 year in to a 30 year mortgage. If we estimate a conservative 5% ROI on our retirement accounts, it seems to me that our money is better put towards retirement rather than the mortgage, since the "interest" earned on the retirement is more than the interest paid on the mortgage. Is that a correct assessment, or am I missing something? The only thing I can see is that the retirement isn't guaranteed, but the mortgage is guaranteed to be there until we pay it off. So there's something to be said about putting the money towards a known debt rather than an unpredictable investment. Another thing for us to consider is we'll be having a kid in a few months, and we want to start putting some money towards college in a 529 account. Same question would apply: are we better off paying down the mortgage, or diverting that cash to investments?
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Jun 29, 2017 16:56
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DaveSauce posted:Quick question on long term savings/investment/etc. Short answer without knowing your individual 401(k) options and personal details: Statistically, the investment is almost certainly better. Especially if you are at an income/tax level that lets you take advantage of the mortgage interest deduction. Your first year will be mostly interest. Obviously, there is an element of risk vs. the mortgage payment, but given the information we have you are much more likely to be better off paying the minimum on your mortgage and investing the difference.
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Jun 29, 2017 17:03
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I would say that if you're already hitting the 15% mark on investing into retirement the rest goes to your mortgage. At that point if you're concerned about where your at retirement wise, you have a whole lot of money to through that way.
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Jun 29, 2017 17:06
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rotaryfun posted:I would say that if you're already hitting the 15% mark on investing into retirement the rest goes to your mortgage. At that point if you're concerned about where your at retirement wise, you have a whole lot of money to through that way. You might be "fine" for retirement at 15%, but dollars invested earlier are worth more and if he is in his first year of a mortgage, then almost all of his payments will be interest. You are very very likely to make more than 3.6% from your investments. Paying the mortgage instead of investing is "fine", but you are going to end up with more money 9 out of 10 times by paying the minimum on the mortgage in his situation.
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Jun 29, 2017 17:09
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