When to pay off your
mortgage?
Unless you have a
mortgage that can be paid off within 6 months, you have to consider your
overall financial situation, age and resources to make this decision. Here are
some of the guidelines.
1. For some in or
near retirement, it would take their investment portfolio and retirement money
to pay off their mortgage. If they spent it to pay off the mortgage, they would
NOT have as large a portfolio to grow or provide income. Since some folks are
earning about 9% on their money, they would give up adding to their nest egg.
For instance, if you had $1/2 million in your stock/bond accounts like
Vanguard's Wellesley
Income Fund, you would be adding about $45,000 to your pile each year on
average. If you used $200,000 to pay off the mortgage you would be adding only
$27,000 a year. If the market went to 3%, you would add only 9,000. In
that case, paying a 3-4% mortgage off may be the smarter move since you are earning
less than the mortgage rate.
2. If you have a tax
situation that allows you to take mortgage interest off your taxes, you would
lose that every year if you paid off the mortgage. Some pay less tax with the
mortgage interest deduction every year.
3. If you want to
maintain a good credit rating, paying the mortgage every month like clockwork
helps the rating go up. There is no benefit financially to paying it off except
the peace of mind that you don't owe anyone. Some folks have the dough and can
pay the mortgage off anytime if needed. In fact some have a home equity line in
case of emergencies. They don't like keeping cash earning just 1-2% in a
bank.
4. Some would rather
have the investment earnings now since they will probably live a long time and
don't want to take a reverse mortgage if medical expenses hit later on. They
want to keep assets growing. These are the folks who would never give an
insurer a lump sum in order to receive a fixed income for life. Inflation cuts
the buying power in half in 20 years and they expect to need more income not
less in 20 years.
How much does it cost to assure your child of a $1 million nest egg? It costs only $16,000 if you start their investment account early. Use Warren Buffett’s strategy.
Warren Buffett recommends we need only one account to grow a retirement fund. He beat 5 hedge fund strategies with this one fund. Unfortunately, the investment industry does not let our schools teach high schoolers the Buffett Strategy: One Fund; $200 a month, 8 years; buy and hold. It is called the Miracle of Compounding. If you use a tax-FREE account, the amount is not taxed—now or later. I learned from John Bogle that you give up 63% of your total potential nest egg if you pay someone 2% a year to ‘handle’ your money. Handlers only beat the market over short periods, not over time.
Warren Buffett’s advice: https://www.amazon.com/Give-your-child-leg-manage/dp/1096505355/’
Put your money to
work so you don’t have to.
Accumulate $250,000,
$500,000 even $1,000,000.
Compounding is what
Warren Buffett counts on for success.
“My wealth has come
from a combination of living in America
compound interest.”
How much can your
money earn for you? $1 million
from your $99,000 investment.
Your $250 a month
investment may grow to $1,000,000 or more and it can be tax FREE. That $3,000 a
year for 33 years ($99,000) compounds to $1 million if you put it to work:
Low-cost stock index fund earns 11% per year after fees over time.
Advisor-managed funds earn 3.79%
over time. Compounding does not work as well if your advisor is trading,
market-timing, rebalancing or rotating sectors.
Is your advisor a
‘hybrid’ or RIA or dually registered BD?
It may not matter to
you how your advisor is operating but you will when you have a dispute. How you
pay your advisor may be determined by the products they and their employer are
legally allowed to sell. You may pay a monthly fee, a commission or a
combination of those. A dually
registered advisor is a registered representative with a broker dealer (licensed
with series 7 (stock/bond/packaged products)) who also has a series 65 license
(gives planning advice). Series 65 is also known as an investment advisor
representative and leverages the broker dealers corporate Registered Investment
Advisor (RIA governed by the SEC). A hybrid
advisor has a series 7 and has their own RIA registered with the SEC or state
regulator. RIA assets are held at a custodial firm. Your advisor could act on
their own (discretionary)
or need your permission to buy and sell each item. You give away control of
your assets in a discretionary
account and you usually pay a fee on all assets. This may stop churning
your assets. But do they act
as a legal fiduciary—give you the best deal possible? It is hard to know
without research.
No advisor is perfect: https://www.amazon.com/Best-Robo-Advisor-Ultimate-Automatic-Management/dp/1537111957
**********
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sanctions to let Kremlin buy KY town.
Our most revered marine quit: re: El
Paso
‘Good’
Germans never protested concentration
camps, taking
children from parents, racial
discrimination
TX,
FL receive Fed funds to open ObamaCare to more citizens health care
Trump eliminates
energy-saving light bulb standards: wastes $ millions on electricity
127
military projects shut by Trump taking Congress-approved money for his WALL
SCAMS/SPINS:
Which
drug company exec will pay for Skaggs’ death: only Jail time stops drug
dealers.
‘Drug dealers’
created the
‘Pain Movement’ to sell drugs and get rich: Yet,
no jail time.
Opioid
trials seem to be for the lawyers not the victims: treatments go on for
years!
Soda drinks kill us
slowly: Another
study says cancer, disease, early death from garbage
Before you buy
‘autopilot’ car, check if
you really can let it drive you: marketing hype.
VW
lied about fuel economy: no fine so just cost of business to pay lawyers
and drivers.
Elias Hafen,
Wells-MS caught
stealing $1.6M promised 6% no risk bogus security
Cetera Advisors CO caught
NOT giving clients the best deal: excessive fees/kickbacks
Social Security
number stolen? Act
quickly. Fraud alert to files. Buy monitor service.
Somaderm Gel: multilevel
selling scheme has NO FDA creds: just B.S. afterall.
Foreign exchange
trading as a job? Average
earnings $300 not $ millions
John Thomas, Thomas
Becker caught
sports bet fraud: felons promised 500% returns.
Google YouTube caught
collecting & selling data on kids: Fine, no jail time.
Consumer Financial
Protection Bureau now
shilling for H&R Block high fee card
Supremes’ Citizens
United: US is a buy-representative-democracy: USSR can buy
US!
GOP
fails to ‘insure’ GOP fixed-elections with political trickery.
TX
loosens gun laws: more killings than Wild West ever had! NRA owns US reps.
Jobs
Learn
to communicate the right way: Buffett advice for advancement
Voting
GOP has shifted: White wealthy non-college rising: evangelicals
Who owns your account now?
Our
town or a KKK town? NC is still fighting the Rebel cause of whiteness.
WalmartHealth.com: Booking
healthcare providers
Miracle:
Walmart
out of the handgun business: Hunting rifle only: no
AR ammo WOW
Instead
of banning mass murder guns, some are building schools with curved walls???
"It's
important that we
help each other out. It's better than just sitting there.” anonymous gifts.
“creative
use of the power of the mind” will keep Dorian away from US: Marianne
Williamson
IAN
41 Watchung Plaza,
B242
973.746.2014
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