What I meant, Galen, by paying the most you can on a morgage was what you spelled out. I didn't mean making your life miserable with a morgage you can barely afford. Rascal did say it was worth it to scrimp while they paid off their place in 8 years!
Triple AAA is good for when you can't afford surprises. If you can handle the rare towing bill than you don't need it. I used to drive older cars and planned on so much a year for expenses. You make some really good points. Some of us are willing to spend money so we don't have surprises to pay for.
It is true that a person should have money for emergencies, however, everyone has their own risk tolerance. And with that in mind, Triple AAA can put a person's mind at ease as well as having a cell phone for emergenices.
I cut cable and also changed my cell phone to just an hour. I do have cable internet. It helps me download stuff from the websites associated with my college text books.
I'm taking personal finance now and it is amazing how most people know more about their CD collection than they do their car insurance.
If I can digress back to the thread for a minute, here's a website for all the "Black Friday" sales items.
Black Friday is the day after Thanksgiving, called black because it is traditionally the first day of the year that a retail store goes into the black, profitwise. The sale prices shown on the website are *only* good on that day. Be prepared to show up early and wait in line.
Dunno Galen, no house payments after 8 years verses a 30 yr mortgage ... sure money was tight....but by adding only 50 dollars a month to our payment, it paid a 15 yr loan in 8.
It made a lot of sense....For our family, that simply meant no fast food or movies when the kids were little....now with no mortgage, we have the money to pay cash for the big toys n extras....
If you pay down that principle quickly, you save tens of thousands of dollars on a mortgage , and eliminate many may years of payments....
I saw what paying extra on a morgage did. My first husband bought a place through FHA in 1981. He started making a lot more money and started paying more on it. When our son was six weeks old he made his last house payment. He bought a $35,000 house in a little over 6 years! I can be really budget minded. It's easier when I'm not living a hectic life. The vaccum seal food storing gadget sounds like a great investment!
One thing that I am doing this year to save money is get some company to help pay for your recreation:
I am "program sponsored" with the good folks at Pro Kennex Racquetball :D-->. I get my racquetball clothing and equipment directly from them at a very good price. In return, I only use there equipment and wear there clothes when playing racquetball. I signed a 1 year contract to do this.
This has been one of the most practical things we have ever done for our kids. They both live in another state- drive older cars-- and do not always have the cash (nor the inclination) to keep them in tip top shape. I think they have AAA on their speed dial....!!
And--- daughter is sometimes a space cadet--- keys get locked in car/trunk quite often! It just helps MY peace of mind.
Good point, Steve! I'll have to check into that. It is worth it to people who habitually lock themselves out of their cars, though. LOL! Possibly, but the highway patrol will do the same thing and they don't charge.
Rascal, you only paid $50 extra per/mo. and paid off in 8 years! WOW! That sounds incredible. I was told if I paid $2000 extra per yr. for 5 yrs., I could pay off our 15 yrs. loan in 10 yrs. Hum. Something doesn't sound right? Please pt me and tell me how you did that, if you have time. Thanks.
With today's mortgage interest rates, you are INSANE to pay off your mortgage early.
That's right, I said insane.
Instead, take that money that you would be using to pay it down and invest it instead.
If your mortgage interest rate is 6%, and your investment pays you 6%, you break even. I know, this is a bit oversimplified, but you get the point.
If you make any more than a 6% return, you are making money.
Smatter of fact, many very wealthy people *gasp!* take out mortgages on homes that are already paid off so that they can do that very thing.
So you "save thousands by paying off early". Yeah, right. But you miss out on MORE thousands that you might have earned.
If you are in a home that's paid off, you are sitting on a lot of capital that could be working for you.
So DON'T pay off those mortgages - instead, refinance to the best rate you can get, and for the longest time period you can get (30 years is best), and put that money to work for you. Shewt, if you can handle managing rental properties, use your idle capital for more real estate, and build more wealth faster!
Sounds reasonable, Steve! but I'll just be happy to have my mortgage paid off and setting pretty at age 62 and start traveling and having a bit a fun wid tha money we will then have in our pockets from NOT having a mortgage paymt.
Be carefull with the rental property rout....Man we had three, and it was a non stop nightmare.....either we had tennants that trashed the place, requiring much money and time to repair....or we had folks that knew the system ....in alabama, it takes almost 6 months to evict someone by the time you go through the legal manuverings.....in the meantime...any payments were coming out of our pockets.....
Then there was the nice tennant who`s son was diagnosed with a deadly ailment...she lost her job spending her days at the hospitals trying to save her boy.....How are ya gonna throw out a lady like that???
Anyway, we were usually paying those payments ourselves on the rentals....three houses and it was killing us....plus the weeks of work...and tons of money that it would take to restore them to livable condition after drug dealers trashed em.
You cannot always identify bad tennants either....we had a sweet little old lady with nothing on her records rent one of our houses......only to never set foot in it....she turned it over to four teenaged sons for their party pad.....omg, and we had no legal recourse whatsoever.....neighbors called us from the first night telling us of the drug activity and constant police presence needed...they were furious ...and I don`t blame em....but there wasn`t a THING we could do.
Steve, we may very well be nuts but we have a house and no mortgage.....My husband has lost a staggering amount of money on investments....I say, no thanks....I will keep my piece of paid for realstate...this I cannot lose.... not to the vagaries of the markets.....nor if something were to happen to Mark and he were unable to work....
As far as the extra 50 a month...it was on a 15 year note....We put an extra thousand or two in at the beginning....Mark showed me that with each payment only a few dollars were going to the loan...everything else was going to pay the interest.....the earlier you pay down your principle, the sooner you are actually paying on what you borrowed, rather than just interest.
In the early years, Mark would put every extra cent on the mortgage....I would get so mad, because we lived on such a tight budget....one christmas, he had a couple of thousand dollars extra, n I thought...GREAT, we can really buy the kids some gifts this years...(most years all I could afford was piddly stuff that I ahd managed to pick up at yard sales throughout the year)not to mention family members.....I was apoplectic when he wanted to put it on the mortgage.....untill, he whipped out his calculator and showed that if we put that 2000 down now....what it would do to the principle....it would take a couple of years off of the payments.....I agreed...and it was a meager christmas.....but guess what? the kids didn`t know it....n now that the house is paid for and they are older...though we still have to hunt for the bargains......but because we are carefull, we can afford to do the things that we like and have the means to get what we want....great stuff....dirtbikes n go carts...horses etc....without going into debt...... they don`t remember the lean years.
Buy half price Christmas stock after Christmas...and even pick up some gifts and stocking stuffers for the following Christmas...put them away...you'll save a bundle and avoid the shopping mobs...ugh!
"Dunno Galen, no house payments after 8 years verses a 30 yr mortgage ... sure money was tight....but by adding only 50 dollars a month to our payment, it paid a 15 yr loan in 8."
Yes it does work great.
"It made a lot of sense....For our family, that simply meant no fast food or movies when the kids were little....now with no mortgage, we have the money to pay cash for the big toys n extras...."
We alway pay as much as we can each month onto the principle. We just dont make down payments.
"If you pay down that principle quickly, you save tens of thousands of dollars on a mortgage , and eliminate many may years of payments...."
That is right. Now consider how much effect each dollar is having when paid against the outstanding principle, in terms of cuting down the back end of the mortgage. You make out with every dollar paid onto the principle.
"With today's mortgage interest rates, you are INSANE to pay off your mortgage early."
I make 16% on the money I put onto my mortgage's principle. Which is difficult to equal in any other form of investment.
That money is also a portion of our tax shelter, sheltering us from paying income taxes. When money first comes in to our pockets [from rental income] it would ordinarily be taxable, except of course when it is spent in the course of conducting business. In this case, I would rather spend the money gaining equity [while sheltering my other incomes from taxes].
"That's right, I said insane."
I would disagree.
Do you have an investment that is currently paying 16%?
Do you pay any form of income tax?
"If your mortgage interest rate is 6%"
Actually ours was recently refinanced at 3.5%
By paying extra money onto the principle, we have built our equity a great deal over the past few years. A few months ago, I refinanced and pocketed extra money which is mine tax-free. I just used it to purchase another property. 44 acres and a home. All from rental income.
I understand a little better, thanks Galen, that makes good sense.
I talked with Mark, I was mistaken, it was about 75 dollars extra he put on the payment...anyway, he paid down the principle quickly, so that we didn`t have to pay so much on interest...
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reikilady
What I meant, Galen, by paying the most you can on a morgage was what you spelled out. I didn't mean making your life miserable with a morgage you can barely afford. Rascal did say it was worth it to scrimp while they paid off their place in 8 years!
Triple AAA is good for when you can't afford surprises. If you can handle the rare towing bill than you don't need it. I used to drive older cars and planned on so much a year for expenses. You make some really good points. Some of us are willing to spend money so we don't have surprises to pay for.
It is true that a person should have money for emergencies, however, everyone has their own risk tolerance. And with that in mind, Triple AAA can put a person's mind at ease as well as having a cell phone for emergenices.
I cut cable and also changed my cell phone to just an hour. I do have cable internet. It helps me download stuff from the websites associated with my college text books.
I'm taking personal finance now and it is amazing how most people know more about their CD collection than they do their car insurance.
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Jim
If I can digress back to the thread for a minute, here's a website for all the "Black Friday" sales items.
Black Friday is the day after Thanksgiving, called black because it is traditionally the first day of the year that a retail store goes into the black, profitwise. The sale prices shown on the website are *only* good on that day. Be prepared to show up early and wait in line.
Good luck.
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dmiller
I usually am getting to bed, about the time these folks are getting in line!
:D-->
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rascal
Dunno Galen, no house payments after 8 years verses a 30 yr mortgage ... sure money was tight....but by adding only 50 dollars a month to our payment, it paid a 15 yr loan in 8.
It made a lot of sense....For our family, that simply meant no fast food or movies when the kids were little....now with no mortgage, we have the money to pay cash for the big toys n extras....
If you pay down that principle quickly, you save tens of thousands of dollars on a mortgage , and eliminate many may years of payments....
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reikilady
I saw what paying extra on a morgage did. My first husband bought a place through FHA in 1981. He started making a lot more money and started paying more on it. When our son was six weeks old he made his last house payment. He bought a $35,000 house in a little over 6 years! I can be really budget minded. It's easier when I'm not living a hectic life. The vaccum seal food storing gadget sounds like a great investment!
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Zshot
One thing that I am doing this year to save money is get some company to help pay for your recreation:
I am "program sponsored" with the good folks at Pro Kennex Racquetball
:D-->. I get my racquetball clothing and equipment directly from them at a very good price. In return, I only use there equipment and wear there clothes when playing racquetball. I signed a 1 year contract to do this.
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2life
Someone mentioned AAA!
This has been one of the most practical things we have ever done for our kids. They both live in another state- drive older cars-- and do not always have the cash (nor the inclination) to keep them in tip top shape. I think they have AAA on their speed dial....!!
And--- daughter is sometimes a space cadet--- keys get locked in car/trunk quite often! It just helps MY peace of mind.
Also -- another way to save on hotel prices!!
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Steve!
As far as AAA -
Many auto insurance companies offer towing and rental reimbursement coverage for less than the cost of AAA. Does AAA even offer rental reimbursement?
I've used the towing coverage only once, and then RR a couple of times. Was it worth it? Probably not, not in my situation.
But it is a viable alternative.
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waterbuffalo
Good point, Steve! I'll have to check into that. It is worth it to people who habitually lock themselves out of their cars, though. LOL! Possibly, but the highway patrol will do the same thing and they don't charge.
Rascal, you only paid $50 extra per/mo. and paid off in 8 years! WOW! That sounds incredible. I was told if I paid $2000 extra per yr. for 5 yrs., I could pay off our 15 yrs. loan in 10 yrs. Hum. Something doesn't sound right? Please pt me and tell me how you did that, if you have time. Thanks.
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2life
THIS is my problem..........
hummmm ... I am either saving money-- or spending it foolishly........
This morning... US air International E Savers... CLT to Amsterdam....$249 r/t
CLT to Paris........$279 r/t
CLT to London......$259 r/t
My heart is pounding-- hands are shaking.... Is this an addiction........?
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Steve!
Okay, listen good.
With today's mortgage interest rates, you are INSANE to pay off your mortgage early.
That's right, I said insane.
Instead, take that money that you would be using to pay it down and invest it instead.
If your mortgage interest rate is 6%, and your investment pays you 6%, you break even. I know, this is a bit oversimplified, but you get the point.
If you make any more than a 6% return, you are making money.
Smatter of fact, many very wealthy people *gasp!* take out mortgages on homes that are already paid off so that they can do that very thing.
So you "save thousands by paying off early". Yeah, right. But you miss out on MORE thousands that you might have earned.
If you are in a home that's paid off, you are sitting on a lot of capital that could be working for you.
So DON'T pay off those mortgages - instead, refinance to the best rate you can get, and for the longest time period you can get (30 years is best), and put that money to work for you. Shewt, if you can handle managing rental properties, use your idle capital for more real estate, and build more wealth faster!
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waterbuffalo
Sounds reasonable, Steve! but I'll just be happy to have my mortgage paid off and setting pretty at age 62 and start traveling and having a bit a fun wid tha money we will then have in our pockets from NOT having a mortgage paymt.
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rascal
Be carefull with the rental property rout....Man we had three, and it was a non stop nightmare.....either we had tennants that trashed the place, requiring much money and time to repair....or we had folks that knew the system ....in alabama, it takes almost 6 months to evict someone by the time you go through the legal manuverings.....in the meantime...any payments were coming out of our pockets.....
Then there was the nice tennant who`s son was diagnosed with a deadly ailment...she lost her job spending her days at the hospitals trying to save her boy.....How are ya gonna throw out a lady like that???
Anyway, we were usually paying those payments ourselves on the rentals....three houses and it was killing us....plus the weeks of work...and tons of money that it would take to restore them to livable condition after drug dealers trashed em.
You cannot always identify bad tennants either....we had a sweet little old lady with nothing on her records rent one of our houses......only to never set foot in it....she turned it over to four teenaged sons for their party pad.....omg, and we had no legal recourse whatsoever.....neighbors called us from the first night telling us of the drug activity and constant police presence needed...they were furious ...and I don`t blame em....but there wasn`t a THING we could do.
Steve, we may very well be nuts but we have a house and no mortgage.....My husband has lost a staggering amount of money on investments....I say, no thanks....I will keep my piece of paid for realstate...this I cannot lose.... not to the vagaries of the markets.....nor if something were to happen to Mark and he were unable to work....
As far as the extra 50 a month...it was on a 15 year note....We put an extra thousand or two in at the beginning....Mark showed me that with each payment only a few dollars were going to the loan...everything else was going to pay the interest.....the earlier you pay down your principle, the sooner you are actually paying on what you borrowed, rather than just interest.
In the early years, Mark would put every extra cent on the mortgage....I would get so mad, because we lived on such a tight budget....one christmas, he had a couple of thousand dollars extra, n I thought...GREAT, we can really buy the kids some gifts this years...(most years all I could afford was piddly stuff that I ahd managed to pick up at yard sales throughout the year)not to mention family members.....I was apoplectic when he wanted to put it on the mortgage.....untill, he whipped out his calculator and showed that if we put that 2000 down now....what it would do to the principle....it would take a couple of years off of the payments.....I agreed...and it was a meager christmas.....but guess what? the kids didn`t know it....n now that the house is paid for and they are older...though we still have to hunt for the bargains......but because we are carefull, we can afford to do the things that we like and have the means to get what we want....great stuff....dirtbikes n go carts...horses etc....without going into debt...... they don`t remember the lean years.
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Wacky Funster
Buy half price Christmas stock after Christmas...and even pick up some gifts and stocking stuffers for the following Christmas...put them away...you'll save a bundle and avoid the shopping mobs...ugh!
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Galen
rascal:
"Dunno Galen, no house payments after 8 years verses a 30 yr mortgage ... sure money was tight....but by adding only 50 dollars a month to our payment, it paid a 15 yr loan in 8."
Yes it does work great.
"It made a lot of sense....For our family, that simply meant no fast food or movies when the kids were little....now with no mortgage, we have the money to pay cash for the big toys n extras...."
We alway pay as much as we can each month onto the principle. We just dont make down payments.
"If you pay down that principle quickly, you save tens of thousands of dollars on a mortgage , and eliminate many may years of payments...."
That is right. Now consider how much effect each dollar is having when paid against the outstanding principle, in terms of cuting down the back end of the mortgage. You make out with every dollar paid onto the principle.
:=)
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Galen
Steve!:
"With today's mortgage interest rates, you are INSANE to pay off your mortgage early."
I make 16% on the money I put onto my mortgage's principle. Which is difficult to equal in any other form of investment.
That money is also a portion of our tax shelter, sheltering us from paying income taxes. When money first comes in to our pockets [from rental income] it would ordinarily be taxable, except of course when it is spent in the course of conducting business. In this case, I would rather spend the money gaining equity [while sheltering my other incomes from taxes].
"That's right, I said insane."
I would disagree.
Do you have an investment that is currently paying 16%?
Do you pay any form of income tax?
"If your mortgage interest rate is 6%"
Actually ours was recently refinanced at 3.5%
By paying extra money onto the principle, we have built our equity a great deal over the past few years. A few months ago, I refinanced and pocketed extra money which is mine tax-free. I just used it to purchase another property. 44 acres and a home. All from rental income.
Insane? I dont think so.
:-)
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rascal
I understand a little better, thanks Galen, that makes good sense.
I talked with Mark, I was mistaken, it was about 75 dollars extra he put on the payment...anyway, he paid down the principle quickly, so that we didn`t have to pay so much on interest...
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fortunateone
Shop online
Insure what you buy but get enough so you get free shipping.
Use sites like
BIZRATE.COM
and
Froggle.com
There are other shopping by price engines.
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