Paying off your house

[Seraphim]

Everyone's situation is different. It also depends if you're in the accumulation or withdrawal phase of your financial plan. Plus, which allows you to sleep better at night - a larger portfolio or less debt? We paid ours off. We can always refinance if it becomes more feasible to do so, or initiate a reverse mortgage if the timing and numbers are favorable. We can live off our pensions alone, with the home paid off, and have no need to dip into our investments, although we've been doing so for extensive travel. We also have a 2.25% line of credit as a home equity loan, though that rate will probably start rising in the coming year. Either way, it's what makes you comfortable.

 

[Seraphim]

Investing regularly and diversely in the stock market over time can be wise and a good investment. I've been doing that for many years. It isn't always a good investment though. Even doing it that way can be disastrous if for some reason you need to withdraw your money shortly after one of the big "corrections" we've seen the last few years. You know, when 10 or 15 years worth of gains go down the toilet overnight.

Taking the equity out of your home and dumping it into one or even a few stocks is what I was referring to - and that amounts to gambling IMO. Far FAR more people loose money than make money that way. Just like those who gamble at the track or in Vegas.

And yes, bankruptcy court will allow you to keep the shirt on your back - but not a whole lot else...

Market timing, in the long run, IS a risky tactic. Occasionally, however, opportunities come along. Dollar cost averaging is a more secure way of accumulating long term. An investor has to have an equitable spread of equities, fixed income investments, and available cash to weather market vagaries, and have to have a sense of market value. For people with job security, and who hadn't 'over bought' homes, 2009 was a perfect time to dump cash into equities.

 

[msinc]

My house has been paid off for several years now...one thing I either missed on this thread or nobody commented on is this: Paying off your house is in fact smart and you are fortunate to have done so. Leaving it show no lien in the public land records is...not so smart. There are people out there that live to sue somebody. How do they know who has something to get??? Check the land records.
When I paid off my house the first thing my lawyer suggested was to go to the bank and get a HELOC. Don't use it and it wont cost anything, but the lien will show up in the land records as if you have not paid off your house. I get that it is harder for someone to take something that is titled "Tenants By Entirety" but that don't stop them from trying and costing you a considerable amount of money you don't/shouldn't have to give away. The world is full of sick stupid people...that all need a bullet...but that don't stop them.

 

[ClayCow]

I lost more faster in 1999 in the stock market than I would in a thousand trips to Los Vegas. Don't kid yourself, the stock market is for insiders and those that make the markets, anyone else making money there is just luck.

At least in Vegas the deal is honest, and that is something I cannot and will not say about Wall Street.

My track record is better on wall steeet than vegas. Id love for those to flip around, would be much more fun making money.

 

[Comrad]

Your home is not an investment, it's a place to live.

Equity is sacred and should never be touched.

I'll qualify that, home equity should never be touched. Everyone I know who treated their home equity as a piggy bank are in deep trouble today. Two have gone bankrupt and are in foreclosure and the rest will pay a mortgage or rent until they die and in NJ a mortgage payment or rent including taxes can run easily over 2,000 a month and more. That's most peoples entire SS check.

 

[LostintheOzone]

Market timing, in the long run, IS a risky tactic. Occasionally, however, opportunities come along. Dollar cost averaging is a more secure way of accumulating long term. An investor has to have an equitable spread of equities, fixed income investments, and available cash to weather market vagaries, and have to have a sense of market value. For people with job security, and who hadn't 'over bought' homes, 2009 was a perfect time to dump cash into equities.

I believe someone made the point that holding cash is a loosing proposition. If the market takes a 2000 pt hit next week you can bet that a lot of my cash will be gone in short order. I would have a hard time selling a house in a week. Once in awhile an opportunity comes along and you can't be sitting there wishing you had the cash to take advantage of what is most certainly a good deal. The trick is to be able to recognize a good deal when you see it.

 

[gregintenn]

I believe someone made the point that holding cash is a loosing proposition. If the market takes a 2000 pt hit next week you can bet that a lot of my cash will be gone in short order. I would have a hard time selling a house in a week. Once in awhile an opportunity comes along and you can't be sitting there wishing you had the cash to take advantage of what is most certainly a good deal. The trick is to be able to recognize a good deal when you see it.

What will you do if the stock market takes another 2000 point hit the week after that, and the week after that, etc.?

I'll still have my house, and will still be purchasing mutual funds on a monthly basis. I agree with the dollar cost averaging tactic.

I'm not near smart enough to know what the stock market is going to do short term.

 

[LostintheOzone]

What will you do if the stock market takes another 2000 point hit the week after that, and the week after that, etc.?

I'll still have my house, and will still be purchasing mutual funds on a monthly basis. I agree with the dollar cost averaging tactic.

I'm not near smart enough to know what the stock market is going to do short term.

No one says you have to sell into a down market. As a matter of fact you don't have to sell ever if you don't want to.

I'm not talking about selling the house I live in. I'm talking about a house that I may own as rental property or a second home.


I'm living on market investments right now. I've been in there since 82. I've done better than the 30 average increase would suggest.

I like the old saying "nothing ventured, nothing gained" But that's just me.