I was listening to a financial program on the radio today, and the host said that a paid off mortgage has replaced the BMW as a status symbol.
There may be hope for us yet
There may be hope for us yet
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Only so far as it means they can afford a bigger car payment and we're back in a BMW.
DWalt
Member
How about those of us who never had a mortgage? Or a BMW?
I was listening to a financial program on the radio today, and the host said that a paid off mortgage has replaced the BMW as a status symbol.
There may be hope for us yet
That is the advice I give when talking about going on retirement.
I would rather have a paid off mortgage than the repair and maintenance bills a BMW would give you!
bigwheelzip
Absent Comrade
Mortgages aren't a problem as long as they generate positive cash flow.
My mortgage balance is equal to a 15 year old BMW. I don't think I'll swap at this point.
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I think buying anything on credit and paying interest on anything that is not necessary to keep from starving, being warm and dry is throwing money away.
I have always said that if you see me driving a cheap car I may or may not have paid cash because sometimes poor people have to do poor ways but if you see me driving a high priced car you can bet I paid cash. Larry
I have always said that if you see me driving a cheap car I may or may not have paid cash because sometimes poor people have to do poor ways but if you see me driving a high priced car you can bet I paid cash. Larry
I had a large dollar-amount stock sale a few years ago. I mentioned taking some of it and paying off my mortgage to my financial investor. He said, "Why would you take money that will earn 10% to pay off a loan costing you 4%? It's like taking 6% right out of your pocket."
I'm still paying the mortgage, which at this point is primarily principle and escrow.
I'm still paying the mortgage, which at this point is primarily principle and escrow.
sigp220.45
US Veteran
It'll never happen for me. Since college I've lived in California, North Dakota, Guam, Texas, Louisiana, Montana, Idaho, New Mexico, and Colorado. I'll probably move one more time. I did manage to make money on every house except the one I bought in 2008 right before the Great Bubble Burst.
I may make enough on this one to mostly pay for my next one, but probably not.
I may make enough on this one to mostly pay for my next one, but probably not.
LVSteve
Member
Well, there's still a chunk on my mortgage, but my BMW is paid for. Does that count?
In my mind, retirement is about cash flow and having a mortgage payment is usually the largest cash flow commitment people have.
The decision to pay it off or let the money work in the market is generally dictated by a person's tolerance for risk.
My take on it is if you have a good portion of your money in the market eliminating the mortgage liability would allow a retiree a better chance of riding out a market downturn. People tend to forget that one key to retiring is not having to access funds during a downturn.
Building a balanced market portfolio, developing appropriate cash reserves and reducing cash flow obligations are good things to consider when building a retirement plan.
The decision to pay it off or let the money work in the market is generally dictated by a person's tolerance for risk.
My take on it is if you have a good portion of your money in the market eliminating the mortgage liability would allow a retiree a better chance of riding out a market downturn. People tend to forget that one key to retiring is not having to access funds during a downturn.
Building a balanced market portfolio, developing appropriate cash reserves and reducing cash flow obligations are good things to consider when building a retirement plan.
DWalt
Member
Forget about mortgage payments (I don't have those). My principal problem is the expense of property taxes, insurance, utilities, and maintenance.
LVSteve
Member
we paid our mortgage off years ago... it gave me peace of mind not piece of mind... it was a great part of our life taken care of... allowed me to "involuntarily retire" without consequences almost 3 years ago.. and for those that are told "oh invest instead".. you are told that by someone getting a percentage of that and who doesn't pay the taxes on income or that has to suffer any of the losses... good luck...
EDIT: I have never wanted a BMW.. my tastes go a different direction...
EDIT: I have never wanted a BMW.. my tastes go a different direction...
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GypsmJim
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We saved up for a down payment before we got married. It wasn't the Taj Mahal but a little fixing up it was all we needed. Three years later we paid off the mortgage and only then started a family. For the next one we stretched a little bit and built our dream house, but only after a few promotions. The 30 year mortgage was paid off in 11 years.
With no monthly payments we were able to live well and save a lot at the same time. Having no debt is not a status symbol, it's simply the smart thing to do. Maybe people are finally figuring that out.
With no monthly payments we were able to live well and save a lot at the same time. Having no debt is not a status symbol, it's simply the smart thing to do. Maybe people are finally figuring that out.
It is a wonderful feeling to be debt free. I think when we are young, and working, a mortgage is the only way most people can afford to buy that first house. But when we stop working, and our income declines, to have that mortgage and any other debt paid off is key to retiring in comfort.
Thats me, I only pay the goverment or eat my losses as I do my own thing. Win or loose its up to me. As I have said many times its good to have a cast iron stomach if you play the market. I'm basically a long time holder and kinda stay with so called widows and orphan stocks and REITs for most of my activities. Have not jumped out a window.
Been doing it for a few years before the Exxon Valdez went reef clawing!
GypsmJim
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My son decided that at age 19 he should be out on his own. The apartment rent took most of his salary. He found a nice little house and with my loan of $2000 for a down payment he had his own home with a mortgage payment that was LESS than renting. He now lives in a Million Dollar mansion, but that's just an example of what hard work can provide.
NOT owning a house is simply not good financial planning, unless there are other extenuating circumstances.
Having no mortgage for the last 25 years of my working career allowed me to invest wisely. I'm not a stock kinda person, so guaranteed investments were a priority. Now, I will admit that being cautious has not provided as big a profit that I could have made, but my annuities and other guaranteed cash flow accounts have given me a retirement income that has exceeded my working salary.
Doing the opposite of what many financial planner experts say might just be the way to go. It worked for me.
I like the way you have taken the path that is right for you. My only thought is there seems to be a mis-conception that a financial planner will just push you into stocks and the market or high-risk investments.
Any financial advisor worth their salt will understand 2 key items;
#1 clients' goals,
#2 the clients' risk tolerance
Once they understand those 2 key items, they can build a plan.
If they aren't asking those questions you need to find another advisor.
