Investing, Stock Market and Retirement Planning Thread

[dodint]

There's something to be said for peace of mind and maximizing cash flow.

[count2infinity]

We're in the mid 3's with our interest rate. And I agree...as far as sheer money amount, I'm sure we'd be better off putting it into a savings account/investing it instead, but the psychological factor of no mortgage payment 12 years sooner than expected is worth the tradeoff for me.

[NTP66]

We have something like 7-8 years left on our mortgage, and the 1.75% rate is the only reason we haven’t thrown more money at it. That cash has gone straight into our brokerage account and made 20x the interest. I know at least one other person who went the opposite direction and is throwing massive amounts of cash at their mortgage to get it off their balance sheet, even though they have a mortgage in the 3% area.

[King Colby]

Peace of mind for me is maximizing wealth. My mortgage gets autodrafted from my bank account each month and I never even have to think about it unless I actively seek it out.

Obviously it's situational but I have a hard time tracking with knowingly negatively impacting your wealth for "peace of mind" especially for something like a house which is an appreciating asset.

I make extra payments on my cars because even though they are lower interest rates than I can earn in a savings account, they're depreciating assets and I don't want to find myself upside down on those loans if something happens.

[dodint]

One size fits most.

[count2infinity]

Maybe I'll look at opening a "mortgage payoff savings account" after I get my principle down to the point of eliminating PMI... throw the $600 at a high yield savings account for the sole purpose of growing it big enough to payoff the house. That'd be pretty much the best of both worlds.

[mac5155]

I try and tell myself that then I end up spending the savings money on other BS

I blame my childhood. We never had sht. Now I have money and like things.

[skullman80]

Yeah we are at 3.25%on our mortgage , so we just let our money sit in a HYSA at like 4.5% at this point. We toss around 750 a month in that account, which is what we would put towards the mortgage as extra anyways.

[dodint]

As someone who's had brushes with the reality of losing a spouse, the idea of not having a mortgage if something were to happen to one of us is very appealing as well. But yeah, a savings vehicle like that would have the same effect.

I don't have a mortgage anymore, just a HELOC, so it's not really an issue I worry about.

[skullman80]

Meh if I kick the bucket my wife can pay off the house with my life insurance policy from work alone (though I need to look into additional term one at some point).

It really is just dependent though on how you feel more comfortable doing things. Every situation is different. I was so poor growing up that having 10's of thousands of dollars just chilling in a HYSA acct is foreign to me, but that is the situation now. I keep a couple thousand in our checking account just because, and our house acct is separate from everything (though I should just roll that into the HYSA at this point).

In any event we aren't rich by any means, but I've really been trying to start managing our money better so we can both retire at like 60 or so at the latest.

[dodint]

I don't think we'll ever retire fully but I'm certainly trying to get my **** in order so I can give FedGov the double birds if I want to.

Something kind of hit me the other day. My life insurance through work is something like $440k. The number used to feel really big and now...not so much. We don't carry more than $20k on the wife which is kind of insane given her health history.

[count2infinity]

Strike me up on the "grew up poor" list as well.

My salary has gone up 80% in the last 7 years. If you extend it to 8 years, it's 4.5x what it was. So it's one of those Ricky Bobby moments...



Really just trying to do what is easy and efficient as I could probably drive myself crazy with all the options.

[DigitalGypsy66]

With my parents estate wrapping up by June, I was thinking about paying off our mortgage. It's at 4.375% but we've got money in a 5% savings account. And I wondered about tax issues if we paid it off. Interesting.

[mac5155]

My wife was an only child and her dad has two houses on his property (his and his mother's). He's getting older and his health is certainly declining but I don't think anywhere near death. I've told him I'd assume his mortgage as he's made some pretty bad financial decisions as well as owning two businesses that went under, but the caveat was I'm renting out the mother's house. It hasn't gotten to be where he can't afford it yet, but that's my next big financial goal is to generate some real estate income in the next 3-5 years.

[dodint]

Same. We want to buy the neighbor's property and turn it into a rental(ish). That's another reason I'm emphasizing cash flow right now.

[NTP66]

Same. We want to buy the neighbor's property and turn it into a rental(ish). That's another reason I'm emphasizing cash flow right now.

I 100% thought that sentence was going to be "We want to buy the neighbor's property so that we don't have another neighbor".

[robbiestoupe]

I’m using my extra savings for long term purchases like our next car, camper, big house projects, etc. Would rather gain interest on that money now and pay cash for those items vs getting a loan/credit card for it.

Being my mortgage rate is 2.5% I’ll let that ride until a point where there’s enough cash flow to start paying more off. Which probably won’t happen for another 3-5 years at least

[dodint]

Same. We want to buy the neighbor's property and turn it into a rental(ish). That's another reason I'm emphasizing cash flow right now.

I 100% thought that sentence was going to be "We want to buy the neighbor's property so that we don't have another neighbor".

It is. We want to section off half the basement and turn it into a gym, and also take half of the garage space. Then rent it to a friend of the family until her girls graduate high school. Then it'll be our guest house.

[Beveridge]

With my parents estate wrapping up by June, I was thinking about paying off our mortgage. It's at 4.375% but we've got money in a 5% savings account. And I wondered about tax issues if we paid it off. Interesting.

There would be no tax issues with paying off a house early. If anyone ever tells you but what about the deduction, then know the person isn't very smart and you can ignore anything else they have to say, even if you can itemize. Paying the bank interest to get 12%-30% of it "back in taxes" is one of the biggest scams banks have going.

The math doesn't take risk into the equation. I like earning interest just as much as the next guy, but I'm not paying the bank anymore than I have too interest be damned. Main reason I only did a 15 year mortgage on our build along with wanting to pay it off in 10 years if not sooner.

[DigitalGypsy66]

My wife is extremely intelligent and does most of our finances, but due to her upbringing (multiple divorces, her mother moving back with her mother after one of them, plus inheriting her mother's Great Depression scarcity mindset) she has horrible blind spots with some of our financial decisions. For years, she'd prefer getting a large tax refund rather than having more per paycheck. She was hesitant to open high yield savings accounts because she was scared of not having immediate access to the funds etc. I've worked on her a good bit on this stuff, but the mortgage will be a battle. I'm ready for it though. I'd love to be done with that nonsense and start working on buying a mountain redoubt in Western NC.

[King Colby]

Maybe I'll look at opening a "mortgage payoff savings account" after I get my principle down to the point of eliminating PMI... throw the $600 at a high yield savings account for the sole purpose of growing it big enough to payoff the house. That'd be pretty much the best of both worlds.

See this is totally different - PMI is throwing money away so the faster you can knock that out the better.

Actually I took lender-paid PMI in exchange for 1/8 point on my interest rate (went from like 4.0 to 4.125)... which I then refinanced at 2 5 during covid

[mac5155]

Hi folks any recommendations on a budgeting app preferably a simple one that's free

[willeyeam]

@NTP66

[NTP66]

I was actually thinking about that earlier, and I know of no free solution anymore, with Mint.com shutting down. I still love Quicken even with the weird issues with oddball banks who refuse to allow direct connect. You can find discounted subscriptions on eBay for under $50/year, which to me is worth it.

[dodint]

I use a spreadsheet.