Paying off a mortgage early vs putting that money in the market

Lizooki said:
The market can crash, but the paid off house is still yours.
The market will probably drop ( and not recover to this point) with Biden in office.
Click to expand...

People said the market would crash with Obama also. S&P 500 was up 166% during his term with annualized rate of 12.4%, which is actually higher than Trumps term (looking at the annualized rate). Granted there is a lot more to it, and I really don't want to get political in this thread. Also there was no Corona virus around for Obama, and it will still be here for whoever is in office next year.

There are always going to be dips over the years as the market corrects.
 
Last edited:
My unprofessional guess is that the market is heading up with Biden as president and the Republicans in control of the Senate. History says that there is nothing Wall St loves more than gridlock.
 
awheelterd said:
My unprofessional guess is that the market is heading up with Biden as president and the Republicans in control of the Senate. History says that there is nothing Wall St loves more than gridlock.
Click to expand...
This.
BUT the whole point of the thread IMO is that if you take a new 30 yr loan w/ a low rate, you have low payments.
If the market is looking prmising in the future, you can put that extra $$ into the market. If it isn't.. .well then put that $$ against the mortgage as extra payments. There's nothing preventing you from switching strategies.
But if you instead get say a 15 year loan w/ a higher payment, then you are locked into that strategy.
The difference in money saved on a 2% at 15 years vs 2.5% 30 paid off early also in 15 years is not massive.
 
Another article about the markets:

Leon Cooperman says stock market could be stuck for years — 'too much debt is being created'

From the article:

“I went back and I looked. Whenever you bought into the S&P 500 when it sold at 22 times earnings or more, your five-year return that followed was near zero,” he added. “So I would not be surprised if the market averages very little.”

“We’ve been pulling a lot of demand forward. I would expect that future returns will be relatively unimpressive for a long time,”
 
benXJ said:
Expect/assume/think

Those finance commentators are a crap shoot at best

Sent from my Moto G (4) using Tapatalk
Click to expand...


I hear you, but he is a billionaire, so I will listen to what he has to say, LOL.
 
benXJ said:
Expect/assume/think

Those finance commentators are a crap shoot at best

Sent from my Moto G (4) using Tapatalk
Click to expand...
drkelly said:
I hear you, but he is a billionaire, so I will listen to what he has to say, LOL.
Click to expand...
Some people are good at Craps. Some are lucky... and some understand physics.
 
I am in the "pay the minimum" on the mortgage camp. Invest in something else with a better return than the mortgage rate. Don't like the ups and downs of actual stocks? Look at closed ended funds with monthly dividends. My mortgage is cheaper than renting; eventually I will own the place outright. I do not look at it like a loss, just a cost of living.

The one thing you cannot buy for any amount of money is time. If you have the time, put the money where the time will work for you. Sure, you will lose some to mortgage interest but as many others posted above that money gets "cheaper" over time. That is precisely why mortgage lenders get proportionally more interest early in the mortgage term than later. The loan is designed to benefit the lender.

I made sure I had 20% in (required on my loan to avoid PMI and escrow) back when I started my mortgage. I paid up for a little while until I realized that it really was not buying me much shorter a loan term and in the short run I always had less money to invest or use for some other purpose. Invest your money in things that get returns; could be stocks, real estate, flipping cars for profit, whatever. Just remember that if the investment costs you more than you get out of it then it is a liability, not an asset. Most people have it wrong that the house they live in is an asset (and every real estate agent sells this falsehood as well). Typically most people's homes do not make them money, they cost them money (a liability) through taxes, upkeep, mortgages, etc. Even with it paid off it is still a liability. The home only makes money when it is sold or if you are renting out a portion of it for profit. It is not a bad thing, just is what it is.

Books I recommend for overall money strategies:
Rich Dad, Poor Dad
Automatic Millionaire
Millionaire Next Door
Richest Man In Babylon
 
Back
Top