hodaka1974
Expert
- 98
More SoCal wise-dumb let me see here, you drive a $65,000 car, wear a $2500 suit and live in a $10,000 double wide trailer, have the Jim Rome show on speed dial, and sell oranges to make some extra scratch.
In your case, you claim to receive 1099's. Drug dealers and prosititues don't get those. Then again, maybe the hookers get them from their pimps.
Nttwrkz LLC
Expert
lookin4abetterwayinpa
Expert
I know that I am new, and this site fascinates me. two key points come to mind though. Perception is reality to most. and b, have any of you ever read the book the millionaire next door? My accountant, and more importantly my mothers acountant(one in the same) lives in a modest house in an upscale neighborhood, free and clear for 15+ years. He also drives a honda civic, by looking at it i would guess 2002. He provides a service to me, one that I trust in, mainly because he has never done me nor my family wrong. Would I feel the same way if he drove bugatti? Yes, I would because we build relationships with people, not material posessions. Not to belabor the point, but research how stanford university was founded, it's amazing. Sorry I ranted but NO I do not think bmw=success>
- 14,808
I don't think it matters what you drive as long as it's a certain percentage of what you make. I sold cars (Beemers) for years and all too often people's monthly payment was a full week of pay. To me that's insane.
ScotinOH
Expert
Any Dave Ramsey fans? He's a financial guy that says "the paid off home mortgage has replace the BMW as the status symbol of choice" at the beginning of his radio and tv show.
- 17,048
Do a search on Dave Ramsey and you'll find several threads on him pro and con.
- 9,744
Dave Ramsey has found a niche as the financial planner to "white-trash" types.
A "paid-off mortgage" is one of the stupidest financial moves you can make.
It's a financial strategy based on not logic, but emotion.
First off, it makes you extremely "illiquid". Cash is king!
Number two, mortgage interest is one of the few tax-deductible items left. After-tax, a 6% mortgage costs you about 4.3%...
Assuming you can afford the payment (an important consideration), if you can find a return greater than 4.3%, you're ahead of the game.
These pundits will say, "but look at the interest you save!", without taking into account the earnings that you forfeited.
Dumb.
- 15,319
I just re-financed into a 15 yr. @ 4.875. If I pay an additional $400 per month, I finish this off in about 12 years.
Since my investment returns are taxable (either now or in the future), I would need a guaranteed rate of return over 4.875 to be "ahead of the game."
Where can I get a 12 year investment of $400 per month GUARANTEED to return at least 5-7% for the entire term. (If the investment is a wash with the increased mortgage payment, it's not an investment, just a trade of dollars).
And just as important, after paying the mortgage off, how about all the freed up cash I can then invest?
I'm not saying paying off the mortgage is a good or bad idea. What I am saying is that any investment that returns much more than the mortgage interest has some risk. You can't compare dollars at risk with guaranteed dollars.
Rick
- 9,744
What about liquidity Rick?
Once it's tied-up, maybe you can re-finance if you need cash...or maybe you can't...
Equities will return far in excess of 4.875% (after-tax) over the long term.
No, not guaranteed. But you are giving up liquidity.
There's no perfect solution, agreed.
Once it's tied-up, maybe you can re-finance if you need cash...or maybe you can't...
Equities will return far in excess of 4.875% (after-tax) over the long term.
No, not guaranteed. But you are giving up liquidity.
There's no perfect solution, agreed.
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