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| bigdave |
 Posted: Wed Dec 21, 2005 6:44 am Post subject: |
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Investing Sr. Associate
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| frusnak wrote: |  newb, you are starting to get serious alot younger than most people.
If you own a house, you should make it a priority to pay off early by making extra dollar amount payments each month to the principle. Easy to say hard to do especially if you have children.
 in reguards to your gramar errors, do not worry, warren will correct both of us.  |
It is easier to pay down a home quicker than people think... One thing you can do even if you cant afford extra payments is as your lender if you can go to bi monthly payment plan that will knock a few years and achunk of change you won't pay in interest while paying the same amount just half at first of month and other half in middle.
but paying extra on a mortgage while you can is a GREAT savings means. I am currently blessed to be at a point i can make double payments and still live the good life (no kids yet)  with double payments my 30 yr loan will be paid off in 8 and i will save like 150K by not taking it to full term of 30 yrs. Even 5 buts extra a payment helps as its not the loan amount that kills you its the interest! |
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| barloy |
| Posted: Wed Dec 21, 2005 3:24 pm Post subject: thats right |
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Investing Sr. Associate
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| you are right i wish that i would have but spent my money on cas and women and beer wasnt to smart young dum and full of well you kmow just dum man if i had some of that cash today |
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| poornewb |
| Posted: Thu Dec 22, 2005 6:27 am Post subject: |
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Investing Manager
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Dont worry It doesnt matter how old you are you will probably always be spending money on cars, women and beer- It just goes from hot cars loose women and cheap beer to
Family car-wife and daughters-and you just still have to buy the cheap beer ahahahah |
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| yatesw84 |
| Posted: Sun Apr 16, 2006 4:19 pm Post subject: |
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Investing Sr. Associate
Joined: 10 Apr 2006
Posts: 50
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43.83 e$
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| start investing when young and full of energy and then start kicking it when you're old and rich |
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| MrT |
| Posted: Mon Apr 17, 2006 4:45 am Post subject: |
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Investing Sr. Associate
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| Speaking of paying off the house, how many people out there think its better now to pay off the mortgage than invest in stocks. For the past few years, I would have picked mortgage, but the market appears to be making a rebound, and its tough to make that call now. |
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| Dave Rathbun |
| Posted: Mon Apr 17, 2006 7:43 am Post subject: |
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CFO
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I have what is probably a less popular opinion on this, but I have some numbers to back it up. Take your mortgate rate, whatever it is, and add 5% to it. That's the return that you have to be able to get to just break even by investing your extra house payments in the stock market. So if you have a mortgage at 6%, you need to make 11% on your money before it makes sense to invest rather than pay off your house and retire that debt.
I "proved" this with a rather long post from last year. In a nutshell, people think paying interest on a house is a good thing because you get a deduction. I say it's a bad thing because you're still paying interest. Your deduction only gets you back a part of what you're paying in interest. Oh, and if you invest in stocks rather thay pay off your house, then you pay taxes on the gains you make. So you're paying interest on your house + paying taxes on your gains. In order to do more than break even, your investment return needs to be 5% more than your mortgage rate. I'm not saying that's not possible, just saying that it's something a lot of folks don't think about.
Original Post
A wanna-be financial advisor tried to tell me that I should not pay off my house, that he had some guaranteed investments that he could put me into. I asked if they were paying 13%, and he wanted to know why. (My mortgage rate at the time was 8%). I ran the numbers for him. He looked, but he was never able to find a hole in my reasoning that convinced me to invest. We paid off the house.  |
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| MrT |
| Posted: Mon Apr 17, 2006 9:50 am Post subject: |
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Investing Sr. Associate
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| I read your post and posted a dissenting opinion, let me know what you think. In general, I don't think you need that extra 5% return from stocks when compared to paying down the mortgage. However, I do agree that paying the mortgage down is an excellent investment that can really pay off in ~30 years that requires little discipline compared to investing in stocks to get the same result. |
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| Dave Rathbun |
| Posted: Mon Apr 17, 2006 12:18 pm Post subject: |
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CFO
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| MrT wrote: | | I read your post and posted a dissenting opinion, let me know what you think. |
Responded in the other topic. If you have further comments, let's keep them in that topic rather than coming back to this one just to say "I answered you over there" |
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| Prysm |
| Posted: Mon Apr 17, 2006 4:31 pm Post subject: |
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New Poster
Joined: 13 Apr 2006
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Any ideas for saving money while in college? I'll be attending MU this fall, and I think I'm going to be so far in debt in 4 years that its not even funny  |
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| DKnightSr |
| Posted: Mon Apr 17, 2006 4:43 pm Post subject: |
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Member of the Month
May
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| Prysm wrote: | | Any ideas for saving money while in college? I'll be attending MU this fall, and I think I'm going to be so far in debt in 4 years that its not even funny |
My daughter got a $10,000 scholarship (drop in the bucket as you know) and is living at home to save expenses. On top of that she works 30-35 hours a week while carrying 15 credit hours. It's taking a hell of a toll on her, but...
1. She's totally doing it on her own (builds pride and self confidence)
2. She has zero debt (just winding up her sophmore year)
3. She's learning that the bigger the prize the greater the effort... and that she has what it takes! A VERY important life lesson.
My grandma told me the secret to saving is... spend less than you earn. It's as simple as that. You know where you are and what your lifestyle/habits are.... How bad do you want it? Not being mean or critical, just being real. There are ROTC scholarships out there that pay full boat, but it costs 8 years of your life. In short... your life, your bank book, your back, your choices.
Life is FULL of choices... choices have consequences. Only when we are prepared to accept the consequence are we entitled to the choice. Whatever you choose though... best of luck! You're a better person than I am.... as I had to go back 36 years later to get my degree. It felt good getting it... but man look at the money I lost!
Put your back into it, and you can do it. Every mountain is climbed by taking the first step. I have faith in you. You wouldn't be asking if you weren't taking the mountain seriously. You CAN do this! |
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| DKnightSr |
| Posted: Tue Apr 18, 2006 2:29 pm Post subject: |
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Member of the Month
May
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| MrT wrote: | | Speaking of paying off the house, how many people out there think its better now to pay off the mortgage than invest in stocks. For the past few years, I would have picked mortgage, but the market appears to be making a rebound, and its tough to make that call now. |
Mr T- I'm not an expert, just an average working Joe. I treat my home like an investment, complete with financial costs. I also have stocks, bonds, a coin collection, a rare plate collection (don't laugh, some of it's pretty big bucks!) and a retirement savings. The point being...don't go "Just" stocks or "just" bonds or "just" mortgage payoff. Balance your "portfolio"...everything you own of value... and like the Guru said...buy low, sell high. Right now I have a 5.5% mortgage. I'd have to be on drugs to pay that off. Heck, I can buy long term bonds, make a profit, and never dirty my shoes!
With the coming of spring firewood prices are plummeting. What cost $125 @ cord now goes for $80... and we'll see alot better than that by summer. So... you invest $600 in 8 cords when it hits $75, sit on it until late fall when the $125 comes... then sell it "u-haul" for $100. Bammo... 25% profit.
There's lot's of opportunities for profits in this world. ESPECIALLY if you invest in yourself with education and/or job training. Past experience speaking... that's the best investment of all. Watch you paycheck grow... and look at it as return on investment. Do the math on it, and you'll find the return pretty high!
Or shopping- An example: Cheese. Stock up your family's freezer with cheese in the spring for the year. The cow's are "fresh" (milking due to calves) and you can usually save $2.00 @ 3 LB loaf. So you spend $60 on 20 loafs. In one year you've saved $40. Divide that by the $60 you "invested" and you have a return of 33% which is more than I've ever made in the market! (Don't forget to minus out the electricity costs for the freezer though)
Now all this may sound a bit weird, but if you make it a game... "How can I profit in 6 months" you'll find you almost can't lose. NOBODY plans ahead any more for anything. We live in a world of here..now..today. Do their "planning" for them.... and you'll make money. Believe me, you'll make money. Soap for the dirty hands don't cost THAT much
Good luck! |
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| MrT |
| Posted: Wed Apr 19, 2006 3:06 am Post subject: |
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Investing Sr. Associate
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| Prysm wrote: | | Any ideas for saving money while in college? I'll be attending MU this fall, and I think I'm going to be so far in debt in 4 years that its not even funny |
I say the best way to save money while in college is not to overspend in the first place. Colleges typically have students from all walks of life, and there are some who have nearly unlimited funds from the bank of "Mom and Dad". My advice is to be careful around around these students because its really easy to get drawn into a culture of zealous overspending by, "Why don't we go grab a pizza?", which leads to, "Why don't we go see a movie" to "Let's go somewhere and get drinks" OK, maybe these aren't so bad on their own, but the point is that a college is an unique atmosphere where you are surrounded continuously by people of your own age, which makes the social oppurtunities virtually endless.
A good example is that it's easier to resist a potentially expensive outing when you live at home, and when your friends call you to go out, you have to arrange a time and place to meet, physically drive there, ect. I can be a hassle. At college, on the other hand, all your close friends may very well live in the same building, along with dozens, if not hundreds of potentially interesting people who may just show up in your room asking to walk just a few minutes up the street to the restaurant/bar/club for an outing on any given night. Having a social scene doesn't neccessarily have to be expensive, but once you add in the fact that other students may be spending beyond their limits just to fit in, the pressure can be even worse.
The best solution, which I think few would disagree, is to budget money. If you want to save, you have to first know what you are spending. On the other hand, the number one goal of college is to get a good education and get good grades, which is an investment that pays incredible returns. For myself, I was in a very competitive undergrad program, but I knew the potential job oppurtunities were great if I not only graduated, but graduated with great grades. In my situation, a part time job that was unrelated to my major was not worth the payoff, no matter how much I could have made because it would have been a potential drain on my studies. Even one night of having to choose between a part-time job and studying to get that A on an exam would have been too much. (Jobs are typically inflexible when compared with the unpredictibility of classes in a full course load semester) By the end, I had taken on debt because of this, but I graduated with a high GPA, found a good paying job quickly, and paid it off. Although its hard to put numbers to it, I think the additional debt was worth the guarantee that I could devote a lot of time to classwork. |
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| yatesw84 |
| Posted: Wed Apr 19, 2006 4:30 am Post subject: |
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Investing Sr. Associate
Joined: 10 Apr 2006
Posts: 50
This Month: 0
43.83 e$
Net worth: 8,199.70
Portfolio Value: 8,155.87
Monthly Return: -7.27%
Trades this month: 0
Churn Rate: 0.00%Items
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I agree. Being a college student it is often frustrating to be short of money. However, I just try to remember that my purpose for being their is so that I will be competitive in the job market. Remember that!
The key is to remember debt will happen especially with student loans. Just try and minimize the debt be sticking to the thoughful advice above. Concentrate on cutting costs wherever you can even as minimal as it might seem, it all adds up! |
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| DKnightSr |
| Posted: Wed Apr 19, 2006 2:02 pm Post subject: |
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Member of the Month
May
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| poornewb wrote: | Dont worry It doesnt matter how old you are you will probably always be spending money on cars, women and beer- It just goes from hot cars loose women and cheap beer to
Family car-wife and daughters-and you just still have to buy the cheap beer ahahahah |
AMEN!!!! (From father of 5) |
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| frusnak |
| Posted: Wed Apr 19, 2006 2:18 pm Post subject: |
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CFO
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Do not try to "keep up with the jones" as my father used to tell me. Live with in your means and forget about frills for now. Work hard and save/invest while you're young and have the energy. That way when you get older you should be able to really enjoy life because you will have learned what life is all about.  |
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