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Friend of Warren
Join Date: Oct 2000
Location: Lincoln, NE
Posts: 16,484
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If You Had an extra $1000 per month to invest
What would you do? Assume mortgage interest rate is 6.25% for 30 years.
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Kurt V No more Porsches, but a revolving number of motorcycles. Last edited by Rot 911; 09-26-2007 at 12:08 PM.. |
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Well if it's not splurging on a 993 then do the right thing..Hookers and Blow
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Tim 1973 911T 2005 VW GTI "Dave, hit the brakes, but don't look like your htting the brakes...what? I DON'T KNOW, BRAKE CASUAL!!!" dtw's thoughts after nearly rear ending a SHP officer |
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Unoffended by naked girls
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Kurt's in the midwest.
Hookers and meth....
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Dan 1969 911T (sold) 2008 FXDL www.labreaprecision.com www.concealedcarrymidwest.com |
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This ones tough. The logical side of my brain says pay down the principal, the seat of my pants says the 993, and, err, the other side of my pants says blow it on chicks. I don't daly much in drugs, and I already have my dream 911, so I went with the practical side, for once. Of course, its not my money, if it were, the whores would have probably won me over in the end...
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2012 911 Black Edition Cabriolet 2008 Cayman S Grey on Black - flooded, written off 1977 930 Turbo Carrera Black on Red #411 1987 951 Black on Black - sold to make room for the 930 1972 911 2.7 - I regret selling her every single day.... |
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Friend of Warren
Join Date: Oct 2000
Location: Lincoln, NE
Posts: 16,484
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I've been giving this a lot of thought. At first I thought paying down the house was a better idea. But the more I research this I am concluding investing, even if at a lower rate than the mortgage payment, is a better idea. The invested money is readily available, as opposed to equity in the house, and can always be used to pay the principle down later.
But drugs and whores is always my first choice. ![]()
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Kurt V No more Porsches, but a revolving number of motorcycles. |
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It depends on your current equity position in the house and how long you want to keep it. If the mortgage payment is no problem for you and you plan to keep the house until it's paid off, then I wouldn't pay down extra principle. Even if you paid it down by 99%, your required minimum payment, taxes and insurance wouldn't change. If you have less than 20% equity and think you may sell in the next five years, then I'd think about paying down the balance.
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2022 BMW 530i 2021 MB GLA250 2020 BMW R1250GS |
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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Creat a Hobby Business. For instance buy a collectable and resell at a profit. Of course it requires you have some knowledge of the items you are trying to sell. Knowing what your looking at, its current value and the desirabilty of what your selling is helpfull. Its not as hard as it sounds.
I started in Art with no knowledge of the subject, and a coupla years later...you wind up knowing something. The only thing I had going for me was an eye for good quality. Thats like being able to tell the difference between a Porsche and a Camero. Which one has better quality built in???
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Location: Palm Beach, Florida, USA
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Hookers and blow is an investment in your lifestyle. Much like a cabin or a boat, the relaxation they afford might extend your life, or at least make it more pleasurable. I'd tilt the portfolio at least 80/20 in the hooker/blow ratio. Just remember, you get what you pay for, but you will always pay for what you get.
If you're going to invest, paying down the mortgage is never the wrong answer either. Knowing whether there are better options requires more information. The big market gurus will chime in in a few minutes and tell you how a mortgage is your best investment, to stick everything in the market and ride it out, but there is much more to the story than that. If you pay down the mortgage you are receiving at least the effective mortgage rate as your return on investment - tax free and without risk. Yes, I know mortgage interest is tax deductible, but with the AMT and itemized deductions versus the standard deduction, it's not the tax savings most people think. And the big thing is that if you pay down the principle you save on interest and shorten the life of your loan. That means you can have a mortgage-free house in a few years. And that means you can have an increase in your cash flow of the $1,000 a month that you were paying down the mortgage with and the monthly mortgage that you don't have to pay any more. Think of the reduction in your cost of living if you have no house payment. With no house payment you can retire earlier and with less savings. If you are going to invest, do it in the market in as low of a cost no-load index fund as you can find. Over ten years the S&P 500 beats about 97% of all financial fund managers. I would recommend putting half in an S&P 500 index fund and the rest in some broad international funds. The dollar is going down and the international economy is growing, so you need good international exposure. Unless you have some special industry knowledge or some private pipeline to the truth, it's probably best to buy funds rather than individual stocks. Stay broad, don't pay fees, and put your money where the broader market will lift all investments, not on the performance of some fund manager who got lucky last quarter.
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MRM 1994 Carrera |
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Friend of Warren
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Location: Lincoln, NE
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Quote:
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Kurt V No more Porsches, but a revolving number of motorcycles. |
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All of the above.
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1996 FJ80. |
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Ok, so paying down the mortgage balance makes sense, but I wouldn't throw the entire $1000 per month at it. You can knock the last seven years (84 payments) off your mortgage by making one extra P&I payment per year (divide normal P&I payment by 12 and add that much to each monthly payment). If you can figure out when you want to have it all paid down, I'm sure there's an amortization program on some website to show you how much extra to pay each month.
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Join Date: Oct 2005
Location: Hinsdale, IL
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This is why I love this board...because even when someone asks a legitimate question, everyone votes for hookers and blow
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Garrett Living and Thriving |
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Join Date: Jun 2000
Location: N. Phoenix AZ USA
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Have been making from 18 to 22% off of my investments the last 2-3 years. Cannot make anywhere near that in real estate around here so would keep socking it away as I have been for retirement.
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2013 Jag XF, 2002 Dodge Ram 2500 Cummins (the workhorse), 1992 Jaguar XJ S-3 V-12 VDP (one of only 100 examples made), 1969 Jaguar XJ (been in the family since new), 1985 911 Targa backdated to 1973 RS specs with a 3.6 shoehorned in the back, 1959 Austin Healey Sprite (former SCCA H-Prod), 1995 BMW R1100RSL, 1971 & '72 BMW R75/5 "Toaster," Ural Tourist w/sidecar, 1949 Aeronca Sedan / QB |
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Seriously? It all depends on your other investments/financial/personal portfolio:
How long do you want to work? Do you have a secure retirement plan? Tax profile...means a bunch. Kids college funds...invested? Mid-life crisis? So much more...if I was you and had a spare 1K an month, extra to my financial plan, I'd invest in your lovely daughter right up until there was spare cash for moi ![]() We can't take it with us, but they can.
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1996 FJ80. Last edited by Seahawk; 09-26-2007 at 01:02 PM.. |
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What Seahawk said
I always throw an extra few hundred on the house note every month, will end up paying it off about 10 years early Depending on your income, if you can put it all in tax free or tax deferred investments is pretty attractive. You could toss the whole grand in an education IRA, or even start a Roth or Regular IRA for your kids. Compounding interest is a beautiful thing.
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She was the kindest person I ever met |
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Join Date: Aug 2000
Location: Palm Beach, Florida, USA
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You say that like hookers and blow aren't legitimate options.
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MRM 1994 Carrera |
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Southern Class & Sass
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Quote:
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Dixie Bradenton, FL 2013 Camaro ZL1 |
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Join Date: Aug 2000
Location: a wretched hive of scum and villainy
Posts: 55,652
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Oil refining companies, (not oil producing companies) such as tesoro, Valero, frontier oil.
Tesoro was just added to the S&P 500 this week. It's getting bigger fast. It should mimic the meteoric climb that valero experienced over the past 5 years or so and take off in early spring. These stocks are down quite a bit this quarter, but that is a normal seasonal turn. they go down in the fall and up in the spring. Over the last 5 years I've averaged at least a 100% ROI per year. Not too shabby especially when it is compounding every year. That turns into about a 1600% profit. since I had almost every penny to my name including my 401K invested in TSO and VLO, I did very well. It probably won't continue that steep of a trend but I still think it's going up. Why use the money to pay off a 6% loan when you can make 30% or better, pay off the loan, and have a bunch left over? 2007 Stock Data Close YTD%Change Tesoro [NYSE:TSO] $49.70 51.13 Valero [NYSE:VLO] $68.26 33.42 Sunoco [NYSE:SUN] $73.37 17.66 Frontier [NYSE:FTO] $43.27 50.56 Holly [AMEX:HOC] $62.03 20.68 Western [NYSE:WNR] $41.77 64.06 Alon [NYSE:ALJ] $35.28 34.09 Delek [NYSE ![]() Last edited by sammyg2; 09-26-2007 at 01:59 PM.. |
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529
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1987 Venetian Blue (looks like grey) 930 Coupe 1990 Black 964 C2 Targa |
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Join Date: Apr 2001
Location: Linn County, Oregon
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That's a good mortgage rate. I'd probably compromise...$500 on the mortgage, $500 in a no load index fund under a Roth IRA....
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"Now, to put a water-cooled engine in the rear and to have a radiator in the front, that's not very intelligent." -Ferry Porsche (PANO, Oct. '73) (I, Paul D. have loved this quote since 1973. It will remain as long as I post here.) |
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