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Originally Posted by trader220
Most people don’t have the cash laying around to pay for the house, in fact very very few do so that’s moot point.
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I'd then say that they spend beyond their means. The house I now own isn't my first one. I bought a small house (sold it for a profit), and then bought a bigger house (ditto), and then bought the house that I currently live in.
I'd guess that I've saved $500,000 in interest. Mortgage interest isn't totally deductible after you start making decent income.
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I would say that if you can get cheap money in fixed mortgage you’re better off taking the money now and working to beat the fixed rate you’re paying over time and its like not paying interest at all.
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What investment other than Treasuries beat mortgage interest rates last year? I know the S&P500 was down 37%, commodities got killed, and even corporate bonds were savaged. Once you lose this much in one year, it is very difficult to get back the money that could have paid off a home loan.
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As far as 60% in blue chips, well blue chips got smoked in 2008.
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That is true, but not one stock that own I has cut the dividend rate. I am still getting income taxed at 15%, and I can wait until the stock comes back because I have no debt.
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Credit and debt are not bad things, it depends on what kind and how you use it.
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That is true. A business owner can make money if he borrows money to buy a piece of equipment that earns a good ROR.
Nonetheless, 2008 taught us that most consumers do not have the intelligence to properly use debt. It also taught us that most banks do not have the intelligence to loan money to people that can pay it back.
After all, we would not be in this severe recession if this country had used debt properly.