Thank you Cyprus - gave push to pay off mortgage and car loan today. Stupid or smart?

Best. Move. Ever.

Financial planners don't agree because how can they make a living if you're not invested. Bankers also will tell you to leave it in the bank but of course they have a vested interest as well.

Come what may you have a roof and that ain't a bad thing.

smart!

Thank you, I still feel a little shaky. . .

We asked out tax guy, and
he said the interest money we would save on the loan was enough from his angle to justify losing the mortgage interest writeoff.

That might tell you how little I earn. . .hehe.

The lower your tax bracket, the less a tax loophole means.
Because it won't save you much.

Now a tax CREDIT is great for lower income people, like the earned income tax credit. It saved my hide once or twice.

I agree financial planners need some money to plan with, and if you don't have it, well, it is harder to plan.

TPTB do not like the sheep being debt free - you are now on their radar as a potential trouble maker !

Should I be honored??

A sheep without a ball and chain is a better sheep

( according to the sheep).

The wolf on the other hand does not mind hobbles on the prey.

Last Edited by beeches on 03/20/2013 02:39 PM

We did the same thing about 4 years ago. It really feels great not to have the mortgage hanging around our necks! At the moment, that freedom is allowing us to help our daughter, who is a single mom with two kids, and a child support check that sometimes makes it, and sometimes not.

We still have some savings in the credit union, but have a few medical bills coming our way in the next few months (our dental plan isn't the greatest for periodontal work).

Cyprus is scary, but in our local paper it got about zilch in coverage, so, if it should happen in the US, I know a lot of people who are going to be scratching their heads and saying 'What thing in Cyprus?'

Good on you, OP, for doing the brave, and scary thing!

Glad to hear it gave you what I want - freedom.

Don't have grandchildren yet, but other family members may need care soon - the sandwich generation thing.

So do I pay for an expensive in-home care insurance policy that would make it possible for me to continue working, if a family member needed in-home care -

or do I reduce expenses so if I have to retire earlier, I can?

Well we picked option #2.

Medical expenses are rough, you are right. That is probably going to be the major reason for me to keep working - I do have good coverage.

Of course, today all is up for grabs.

Your daughter may benefit from the Earned Income Tax Credit, the EITC.

It is a credit for people who do not earn much and have kids.

If she GETS the child support, she is still eligible to try for the EITC.

Child support is NOT taxable income.

Good Luck to her and you. Family is where the true "wealth" is.

Someone take the other side and tell me how dumb, how I invested too much in one basket (real estate) and not enough in equities.

Go on, I can take it!

My financial planning friends (one of them, at least) would say
(and has said to me)

" I expect something like that from a client, but not from you!!!"


He he he.

Last Edited by beeches on 03/20/2013 03:47 PM

I took a yearlong course in financial planning at a local university, that is how I came to know how dimly the FP community views things like this.

Dave Ramsey? Oh no!

Turning down a home equity loan? Why?

The course clarified for me that I think exactly opposite to the credit-seeking, investing-in-Wall-Street person.

There are ways (like fixed indexed annuities) to save that do not involve the stock market.

And indeed I did learn a lot about annuities from that course.
But basically, I learned what NOT to do.

..better to be debt free period. In the US, forget Cyprus, your savings is less that the interest rate so you are saving at least a few % on home payoff, even more on car loans. In a low inflation environment cash is king, in a high inflation arena, assets are king. Cyprus in a minor blimp on a minor screen in a room of HD big screens. Now get 6mo cash reserve to tide you over in a bad stretch...good move on your part...IF Cyprus turns into a nothing will you feel bad? I hope not, debt free is better regardless of what a small island nation does. Now use a credit card if you want to really manage cash. Pay all bills with CC and PAY that off monthly, NEVER carry a balance. If you can't do that, tear up all but 1 or 2 and try not to use them. You do not have the maturity or finances to use credit well.

Great move and it does feel great, good for you. I played penny stocks about 12 years ago, hit it big for us, so instead of buying us as in me and my wife, toys we paid the house off. Have not had a mortgage payment in 12 years and the loan would normally be paid off in may of 2015. Enjoy the extra income each month and the NO PREASSURE of getting it paid off. Congrats.

One more vote for smart move.

Beeche, Tell that NO GOOD FP too take a HIKE!....NEVER EVER take advice from someone with a VESTED interest!


After Chase and I has our 10th quarrel over paying my property taxes out of MY escrow, I "bit the bullet" and used ALL my savings and paid this sucker off!

It's so nice to be able to smile when I hear guys at work complaining that they are broke...but you can only give someone who doesn't want to listen so much advice.

nice choice it wasn't doing much good sitting in the account.

if I had the spare cash to clear out debts I would choose the same option.

My husband agrees with you. He says only homeowners and asset owners benefit from inflation.

No, I do not like credit cards - not at all. If I can't walk in with the money in hand, I try to do without.

For some unknown reason, I kept wondering at work today . . .what is a steamrolled Gobias?

So glad GLP is back last night it was gone.

Thanks for comment - tell us what your name is, I am a popular culture dummy, so maybe I should recognize it, but I don't.

Right.
I could not agree more with the last paragraph.

Chase had my car loan once upon a time - no screwups there, but mortgages are different.
Yes, we bit the bullet too.

You used ALL your savings - wow. I am impressed. At least a little is still in the nest egg or I woulda flown the coop.

To whoever pinned this - thanks. A first for me.

you did the smart thing OP


i myself have no debts. paid the mortgage, the cars are paid for. credit cards (for the cashback) are paid off monthly


nobody is making easy money from you now



and for all the doomers here, the shit mighjt not hit the fan for a long time, if ever in our lifetimes


ya just dont know

"nobody is making easy money from you now" i like that.

Pet peeve: these silly gift cards. You buy something that is no better than cash - in fact it is a lot worse. It is only good in one store. Some gift cards waste away over time - I mean they lose their value. And if you never use it, the store has the money anyway.

easy money too.

Being kinder to the financial planning community......


the columnist Michelle Singletary writes about financial matters and gives talks, seminars, etc.

She wrote that at her seminars, she sometimes asks the audience
"How many of you are homeowners? Please stand up." Lots of people stand up.

She then says "If you are currently paying a mortgage, sit down."

Usually only a couple people are left standing. If I recall her thinking accurately, she wanted to make the point that you truly own something only when you own it free and clear.

High standards that I have not met until today.

From previous posts of mine, some GLPers may know that I care about God. There is no doubt in my mind that when my new husband and I were frantically searching for a new house that would fit our new his - and - mine family,

God looked out for us. Nothing worked, nothing.
We ended up staying put in my house after we got married.

And that is why the mortgage was low.

Well, someone was smarter than we were, for sure!

Last Edited by beeches on 03/20/2013 04:50 PM

im confused if there was a full on crash, who would collect the allgeded debt?

^^Right on.

Financial sorts would flip out, but you can't undervalue safety. Not paying off your home and investing is really like taking your title to vegas and gambling with it.

The OP is banking on there not being a crash. He will feel stupid of course if there is one at the end of this month and he has no cash. HOPEFULLY the OP has lots of food stored.

Who would collect the mortgage? In a full-on frontal crash, maybe no one.

But if someone is looking to take 10% or 5% from my bank account, I would do better to have spent that money on an appreciating asset (the house) or to cut down a more expensive loan (the car loan).

And even if we don't have Cyprus here, inflation does exactly the same thing over time.

It eats away the value of your savings.

And I think inflation can only go up.

Last Edited by beeches on 03/20/2013 04:58 PM

Yes. Very good move in my opinion. We are trying hard to pay off our mortgage. Banksters live off our debt.

Good luck.

What do you think about the people who really save money, not couponers, but people who do all kinds of things.

I like the book about America's Cheapest Family. They were amazing.

Of course I did not buy the book but borrowed it from the library.

There's only one place in which your money is safe. It's yours, do as you please.