Stock market is up. Asset allocation = time to sell comics?

[jkrk]

Paying off debt is great, especially mortgage debt since it is most people's largest.

 

It is a guaranteed rate of return.

 

Surprised to hear you say this, unless you're just giving out advice to the average person. Aren't you one of the day traders around here? Every person I've ever personally known who majored in or works in a financial area or who has owned a smaller company I've worked for has always refinanced to maximize their home loan amount figuring they can invest that money to beat whatever the current mortgage rate is minus the 25% or so tax deduction you get from the interest.

 

I know what you are saying. (I'm not a day trader per se, though I do work in the industry). This is more of a personal opinion, rather than advice I would give to others.

 

I think it is no coincidence to me that most people who have paid off their mortgage early that I know of are wealthy and relatively conservative considering their wealth. It is not for everyone. And I have heard all the arguments for keeping a reasonable mortgage at a good rate - from the tax deduction perspective to the put the extra money somewhere else for a better rate of return perspective to the if there is an emergency you can't liquify the funds in your home perspective, etc.

 

I, myself, am not sure I would steer clients in the direction of paying off one's mortgage early - for the main reason that everyone's financial situation is different. But of the people I know that have chosen that direction, it has always been a successful financial decision.

 

Paying off one's mortgage falls in line with other fixed rates of return. For the most part, you will not get burned by it since it is guaranteed. And it is not a step towards getting outlandishly rich.

 

Personally, I abhor mortgages. The main reason is because it allows one to buy something that one cannot afford (even with 20% down, it is an 80% loan).

 

The one reason for which I do like loans is the fact that it acts as a forced savings plan for the average person. Most people are not savers. Without this forced savings plan, most people would have nothing left when they stopped working. I've known many, many average incomers who were financially saved because by retirement they were able to sell their home, which had by then been paid off, to fund their nest egg.

 

Sorry for the long post!...

 

 

I started working in the business in 1985 as an Options trader on the Amex. I left the floor in early 1987 trading my own account as a daytrader. In the early/mid 90's I started to trade mostly Arb deals. In the late 90's I added pair trading to the mix. I started adding commodities in the 2000's.

 

I took out a motgage in 1983 to buy an apt in manhattan. I paid it off in 1987

 

Why? I never was sure what my annual income would be so I wanted to minimize my living expenses the best I could. MY mantra has always been to live as fiscally conservative as I could.

 

Some call it frugal.

 

 

[piper]

Paying off debt is great, especially mortgage debt since it is most people's largest.

 

It is a guaranteed rate of return.

 

Surprised to hear you say this, unless you're just giving out advice to the average person. Aren't you one of the day traders around here? Every person I've ever personally known who majored in or works in a financial area or who has owned a smaller company I've worked for has always refinanced to maximize their home loan amount figuring they can invest that money to beat whatever the current mortgage rate is minus the 25% or so tax deduction you get from the interest.

 

I know what you are saying. (I'm not a day trader per se, though I do work in the industry). This is more of a personal opinion, rather than advice I would give to others.

 

I think it is no coincidence to me that most people who have paid off their mortgage early that I know of are wealthy and relatively conservative considering their wealth. It is not for everyone. And I have heard all the arguments for keeping a reasonable mortgage at a good rate - from the tax deduction perspective to the put the extra money somewhere else for a better rate of return perspective to the if there is an emergency you can't liquify the funds in your home perspective, etc.

 

I, myself, am not sure I would steer clients in the direction of paying off one's mortgage early - for the main reason that everyone's financial situation is different. But of the people I know that have chosen that direction, it has always been a successful financial decision.

 

Paying off one's mortgage falls in line with other fixed rates of return. For the most part, you will not get burned by it since it is guaranteed. And it is not a step towards getting outlandishly rich.

 

Personally, I abhor mortgages. The main reason is because it allows one to buy something that one cannot afford (even with 20% down, it is an 80% loan).

 

The one reason for which I do like loans is the fact that it acts as a forced savings plan for the average person. Most people are not savers. Without this forced savings plan, most people would have nothing left when they stopped working. I've known many, many average incomers who were financially saved because by retirement they were able to sell their home, which had by then been paid off, to fund their nest egg.

 

Sorry for the long post!...

 

 

I started working in the business in 1985 as an Options trader on the Amex. I left the floor in early 1987 trading my own account as a daytrader. In the early/mid 90's I started to trade mostly Arb deals. In the late 90's I added pair trading to the mix. I started adding commodities in the 2000's.

 

I took out a motgage in 1983 to buy an apt in manhattan. I paid it off in 1987

 

Why? I never was sure what my annual income would be so I wanted to minimize my living expenses the best I could. MY mantra has always been to live as fiscally conservative as I could.

 

Some call it frugal.

 

 

Mortgage Free? I can dream...

[thehumantorch]

Paying off debt is great, especially mortgage debt since it is most people's largest.

 

It is a guaranteed rate of return.

 

Surprised to hear you say this, unless you're just giving out advice to the average person. Aren't you one of the day traders around here? Every person I've ever personally known who majored in or works in a financial area or who has owned a smaller company I've worked for has always refinanced to maximize their home loan amount figuring they can invest that money to beat whatever the current mortgage rate is minus the 25% or so tax deduction you get from the interest.

 

I know what you are saying. (I'm not a day trader per se, though I do work in the industry). This is more of a personal opinion, rather than advice I would give to others.

 

I think it is no coincidence to me that most people who have paid off their mortgage early that I know of are wealthy and relatively conservative considering their wealth. It is not for everyone. And I have heard all the arguments for keeping a reasonable mortgage at a good rate - from the tax deduction perspective to the put the extra money somewhere else for a better rate of return perspective to the if there is an emergency you can't liquify the funds in your home perspective, etc.

 

I, myself, am not sure I would steer clients in the direction of paying off one's mortgage early - for the main reason that everyone's financial situation is different. But of the people I know that have chosen that direction, it has always been a successful financial decision.

 

Paying off one's mortgage falls in line with other fixed rates of return. For the most part, you will not get burned by it since it is guaranteed. And it is not a step towards getting outlandishly rich.

 

Personally, I abhor mortgages. The main reason is because it allows one to buy something that one cannot afford (even with 20% down, it is an 80% loan).

 

The one reason for which I do like loans is the fact that it acts as a forced savings plan for the average person. Most people are not savers. Without this forced savings plan, most people would have nothing left when they stopped working. I've known many, many average incomers who were financially saved because by retirement they were able to sell their home, which had by then been paid off, to fund their nest egg.

 

Sorry for the long post!...

 

 

I started working in the business in 1985 as an Options trader on the Amex. I left the floor in early 1987 trading my own account as a daytrader. In the early/mid 90's I started to trade mostly Arb deals. In the late 90's I added pair trading to the mix. I started adding commodities in the 2000's.

 

I took out a motgage in 1983 to buy an apt in manhattan. I paid it off in 1987

 

Why? I never was sure what my annual income would be so I wanted to minimize my living expenses the best I could. MY mantra has always been to live as fiscally conservative as I could.

 

Some call it frugal.

 

 

Mortgage Free? I can dream...

 

[delekkerste]

People with the argument that you need the write off doesnt wash when you factor in what you paid out in interest and what you get back. Been mortgage free for eight or nine years. F-ck giving the bank your money.

 

(thumbs u

 

Spot on. Thinking of the mortgage deduction as a tax write-off is absolutely the wrong way to think about it. All the "deduction" is doing is lowering your effective borrowing cost. I bought my apartment in 2007 when mortgage rates were maybe around 6.25%. Some people like my mom said I should take out a mortgage for the "tax write-off" (never mind that I would be paying out 6.25% before getting that write-off!) Some slightly more sophisticated people were saying take out a mortgage because you could beat that rate in the stock market or elsewhere. Um, right, really great advice that was, watching the market tank by 50% while continuing to have to pay interest on the full amount borrowed. :doh:

 

Even at a tax-advantaged 4.50% today, what are you going to buy in the current marketplace to beat that? Bank interest rates are well below that level (well, at least at any bank that I would consider banking with). The entire Treasury bond curve is below that level. Stocks have been spectacular since March, but at these levels, that's a lot of risk to take on using your mortgage money.

 

In the end, I decided that buying my apartment outright (i.e., no mortgage) was the best option. So I did. Obviously, that's not a choice that many people have, at least not right away, but I am a firm believer in living with as little debt as possible. I absolutely do not consider mortgage debt to be an exception to that rule (the only possible exception would be self-liquidating debt tied to a productive business). I firmly believe that most people would be better off paying down their mortgages if they can, instead of using that money to overspend or to speculate in riskier assets.

[DR.X]

Excellent post. I think that if people really understood what kind of mortgage was best for them and not the bank, many homeowners would be mortgage free also. Many people take a 30 year saying, " the payments cheaper, and I'll just add some extra money every month". Do the math. Its not that hard. Whats it costing you in interest on a 30 over a 15 year note. Sure, the payments higher but what are you saving on the back end. There are alot of other products. Bi-weeklys. The bank wont offer them, but they do have them. When I financed the home Im in now the difference between 30 and 15 was over $ 80,000.00 in interest. No way the bank was getting that. I was still single at the time I built this house with no kids so the 15 was the way to go. The bank wanted me to go 30, no ing way. Give me the loan I WANT or I get another bank. Paid it off in 11 years. No more mortage, no worries about house payments. More comic money baby.

 

 

DRX

[greggy]

I'm mortgage free.

[MutantKeys]

I'm mortgage free.

[lizards2]

I'm mortgage free.

 

living in an '86 Chevy....,

[lizards2]

I'm closing a refinance from these guys tomorrow:

 

http://www.capcenter.com

 

4.5% for 15 years, no points, no closing costs at all. The no closing costs thing sounds too good to be true, but I know someone else who has used these guys for a refinance with no problem. Anyone else found these no closing cost loan companies? They claim they can do it because they do all the closing and lending themselves and outsource almost nothing, i.e. they own a title search service and most or all of the other closing services banks typically outsource.

 

"Please note we do not currently offer loans for less than $50,000 dollars."

[lizards2]

I'm closing a refinance from these guys tomorrow:

 

http://www.capcenter.com

 

4.5% for 15 years, no points, no closing costs at all. The no closing costs thing sounds too good to be true, but I know someone else who has used these guys for a refinance with no problem. Anyone else found these no closing cost loan companies? They claim they can do it because they do all the closing and lending themselves and outsource almost nothing, i.e. they own a title search service and most or all of the other closing services banks typically outsource.

 

"Please note we do not currently offer loans for less than $50,000 dollars."

 

"Please note that our zero closing costs mortgage offer only applies to loans which equal or exceed $75,000 dollars. If you wish to apply for a loan below $75,000, please call us at (804) 968-5000 for your quote."

[FlyingDonut]

Excellent post. I think that if people really understood what kind of mortgage was best for them and not the bank, many homeowners would be mortgage free also. Many people take a 30 year saying, " the payments cheaper, and I'll just add some extra money every month". Do the math. Its not that hard. Whats it costing you in interest on a 30 over a 15 year note. Sure, the payments higher but what are you saving on the back end. There are alot of other products. Bi-weeklys. The bank wont offer them, but they do have them. When I financed the home Im in now the difference between 30 and 15 was over $ 80,000.00 in interest. No way the bank was getting that. I was still single at the time I built this house with no kids so the 15 was the way to go. The bank wanted me to go 30, no ing way. Give me the loan I WANT or I get another bank. Paid it off in 11 years. No more mortage, no worries about house payments. More comic money baby.

 

 

DRX

 

When we first changed from a 30 year to 15 year, our payment jumped about $400 a month. My mother, who is seriously old school about debt - the only debt allowed is a mortgage and even that is a bad thing - nearly had a stroke. I sat down and showed her the difference in amount out of our pocket - roughly $179K. She was OK with it then.

 

We've refinanced our mortage six times in the 10 years we've lived in this house. This might be the last time - I don't think I'm getting better than 4.375, but you never know. 3.99 anyone?

[paperheart]

I'm mortgage free.

 

+1 and better still, i actually own a property

[paperheart]

People with the argument that you need the write off doesnt wash when you factor in what you paid out in interest and what you get back. Been mortgage free for eight or nine years. F-ck giving the bank your money.

 

(thumbs u

 

Spot on. Thinking of the mortgage deduction as a tax write-off is absolutely the wrong way to think about it. All the "deduction" is doing is lowering your effective borrowing cost. I bought my apartment in 2007 when mortgage rates were maybe around 6.25%. Some people like my mom said I should take out a mortgage for the "tax write-off" (never mind that I would be paying out 6.25% before getting that write-off!) Some slightly more sophisticated people were saying take out a mortgage because you could beat that rate in the stock market or elsewhere. Um, right, really great advice that was, watching the market tank by 50% while continuing to have to pay interest on the full amount borrowed. :doh:

 

Even at a tax-advantaged 4.50% today, what are you going to buy in the current marketplace to beat that? Bank interest rates are well below that level (well, at least at any bank that I would consider banking with). The entire Treasury bond curve is below that level. Stocks have been spectacular since March, but at these levels, that's a lot of risk to take on using your mortgage money.

 

In the end, I decided that buying my apartment outright (i.e., no mortgage) was the best option. So I did. Obviously, that's not a choice that many people have, at least not right away, but I am a firm believer in living with as little debt as possible. I absolutely do not consider mortgage debt to be an exception to that rule (the only possible exception would be self-liquidating debt tied to a productive business). I firmly believe that most people would be better off paying down their mortgages if they can, instead of using that money to overspend or to speculate in riskier assets.

 

beautifully said

[greggy]

I'm mortgage free.

 

+1 and better still, i actually own a property

[fantastic_four]

I bought my apartment in 2007 when mortgage rates were maybe around 6.25%. Some people like my mom said I should take out a mortgage for the "tax write-off"

 

I never understood this line of thinking either. It makes sense only if you can finish the "for the tax write off" bit with the place you're going to put your mortgage money into that's going to beat 6.25%. Particularly true given that even if you have a place, your tax write-off gets offset when you pay your income tax on the investment, which means you have to clear 6.25% by at least a point or so to make enough for it to be worthwhile, unless you're somehow selling tax-free.

 

 

Even at a tax-advantaged 4.50% today, what are you going to buy in the current marketplace to beat that?

 

I suppose it's never a good idea for anyone who thinks they know the answer to that question to actually answer it without diluting the pool...and that's more true today than ever.

[500Club]

People with the argument that you need the write off doesnt wash when you factor in what you paid out in interest and what you get back. Been mortgage free for eight or nine years. F-ck giving the bank your money.

 

(thumbs u

 

Spot on. Thinking of the mortgage deduction as a tax write-off is absolutely the wrong way to think about it. All the "deduction" is doing is lowering your effective borrowing cost. I bought my apartment in 2007 when mortgage rates were maybe around 6.25%. Some people like my mom said I should take out a mortgage for the "tax write-off" (never mind that I would be paying out 6.25% before getting that write-off!) Some slightly more sophisticated people were saying take out a mortgage because you could beat that rate in the stock market or elsewhere. Um, right, really great advice that was, watching the market tank by 50% while continuing to have to pay interest on the full amount borrowed. :doh:

 

Even at a tax-advantaged 4.50% today, what are you going to buy in the current marketplace to beat that? Bank interest rates are well below that level (well, at least at any bank that I would consider banking with). The entire Treasury bond curve is below that level. Stocks have been spectacular since March, but at these levels, that's a lot of risk to take on using your mortgage money.

 

In the end, I decided that buying my apartment outright (i.e., no mortgage) was the best option. So I did. Obviously, that's not a choice that many people have, at least not right away, but I am a firm believer in living with as little debt as possible. I absolutely do not consider mortgage debt to be an exception to that rule (the only possible exception would be self-liquidating debt tied to a productive business). I firmly believe that most people would be better off paying down their mortgages if they can, instead of using that money to overspend or to speculate in riskier assets.

 

beautifully said

 

Even more beautiful for us Canucks, as there is no mortgage write-off. And, as Jamie notes, you have to get an after-tax return to match the mortgage rate. It's not enough to have your investment just match your mortgage rate.

[BronzeBruce13]

The prices on a lot of my bronze 9.8s and especially my mint books has jumped so much over the past couple years that I have actually been thinking that I should sell. Not because of any market timing belief but because of diversification. My collection has become a sizeable "asset" even though I always thought of it has a hobby and something fun. Whenever any of my stocks increase to the point that I am "overweight" in an area, I sell and move the money into something that I feel is undervalued. And I am feeling some intellectual pressure to do the same with my comics. Anybody else thinking along those lines?

 

I think you should unload that cumbersome Amazing Adventures 11 9.8 White (at purchase price) to the original owner. Holding it could be very risky.

 

[BucOne-migration]

Signing the papers today to refinance my mortgage (for the sixth time in this house). 4.375 fixed for 15 years, will be paid off in eight. Take that, global financial markets!

 

they can't give houses away in Chicago. Someone finally sold a 9 bedroom for 15K

 

What a bunch of BS. Nine bedroom what? Cardboard box?

 

 

I read this yesterday on Yahoo, recently had only 100 bidders show up for 1,000 lots listed. There was a home listed for only $1,000. I believe these homes were on the South side of Chicago in a bad area, but still cheap.

 

Someone bought a 1 bedroom, 1 bath condo in a great neighborhood for $100k, original asking price $166k.

 

So yes Chicago real estate is falling fast.

 

 

[kapowcat-migration]

A excellent post,many brain cells at work.(F.F.) you scare me in a good way! Best Regards to all my fellow collectors.Fernando

[Sqeggs]

People with the argument that you need the write off doesnt wash when you factor in what you paid out in interest and what you get back. Been mortgage free for eight or nine years. F-ck giving the bank your money.

 

(thumbs u

 

Spot on. Thinking of the mortgage deduction as a tax write-off is absolutely the wrong way to think about it. All the "deduction" is doing is lowering your effective borrowing cost. I bought my apartment in 2007 when mortgage rates were maybe around 6.25%. Some people like my mom said I should take out a mortgage for the "tax write-off" (never mind that I would be paying out 6.25% before getting that write-off!) Some slightly more sophisticated people were saying take out a mortgage because you could beat that rate in the stock market or elsewhere. Um, right, really great advice that was, watching the market tank by 50% while continuing to have to pay interest on the full amount borrowed. :doh:

 

Even at a tax-advantaged 4.50% today, what are you going to buy in the current marketplace to beat that? Bank interest rates are well below that level (well, at least at any bank that I would consider banking with). The entire Treasury bond curve is below that level. Stocks have been spectacular since March, but at these levels, that's a lot of risk to take on using your mortgage money.

 

In the end, I decided that buying my apartment outright (i.e., no mortgage) was the best option. So I did. Obviously, that's not a choice that many people have, at least not right away, but I am a firm believer in living with as little debt as possible. I absolutely do not consider mortgage debt to be an exception to that rule (the only possible exception would be self-liquidating debt tied to a productive business). I firmly believe that most people would be better off paying down their mortgages if they can, instead of using that money to overspend or to speculate in riskier assets.

 

beautifully said

 

Even more beautiful for us Canucks, as there is no mortgage write-off. And, as Jamie notes, you have to get an after-tax return to match the mortgage rate. It's not enough to have your investment just match your mortgage rate.

 

The other point many people seem to miss is that you get the mortgage deduction only if you itemize. If you don't have many other itemized deductions and you would otherwise have taken the standard deduction, then the mortgage deduction (and any property tax deductions) effectively only kicks in for amounts above the standard deduction. If you run the numbers, this reduces the importance of the mortgage deduction for a lot of people.