What To Do?

[mjarrels]

I have had it with the economy ups and downs... pulled the trigger yesterday on selling some stocks... With the potential of capital gains going up two or three times the present rate, decided to sell some shares. What should I do?

a. A new corvette...
b. Big new cab tractor...
c. New Mercedes...
d. Pay off the morgage 20 years early...

Anwser is D... Morgage is going away in September... Both houses and garages, barns, and all other buildings are going to be paid for in about a week... Might have a few dollars left over for a couple more boxes of .45, 9MM, 7MM and lots of shotgun shells! Can't deduct the morgage interest anymore... What good is it to carry a morgage at 6.25%! Just need to set up a new escrew account for taxes and insurance.

mark

 

[kenmac]

D is a very good answer. Anytime you can pay off anything go for it. I just don't like payments to anyone

 

[mjarrels]

For you yong guys out there... save... save... and save... No coffee at 7-11 or starbucks each morning... cost big bucks over the years at $4.00 a day... its the little things that add up... I'm going to be debt free of two homes (many outbuildings) at (just turned 54) and I am loving it... (bored sometimes)... Don't believe the Clintons who spend $400,000 dollars for shrimp cocktails for a ralley...

mark

 

[dooleysm]

Save yourself some more money and pay your taxes and insurance in cash when they are due, not through an escrow account.

 

[MossRoad]

...What good is it to carry a morgage...

We carry a home equity loan, which is a mortgage, only because we get property tax breaks for "homestead" exemption on a first home. We don't carry much of a balance on it and the interest that we do pay on it each year is about 1/4 of what the property taxes would be increased by if we didn't have that mortgage. So, we use it to finance used cars, home repairs, etc... and pay it off right away just keeping a small balance to keep it open.

 

[jinman]

For you yong guys out there... save... save... and save... No coffee at 7-11 or starbucks each morning... cost big bucks over the years at $4.00 a day... its the little things that add up... I'm going to be debt free of two homes (many outbuildings) at (just turned 54) and I am loving it... (bored sometimes)... Don't believe the Clintons who spend $400,000 dollars for shrimp cocktails for a ralley...

mark

It doesn't hurt to also be retired from the U.S. Navy, eh?

Saving is HUGE! Also, good planning and responsible buying as you described go a long way. The only negative thing about paying off a mortgage is if you are making a higher rate of return on your investments than the interest on your mortgage. That doesn't mean that all years you will have higher return, but if you invested in natural energy funds during the last few years, you'd want to be careful to sell and lock in your profits or hold and look for even more gains over the long haul. If you can't sleep at night because of fears of the volatile nature of the stock market, by all means take your profits and sleep well.

 

[EddieWalker]

Congratulations!!!!!!

A few years ago, I was able to do the same thing by selling most of the land that I had bought with a partner. I bought him out with the sale of that land, paid off the note on the land and had a little cash left over to build my house. I could have used that cash as a down payment on a loan for a nice house, but chose to build small and not have any debt. This has turned out to be one of the smartest things that I ever did. Not having a monthly mortgage has allowed me to go into business for myself and not have to stress about making a monthly payment. There have been several months when I didn't make enough money to have made those payments when I was first starting out, and of course, there is the fear that it could always happen again. I have a savings account that I put some into all year long to have enough to cover my taxes at the end of the year and a little left over for emergancies.

I also have a credit card for emergancies, but it took me years to learn to not use it for anything but an emergancy. That was harder then quiting tobacco!!!!

Now I spend most of what I make on the land and my dream of developing it.

Eddie

 

[dooleysm]

Regarding the tax exemptions, there are actually two that we get, a mortgage exemption and a homestead exemption. One is much larger than the other, but I forget which. I think you can claim the homestead exemption if it is your primary residence, and the mortgage exemption is the one that is available if you carry a mortgage on the property (and is likely tied to it being your primary residence too).

Anyway, I talked to my folks about it, and they had both exemptions for the entire time they had the home I grew up in, even for years after they paid off their mortgage. I don't think there is any communication between the banks and the assessor's office regarding who has mortgages on what piece of property, so there is no way for the government to know that you have paid off your mortgage.

I've talked to another guy that claims you can open a home equity line of credit and still qualify for the mortgage exemption, not even using any of the credit, just by having it open.

Our current plan is to have to look into these options in 2015.

 

[Podunkadunk]

It doesn't hurt to also be retired from the U.S. Navy, eh?

 

[riptides]

I have had it with the economy ups and downs... pulled the trigger yesterday on selling some stocks... With the potential of capital gains going up two or three times the present rate, decided to sell some shares. What should I do?

a. A new corvette...
b. Big new cab tractor...
c. New Mercedes...
d. Pay off the morgage 20 years early...

Anwser is D... Morgage is going away in September... Both houses and garages, barns, and all other buildings are going to be paid for in about a week... Might have a few dollars left over for a couple more boxes of .45, 9MM, 7MM and lots of shotgun shells! Can't deduct the morgage interest anymore... What good is it to carry a morgage at 6.25%! Just need to set up a new escrew account for taxes and insurance.

mark

hey good for you.

A lot of people have no choice but to carry mortgages, and in this current economy that really sucks.

Saving is not going to matter when your assets are all underwater. The best thing you can do pay off your debt as quickly as possible.