Posted by Bill Jacobsen on September 24, 2008 at 10:28:08:
I will give you my opinion. This process gives me peace of mind, works 100% of the time but does not necessarily make one rich.
Assuming you have a retirement plan that you are funding, pay off your house and only buy real estate that you can pay for with cash. This means you may have to sell some of your real estate but will probably increase your monthly cash flow.
Remember, this is only my humble opinion and is given realizing that I don’t know your entire financial situation.
Posted by Steve on September 24, 2008 at 03:44:55:
Were do you put your cash?
We just sold an second home and came out with close to $500,000.
Should I pay off my house?
or some rental properties?
or some land we own?
I am not a stock market type so that is out of the question.
The rentals are at 6% (5 rentals one paid for)
the land is at 7% ($400,000 balance)
and our house is at 5.5% ($340,000 balance)
From a return on investment I would want to pay off the Land interest since it is the highest and I cannot deduct it from my income.
From a liability view I would pay off the house since it is more secure from lawsuits.
What would you do?
Thanks
Steve K.
Posted by Sailor on September 30, 2008 at 17:20:16:
Banks are ca$h poor these days. I’d sit down in front of my home mortgage holder & ask how much of a discount I’d get for an early pay-off. Compare that w/the doscounts your toher mortgage holders would grant.
I have always believed that folks should own their homes outright as part of their retirement plan, but you have a large mortgage balance. You might consider down-sizing if your home is large. If you don’t have a long-term financial plan yet, this is the perfect time to make one. Remember, you need to figure out ways to $ave this money, not ways to spend it! Remember, too, to not keep it in accounts not fully FDIC insured, & these days it is especially important to do biz w/more than one bank. Even if an account is fully insured, you might not have quick access. For info, go to:
Posted by John Merchant on September 25, 2008 at 08:34:34:
In any recession or depression, bargains abound so I’d hold your cash close and watch and wait for bargain opportunities which you will see.
Bank lending is tightening up, jobs are folding, homeowners are having trouble staying in their new big dream houses, etc. so just watch your own geo area for those opps where cash is king and rules the day.