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Finance question..
On Thu, 17 Sep 2009 15:10:39 -0400, JohnH
wrote: Thanks, Wayne. Right now I'm not interested in putting more into the market. This is purely a CD vs mortgage decision. Why a CD, what could be more secure than inflation protected treasury notes? |
Finance question..
"JohnH" wrote in message
... On Thu, 17 Sep 2009 06:07:37 -0700, "nom=de=plume" wrote: "BAR" wrote in message om... JohnH wrote: Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage rate is 5.25%. New CD rates - 3% for five years, 4% for seven years. What would you do? Stock market exposure is high enough. Will be at the golf course pondering the situation. Back later. No, I don't want to buy a red barn. Do you have taxable income? Do you itemize? The 5.25% mortgage is not really 5.25%, it could be as low as 3.5% when taxes are taken into account. It is easier to cash in a CD for unexpected expenses than it is to get a mortgage on a house to raise the money that your CD currently has. Just some thoughts. It's hard to make a judgement without knowing the full story. I'd suggest a CPA tax accountant. You could also talk to a Fidelity consultant, although they are of limited value when making actual recommendations. I wouldn't rush to pay off an affordable mortgage, but you could make an extra payment to pay it off faster. Well, I don't ask the 'financial manager' types, 'cause they'd tell me to invest the CD proceeds in stocks, or whatever. The CPA idea is good, but many of the folks here are much better. -- John H Anonymously on Usenet? Well, you pays your money, you makes your choice. -- Nom=de=Plume |
Finance question..
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Finance question..
On Thu, 17 Sep 2009 16:19:23 -0400, Wayne.B
wrote: On Thu, 17 Sep 2009 15:10:39 -0400, JohnH wrote: Thanks, Wayne. Right now I'm not interested in putting more into the market. This is purely a CD vs mortgage decision. Why a CD, what could be more secure than inflation protected treasury notes? No reason. Lack of knowledge about the notes. I'll go back to that site and learn more. When I first looked, I thought it was some sort of equity. -- John H |
Finance question..
On Thu, 17 Sep 2009 18:09:42 -0400, JohnH
wrote: No reason. Lack of knowledge about the notes. I'll go back to that site and learn more. When I first looked, I thought it was some sort of equity. There are two ways to buy inflation protected treasuries. You can buy the actual note like any other government debt instrument, or you can buy an exchange traded fund (ETF - TIP) that holds them. TIP is more convenient for most people since it trades like a stock even though it is actually a fund. Your stock broker can give you more information. |
Finance question..
On Thu, 17 Sep 2009 19:28:05 -0400, Wayne.B
wrote: On Thu, 17 Sep 2009 18:09:42 -0400, JohnH wrote: No reason. Lack of knowledge about the notes. I'll go back to that site and learn more. When I first looked, I thought it was some sort of equity. There are two ways to buy inflation protected treasuries. You can buy the actual note like any other government debt instrument, or you can buy an exchange traded fund (ETF - TIP) that holds them. TIP is more convenient for most people since it trades like a stock even though it is actually a fund. Your stock broker can give you more information. Thanks, I'll give him a call next week. We're doing Gettysburg this weekend. -- John H |
Finance question..
wrote in message ... On Thu, 17 Sep 2009 06:53:29 -0400, JohnH wrote: Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage rate is 5.25%. New CD rates - 3% for five years, 4% for seven years. What would you do? Stock market exposure is high enough. Will be at the golf course pondering the situation. Back later. No, I don't want to buy a red barn. I think BAR put his finger on it. If you itemize it is probably a wash. Otherwise I would pay off the mortgage. I would buy some good dividend paying stocks. Or General Obligation Muni Bonds. Depending where you live you can get 5+ percent bonds. Not Revenue bonds, but G.O's. |
Finance question..
"Wayne.B" wrote in message ... On Thu, 17 Sep 2009 06:53:29 -0400, JohnH wrote: Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage rate is 5.25%. New CD rates - 3% for five years, 4% for seven years. What would you do? Stock market exposure is high enough. Will be at the golf course pondering the situation. Back later. No, I don't want to buy a red barn. There is a strong probability that we will be heading into a highly inflationary economy some time in the next few years. If so, 5% mortgages of any kind will be totally unobtainable and cash will be trash. I'd consider splitting the cash between two exchange traded funds: TIP (Inflation protected treasury notes), and GLD, a gold fund. For high current income and inflation protection consider LINE (Linn Energy), currently yielding 11.6% and with a *lot* of oil in the ground. http://finance.yahoo.com/q?s=TIP http://finance.yahoo.com/q?s=gld http://finance.yahoo.com/q?s=LINE I was going to have him look at LINE also, but he said no stocks. |
Finance question..
On Thu, 17 Sep 2009 21:37:53 -0700, "Bill McKee"
wrote: I was going to have him look at LINE also, but he said no stocks. I know but I really like the company and it's been good to me - may buy more before inflation really kicks in. |
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