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?

"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

On Thu, 17 Sep 2009 15:48:45 -0400, 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.

It is really even simpler than that. You are betting CD vs real
estate. Personally I like the security of not having a mortgage. One
less bill I have to pay.

I think a lot is psychological. I also like the idea of not sending
the money to the mortgage company each month. I'd rather be sending it
to my savings or investments.

'Course, I'd probably end up with a new motorcycle!
--

John H

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

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.

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

JohnH wrote:
On Thu, 17 Sep 2009 15:48:45 -0400, 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.
It is really even simpler than that. You are betting CD vs real
estate. Personally I like the security of not having a mortgage. One
less bill I have to pay.

I think a lot is psychological. I also like the idea of not sending
the money to the mortgage company each month. I'd rather be sending it
to my savings or investments.

'Course, I'd probably end up with a new motorcycle!
--

John H

German this time?

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.

"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.

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.