On Tuesday, November 21, 2017 at 11:58:31 AM UTC-5, wrote:
On Tue, 21 Nov 2017 11:17:22 -0500, wrote:

Normal people should not be going into retirement with debt unless
they have the liquid assets to pay that debt off ... and that is rare.

Personally I like the idea that I can cut back on the luxuries I pay
cash for and live very cheap if I need to because I don't owe anyone
any money.

===

Everyone's situation is different. I have no problem carrying debt
forever as long as I can earn a higher return somewhere else.
Additionally, the government subsidizes home mortgages via the tax
deduction on interest paid.

Yeah, we financed for 15 years and are about 4 years away from paying it off. The interest deduction has about gone away, and the tax man is eating us alive. Even with losing the state tax deduction the higher standard deduction in the new bill will help me out somewhat.

What I'm looking at right now is restructuring my retirement accounts to prepare for that time. As part of our company's 401k, I have free access to a financial planner, but he comes across as a salesman, and he's selling the market. Spends all of his time explaining how the market is smart, it always recovers even if there's a correction, blah, blah. Fortunately, we have a friend who manages investments (including one of mine), and I trust him. He's next on the list to sit down with.

On Tue, 21 Nov 2017 11:14:18 -0500, John H
wrote:

My Dutch friend's grandson gets government student loans, at zero percent interest, and promptly
puts the money in an interest earning account. The interest rate may change next year, but right now
Dutch college students are getting a pretty good deal.

I have some money in "interest bearing accounts" but the interest is a
quarter of a percent or something. Wheee!

On Tue, 21 Nov 2017 11:17:22 -0500, wrote:

On Tue, 21 Nov 2017 09:13:27 -0500,
wrote:

On Mon, 20 Nov 2017 22:15:21 -0500, wrote:

On Mon, 20 Nov 2017 19:12:12 -0500, Alex wrote:



Too many people spend every dime they make, don't take advantage of
401K's, and wonder how they are going to retire on SS alone.

I also wonder how anyone over 50 or so with a mortgage and car
payments ever expects to retire. I paid cash for my house here in 84
and I paid off my mortgage on the condo in 1990. I haven't had a car
payment since the Nixon administration. In spite of all of that I
sound like a pauper when I hear how much money you guys make.


===

Smart borrowing, i.e., borrowing to buy an appreciating asset is good
business when you can earn a higher return than your after tax
interest cost. Even if you can afford to pay cash, borrowing makes
sense if you can invest your cash at a higher return.

That probably describes a house, particularly a second home or a
rental but not necessarily your residence unless you want to sell it
and downsize or live in your car in your old age.
Your home is not your piggy bank., We should have learned that a
decade ago.
Cars, boats and just about every other toy is not going to be an
appreciating asset. It is just an expense and you do not want that to
be an expense that you also pay interest on. Rationalizing that you
invested the money you spent on your toys and the interest is zero
only says you have more money than you need. That does not describe
most Americans and if the **** does hit the fan, as can happen to the
retired, you lose your toys. If that is your car, it is a significant
loss.
Normal people should not be going into retirement with debt unless
they have the liquid assets to pay that debt off ... and that is rare.

Personally I like the idea that I can cut back on the luxuries I pay
cash for and live very cheap if I need to because I don't owe anyone
any money.

Downsizing wouldn't bother me a bit! I'd love to have a smaller house and a much smaller, or
non-existent yard. I could find something to spend the extra on, even if it's just grandkids'
education.

On Tue, 21 Nov 2017 11:50:40 -0500, wrote:

On Tue, 21 Nov 2017 11:14:18 -0500, John H
wrote:

On Tue, 21 Nov 2017 09:13:27 -0500, wrote:

On Mon, 20 Nov 2017 22:15:21 -0500, wrote:

On Mon, 20 Nov 2017 19:12:12 -0500, Alex wrote:



Too many people spend every dime they make, don't take advantage of
401K's, and wonder how they are going to retire on SS alone.

I also wonder how anyone over 50 or so with a mortgage and car
payments ever expects to retire. I paid cash for my house here in 84
and I paid off my mortgage on the condo in 1990. I haven't had a car
payment since the Nixon administration. In spite of all of that I
sound like a pauper when I hear how much money you guys make.


===

Smart borrowing, i.e., borrowing to buy an appreciating asset is good
business when you can earn a higher return than your after tax
interest cost. Even if you can afford to pay cash, borrowing makes
sense if you can invest your cash at a higher return.

---
This email has been checked for viruses by AVG.
http://www.avg.com

My Dutch friend's grandson gets government student loans, at zero percent interest, and promptly
puts the money in an interest earning account. The interest rate may change next year, but right now
Dutch college students are getting a pretty good deal.

===

That's a perfect example of smart borrowing as long as the funds are
invested safely, the interest rate is guaranteed and the loan can be
repaid without penalty. Everyone's situation and tolerance for risk
is different however.

I'm surprised the government lets them get away with it, but more power to him. He's working part
time to pay for his college which is why he can do it. Industrious young guy.

On 11/21/2017 3:29 PM, John H wrote:
On Tue, 21 Nov 2017 11:50:40 -0500, wrote:

On Tue, 21 Nov 2017 11:14:18 -0500, John H
wrote:

On Tue, 21 Nov 2017 09:13:27 -0500, wrote:

On Mon, 20 Nov 2017 22:15:21 -0500, wrote:

On Mon, 20 Nov 2017 19:12:12 -0500, Alex wrote:



Too many people spend every dime they make, don't take advantage of
401K's, and wonder how they are going to retire on SS alone.

I also wonder how anyone over 50 or so with a mortgage and car
payments ever expects to retire. I paid cash for my house here in 84
and I paid off my mortgage on the condo in 1990. I haven't had a car
payment since the Nixon administration. In spite of all of that I
sound like a pauper when I hear how much money you guys make.


===

Smart borrowing, i.e., borrowing to buy an appreciating asset is good
business when you can earn a higher return than your after tax
interest cost. Even if you can afford to pay cash, borrowing makes
sense if you can invest your cash at a higher return.

---
This email has been checked for viruses by AVG.
http://www.avg.com

My Dutch friend's grandson gets government student loans, at zero percent interest, and promptly
puts the money in an interest earning account. The interest rate may change next year, but right now
Dutch college students are getting a pretty good deal.

===

That's a perfect example of smart borrowing as long as the funds are
invested safely, the interest rate is guaranteed and the loan can be
repaid without penalty. Everyone's situation and tolerance for risk
is different however.

I'm surprised the government lets them get away with it, but more power to him. He's working part
time to pay for his college which is why he can do it. Industrious young guy.



That's an interesting system. If I recall correctly government student
loans or government backed student loans in the USA are paid to the
college/university who then disperses the funds per semester or other
schedule they may have.

On Tue, 21 Nov 2017 11:58:26 -0500,
wrote:

On Tue, 21 Nov 2017 11:17:22 -0500, wrote:

Normal people should not be going into retirement with debt unless
they have the liquid assets to pay that debt off ... and that is rare.

Personally I like the idea that I can cut back on the luxuries I pay
cash for and live very cheap if I need to because I don't owe anyone
any money.

===

Everyone's situation is different. I have no problem carrying debt
forever as long as I can earn a higher return somewhere else.
Additionally, the government subsidizes home mortgages via the tax
deduction on interest paid.

Let me get this right. You say it is a good deal to pay a bank
interest so you can deduct 20% of it and rationalize it because you
have an investment that you are paying a 20% tax on.
At best it is a wash, assuming you actually make more on your money
than the bank.
Whatever makes you feel better I suppose. I like the idea that if the
**** hits the fan (investments collapse, pensions fail etc) I don't
owe anyone any money.
Owing money may be good if you don't plan on living much longer or if
you think we will have hyper inflation. I just do not want to be
rooting for either of those things.

On Tue, 21 Nov 2017 15:28:38 -0500, John H
wrote:

On Tue, 21 Nov 2017 11:17:22 -0500, wrote:

On Tue, 21 Nov 2017 09:13:27 -0500,
wrote:

On Mon, 20 Nov 2017 22:15:21 -0500, wrote:

On Mon, 20 Nov 2017 19:12:12 -0500, Alex wrote:



Too many people spend every dime they make, don't take advantage of
401K's, and wonder how they are going to retire on SS alone.

I also wonder how anyone over 50 or so with a mortgage and car
payments ever expects to retire. I paid cash for my house here in 84
and I paid off my mortgage on the condo in 1990. I haven't had a car
payment since the Nixon administration. In spite of all of that I
sound like a pauper when I hear how much money you guys make.


===

Smart borrowing, i.e., borrowing to buy an appreciating asset is good
business when you can earn a higher return than your after tax
interest cost. Even if you can afford to pay cash, borrowing makes
sense if you can invest your cash at a higher return.

That probably describes a house, particularly a second home or a
rental but not necessarily your residence unless you want to sell it
and downsize or live in your car in your old age.
Your home is not your piggy bank., We should have learned that a
decade ago.
Cars, boats and just about every other toy is not going to be an
appreciating asset. It is just an expense and you do not want that to
be an expense that you also pay interest on. Rationalizing that you
invested the money you spent on your toys and the interest is zero
only says you have more money than you need. That does not describe
most Americans and if the **** does hit the fan, as can happen to the
retired, you lose your toys. If that is your car, it is a significant
loss.
Normal people should not be going into retirement with debt unless
they have the liquid assets to pay that debt off ... and that is rare.

Personally I like the idea that I can cut back on the luxuries I pay
cash for and live very cheap if I need to because I don't owe anyone
any money.

Downsizing wouldn't bother me a bit! I'd love to have a smaller house and a much smaller, or
non-existent yard. I could find something to spend the extra on, even if it's just grandkids'
education.

You sound like a condo man. I thought about it for about a nanosecond
when I had both but I decided to go with the house. I want more space
around me and a lot more privacy.
Irma did me a pretty big favor because it allowed me to appropriate
the FPL right of way behind the house and effectively triple the size
of my back yard although I was using a lot of it anyway.
FPL pretty much abandoned accessing that area when the gopher
tortoises took it over. It is a briar patch just north of me now that
a rabbit might have trouble getting through but between Irma and I
just hacking away at it, the whole area under the power lines is
pretty clear behind my house. I have been working on the exotic
vegetation from here to the river (another 250-300 feet) for years and
that is pretty clear too. I am thinking it will make a nice run for
the dog. There is a canal on both sides so it is really only
accessible from my yard.
I am going up there with my weed eater some day soon and start
whacking away at that area. It will give me an extra acre, tax free
;-)
Most of my neighbors up the street before the berm starts have been
using FPL as their own for decades. FPL says, as long as they do not
block the access, they don't care. It is about two houses up that have
let it go and in the last 3 or 4 years it has really gotten ugly.
Nobody comes down here anymore. We used to get hikers but the briars
stop them now. I may go north and fertilize the sticker bushes ;-)
I should have my niece send me some good old Southern Maryland
blackberry bushes. That is like razor coil.

On Tue, 21 Nov 2017 16:02:40 -0500, wrote:

On Tue, 21 Nov 2017 11:58:26 -0500,
wrote:

On Tue, 21 Nov 2017 11:17:22 -0500, wrote:

Normal people should not be going into retirement with debt unless
they have the liquid assets to pay that debt off ... and that is rare.

Personally I like the idea that I can cut back on the luxuries I pay
cash for and live very cheap if I need to because I don't owe anyone
any money.

===

Everyone's situation is different. I have no problem carrying debt
forever as long as I can earn a higher return somewhere else.
Additionally, the government subsidizes home mortgages via the tax
deduction on interest paid.

Let me get this right. You say it is a good deal to pay a bank
interest so you can deduct 20% of it and rationalize it because you
have an investment that you are paying a 20% tax on.
At best it is a wash, assuming you actually make more on your money
than the bank.
Whatever makes you feel better I suppose. I like the idea that if the
**** hits the fan (investments collapse, pensions fail etc) I don't
owe anyone any money.
Owing money may be good if you don't plan on living much longer or if
you think we will have hyper inflation. I just do not want to be
rooting for either of those things.


===

Like I said, everyone's situation is different. We will end up with
higher inflation at some point, the only question is when and how
much.

---
This email has been checked for viruses by AVG.
http://www.avg.com

On Tue, 21 Nov 2017 18:38:19 -0500,
wrote:

On Tue, 21 Nov 2017 16:02:40 -0500, wrote:

On Tue, 21 Nov 2017 11:58:26 -0500,
wrote:

On Tue, 21 Nov 2017 11:17:22 -0500, wrote:

Normal people should not be going into retirement with debt unless
they have the liquid assets to pay that debt off ... and that is rare.

Personally I like the idea that I can cut back on the luxuries I pay
cash for and live very cheap if I need to because I don't owe anyone
any money.

===

Everyone's situation is different. I have no problem carrying debt
forever as long as I can earn a higher return somewhere else.
Additionally, the government subsidizes home mortgages via the tax
deduction on interest paid.

Let me get this right. You say it is a good deal to pay a bank
interest so you can deduct 20% of it and rationalize it because you
have an investment that you are paying a 20% tax on.
At best it is a wash, assuming you actually make more on your money
than the bank.
Whatever makes you feel better I suppose. I like the idea that if the
**** hits the fan (investments collapse, pensions fail etc) I don't
owe anyone any money.
Owing money may be good if you don't plan on living much longer or if
you think we will have hyper inflation. I just do not want to be
rooting for either of those things.


===

Like I said, everyone's situation is different. We will end up with
higher inflation at some point, the only question is when and how
much.

I suppose it all depends on your philosophy. I bought my last new car
in 1970 (a Jeep) and because I traded a paid off Corvette I was able
to pay that off in about 16 months. I kept making the payments to
myself with the objective of being able to pay cash for my next car
but I got the Gremlin for free and I drove that for a while, then a
used van that I put 100k miles on. By then my banked "car payments"
were enough to buy the condo that was rented and I was rolling. I paid
off the condo in 12 years and that was my last debt.
I will say a free "seminar" (AKA sales call from a broker) got me on
the way to prosperity at just about the time when I was thinking about
getting something new to replace my Jeep. He convinced me there were
better ways to invest my "car" money than a car. I never bought a new
one after that. I don't think people realize how much that saves you,
compounded over 40 years or more.
I screw up a new car so fast it is a waste of money anyway. You saw
what I drive (the green one and the mostly red one). They are both
just a piece of metal that you can ride in to me.

wrote:
On Tue, 21 Nov 2017 11:14:18 -0500, John H
wrote:

My Dutch friend's grandson gets government student loans, at zero percent interest, and promptly
puts the money in an interest earning account. The interest rate may change next year, but right now
Dutch college students are getting a pretty good deal.
I have some money in "interest bearing accounts" but the interest is a
quarter of a percent or something. Wheee!


Synchrony Bank is paying about 1.3% interest on accounts with no minimum.