Financial question...
 

"D.Duck" wrote in message
...


Not to worry though, according the Mayan calendar these problems will all
be a mute point in 2012. 8)


Yep.

Enjoy it while you can.

Eisboch

Financial question...
 

On Wed, 20 Aug 2008 21:53:28 GMT, Bullschitter
wrote:

Clear the debt, use your fromer house payments to rebuild your stocks.
That would be the idea. Or start giving the money to grandkids.
--
** Good Day! **

John H

Financial question...
 

On Wed, 20 Aug 2008 18:39:32 -0400, BAR wrote:

John H. wrote:
On Wed, 20 Aug 2008 17:30:52 -0400, "D.Duck" wrote:

"John H." salmonremovebait@gmaildotcom wrote in message
...
On Wed, 20 Aug 2008 17:11:53 -0400, "Eisboch" wrote:

"Vic Smith" wrote in message
...
On Wed, 20 Aug 2008 16:33:11 -0400, John H.
salmonremovebait@gmaildotcom wrote:

On Wed, 20 Aug 2008 15:28:48 -0500, Vic Smith
wrote:

On Wed, 20 Aug 2008 16:16:32 -0400, John H.
salmonremovebait@gmaildotcom wrote:

Would it be a wise move to take out a loan on your home to buy stocks?

Would it be a wise move to sell stocks to pay off a loan on your home?
A lot has to do with your personal view on risk and holding debt.
Personally I hate any debt.
Since *nobody* can accurately predict what the stocks will do, it
comes down to that.
Well, I guess that was no help at all.

--Vic
When I bought the house, I was holding a lot of debt. I'm still holding
some debt on the house.
Taxes are tricky. I'd love to knock off the rest of my house debt,
but the tax hit in cashing in a CD doesn't give advantage.
If it was less than a grand costs I'd do it anyway, just to clear the
debt. Like I said, personal view.

--Vic

Having spent most of my life in debt, I don't understand why anyone wants
or needs it (except banks) once they are in a position of paying it off.

We own three houses and hold a mortgage for a forth (sold it and are
acting
as the "bank").

We don't have any mortgage payments or debt. We pay credit card balances
off every month.

I've been advised that's bad because we don't get any tax advantages.

But, to me, it isn't worth it. Why pay somebody interest, just to get a
write off on income taxes that does not equal the interest paid?

Eisboch


I've never understood the advice to pay interest for the tax break. Where
is the break in giving away $1 to get 30 cents back? Seems like 70 cents
got lost there somewhere.

I can understand holding debt while building a savings account, but once
the cushion exists, I can't see the reason for it.
--
** Good Day! **

John H
You're on the right track. When your nest egg is secured payoff all debt as
soon as possible.

The only debt I have now is to Circuit City for the HDTV we recently
purchased. Reason, interest free for two years. The money stays in the
money market account (earning interest) and is extracted 100 bux at a time
each month.


That's the way to do it. Hell, I put our travel trailer on VISA because I
get a 1.25% rebate on the purchases. The dealer didn't like it a bit,
'cause I didn't tell him until after we'd negotiated a price, signed the
papers, and he said, "How would you like to finance this?"

I have a credit card that has a 5.5% interest rate. Same rate as my home
equity line of credit.

I don't know what the rate is on my card. Never paid any interest on it.

Financial question...
 

On Wed, 20 Aug 2008 16:40:58 -0400, John H.
salmonremovebait@gmaildotcom wrote:

On Wed, 20 Aug 2008 20:34:15 GMT, Short Wave Sportfishing
wrote:

On Wed, 20 Aug 2008 16:16:32 -0400, John H.
salmonremovebait@gmaildotcom wrote:

Would it be a wise move to take out a loan on your home to buy stocks?

No.

Would it be a wise move to sell stocks to pay off a loan on your home?

No.

You're sounding too much like McCain. A little explanation would be muchly
appreciated.

When I think of the future, the stock market, I see doom and gloom
because of rising oil demand and reduced oil supply. I see very few
businesses that aren't affected by oil costs. The market has not been
performing all that well, and I don't see anything on the horizon that may
help it. It's for damn sure the election of Obama wouldn't be a help to it.

Economies run in cycles and this is a cycle is which the wise choice
is to just sit on what you have and accept that things will improve in
time.

Europe is tanking, there are signs that India and China are on the
cusp of a major recession cycle and the only economy that still can
hold it's own against changing economic climates as evidenced by the
fact that we're still not bottoming out with a relatively strong GDP
compared to historical economic patterns. This economy is positioned
to take advantage of the global down turn in economic activity.

Oil is still unsupportable at this level and will return to a more
rational and malleable $70-80/bbl range - perhaps not as quickly as I
thought, but certainly by December rather than October.

The dollar has shown signs of strength against the Euro and the Pound
- it will quickly return to the harbor of refuge status because
Europe's economies are in a bind and cannot lower interest rates which
would cause major fluctuation with upward inflationary pressure if
they tried - and their inflation rate is currently hovering around 11%
in aggregate. Twenty five point basis cut results in another 1.6%
rise in inflation year-over-year. Can't do it.

Which means that we're in good shape nominally.

In uncertain times, at 5.18% compared to the running daily average as
of today of 6.93%, you've got a loan with cheap money at a rate that
won't be seen for another 15/20 years.

This does not mean that you should not take profits where you can and
if inclined, instead of investing them back, take a portion and pay
down house principle - that is always a smart idea. The rest can be
reinvested short term outside of securities. The key is to do it over
time with a long range goal rather than dumping everything. Be
selective.

Lastly, understand that the big money is still sitting on the
sidelines neither selling or buying and holding what they have. That
should tell you something. Keeping yourself positioned and your
powder dry is the best bet.

Help out any? :)

Financial question...
 

"D.Duck" wrote in message
...

"John H." salmonremovebait@gmaildotcom wrote in message
...
On Wed, 20 Aug 2008 16:26:27 -0500, Vic Smith
wrote:

On Wed, 20 Aug 2008 17:11:31 -0400, John H.
salmonremovebait@gmaildotcom wrote:



I'm not talking about taking money out of savings (CDs), but about
selling
stocks. I believe the interest earned on CDs is taxable in the year
earned,
not when the CD matures.

Yeah, but you have cap gains taxes on stock, no?
I' was talking IRA CD's, which are taxed as current year income.
Anyway, on the CD's, once you figure the tax hit and interest lost,
and figure the interest saved on the home note, there you are.
Easy.
With your situation, there's the potential of the stocks to increase
or decrease in value, and any known dividends. Future valuation
can't be determined.
One piece of advice I can give is "psychological."
If you sell the stocks, don't bother checking their performance
afterwards. It could hurt, or it could make you smile, but it doesn't
matter. Every day is a new day.

--Vic

If stocks rise more than 5 1/8% per year, then selling would be a bad
idea.
(Actually, since the tax on capital gains is less than the tax on earned
interest, the % could be a little less.) The CDs I have are currently
doing
better than the interest rate I'm paying, so they won't be used.

The decision is very dependant on what the future may hold for the stock
market.
--
** Good Day! **

John H

Don't bet your farm on the Market. It runs in cycles and historically
returns an *average* of about 10%/year. No one knows when the next
up-cycle will begin.

Not to worry though, according the Mayan calendar these problems will all
be a mute point in 2012. 8)

Dec 21 2012... and not only the myans came up with that time period.
The Chinese, a Sybol? in Greece etc.
We have four years and 4 months exactly.

Financial question...
 

On Thu, 21 Aug 2008 00:18:07 GMT, Short Wave Sportfishing
wrote:

On Wed, 20 Aug 2008 16:40:58 -0400, John H.
salmonremovebait@gmaildotcom wrote:

On Wed, 20 Aug 2008 20:34:15 GMT, Short Wave Sportfishing
wrote:

On Wed, 20 Aug 2008 16:16:32 -0400, John H.
salmonremovebait@gmaildotcom wrote:

Would it be a wise move to take out a loan on your home to buy stocks?

No.

Would it be a wise move to sell stocks to pay off a loan on your home?

No.

You're sounding too much like McCain. A little explanation would be muchly
appreciated.

When I think of the future, the stock market, I see doom and gloom
because of rising oil demand and reduced oil supply. I see very few
businesses that aren't affected by oil costs. The market has not been
performing all that well, and I don't see anything on the horizon that may
help it. It's for damn sure the election of Obama wouldn't be a help to it.

Economies run in cycles and this is a cycle is which the wise choice
is to just sit on what you have and accept that things will improve in
time.

Europe is tanking, there are signs that India and China are on the
cusp of a major recession cycle and the only economy that still can
hold it's own against changing economic climates as evidenced by the
fact that we're still not bottoming out with a relatively strong GDP
compared to historical economic patterns. This economy is positioned
to take advantage of the global down turn in economic activity.

Oil is still unsupportable at this level and will return to a more
rational and malleable $70-80/bbl range - perhaps not as quickly as I
thought, but certainly by December rather than October.

The dollar has shown signs of strength against the Euro and the Pound
- it will quickly return to the harbor of refuge status because
Europe's economies are in a bind and cannot lower interest rates which
would cause major fluctuation with upward inflationary pressure if
they tried - and their inflation rate is currently hovering around 11%
in aggregate. Twenty five point basis cut results in another 1.6%
rise in inflation year-over-year. Can't do it.

Which means that we're in good shape nominally.

In uncertain times, at 5.18% compared to the running daily average as
of today of 6.93%, you've got a loan with cheap money at a rate that
won't be seen for another 15/20 years.

This does not mean that you should not take profits where you can and
if inclined, instead of investing them back, take a portion and pay
down house principle - that is always a smart idea. The rest can be
reinvested short term outside of securities. The key is to do it over
time with a long range goal rather than dumping everything. Be
selective.

Lastly, understand that the big money is still sitting on the
sidelines neither selling or buying and holding what they have. That
should tell you something. Keeping yourself positioned and your
powder dry is the best bet.

Help out any? :)

As a matter of fact, it does. I appreciate your reply very much. I must
admit, you sound much like my broker. His advice is to leave the stocks
alone. He says if I sell now, I'll really be sorry in a year. We'll see.

Thanks again, Tom.

Financial question...
 

On Aug 20, 8:27*pm, John H. salmonremovebait@gmaildotcom wrote:
On Thu, 21 Aug 2008 00:18:07 GMT, Short Wave Sportfishing



wrote:
On Wed, 20 Aug 2008 16:40:58 -0400, John H.
salmonremovebait@gmaildotcom wrote:

On Wed, 20 Aug 2008 20:34:15 GMT, Short Wave Sportfishing
wrote:

On Wed, 20 Aug 2008 16:16:32 -0400, John H.
salmonremovebait@gmaildotcom wrote:

Would it be a wise move to take out a loan on your home to buy stocks?

No.

Would it be a wise move to sell stocks to pay off a loan on your home?

No.

You're sounding too much like McCain. A little explanation would be muchly
appreciated.

When I think of the future, the stock market, I see doom and gloom
because of rising oil demand and reduced oil supply. I see very few
businesses that aren't affected by oil costs. The market has not been
performing all that well, and I don't see anything on the horizon that may
help it. It's for damn sure the election of Obama wouldn't be a help to it.

Economies run in cycles and this is a cycle is which the wise choice
is to just sit on what you have and accept that things will improve in
time.

Europe is tanking, there are signs that India and China are on the
cusp of a major recession cycle and the only economy that still can
hold it's own against changing economic climates as evidenced by the
fact that we're still not bottoming out with a relatively strong GDP
compared to historical economic patterns. *This economy is positioned
to take advantage of the global down turn in economic activity.

Oil is still unsupportable at this level and will return to a more
rational and malleable $70-80/bbl range - perhaps not as quickly as I
thought, but certainly by December rather than October. *

The dollar has shown signs of strength against the Euro and the Pound
- it will quickly return to the harbor of refuge status because
Europe's economies are in a bind and cannot lower interest rates which
would cause major fluctuation with upward inflationary pressure if
they tried - and their inflation rate is currently hovering around 11%
in aggregate. *Twenty five point basis cut results in another 1.6%
rise in inflation year-over-year. *Can't do it.

Which means that we're in good shape nominally.

In uncertain times, at 5.18% compared to the running daily average as
of today of 6.93%, you've got a loan with cheap money at a rate that
won't be seen for another 15/20 years.

This does not mean that you should not take profits where you can and
if inclined, instead of investing them back, take a portion and pay
down house principle - that is always a smart idea. The rest can be
reinvested short term outside of securities. The key is to do it over
time with a long range goal rather than dumping everything. *Be
selective.

Lastly, understand that the big money is still sitting on the
sidelines neither selling or buying and holding what they have. *That
should tell you something. *Keeping yourself positioned and your
powder dry is the best bet.

Help out any? *:)

As a matter of fact, it does. I appreciate your reply very much. I must
admit, you sound much like my broker. His advice is to leave the stocks
alone. He says if I sell now, I'll really be sorry in a year. We'll see.

Thanks again, Tom.

So let me get this straight......

You received advice from your broker about not cashing in your stocks
to pay off the house or refinancing your house to buy stocks. (sound
advice)

Most mature and educated adults would know the same.

You, however then questioned his/her advice by posting questions
regarding it on a boating NG.

A boating NG.

Eh?

Financial question...
 

On Wed, 20 Aug 2008 17:28:03 -0400, John H.
salmonremovebait@gmaildotcom wrote:

I've never understood the advice to pay interest for the tax break. Where
is the break in giving away $1 to get 30 cents back? Seems like 70 cents
got lost there somewhere.

I can understand holding debt while building a savings account, but once
the cushion exists, I can't see the reason for it.

It's all a business decision. The interest you pay on a loan is the
cost of renting money. For certain types of loans like a home
mortgage or a broker's margin loan, you get to deduct the interest
payments. How much that deduction is worth depends on your tax
situation but the net effect is to reduce the effective cost of your
money "rental".

The next part of the equation is how much you can reasonably expect to
earn with the rented money. That depends on your skill as an investor
and what happens to the economy going forward. If you can reliably
make an annual return from your investments greater than youur
effective (after tax) cost of borrowing, then you come out ahead. The
downside is that if your investments don't work out you still owe the
money that you borrowed. That's the magic world of leverage,
wonderful on the way up, miserable going the other way.

Financial question...
 

On Wed, 20 Aug 2008 20:27:53 -0400, John H.
salmonremovebait@gmaildotcom wrote:

Thanks again, Tom.

Anytime.

My bill is in the mail - cash will be fine. :)

Financial question...
 

On Aug 20, 9:12*pm, Short Wave Sportfishing
wrote:
On Wed, 20 Aug 2008 20:27:53 -0400, John H.

salmonremovebait@gmaildotcom wrote:
Thanks again, Tom.

Anytime.

My bill is in the mail - cash will be fine. *:)

Make sure you get a receipt!