quote:

Originally posted by slosig:
"Getting to write off interest"

Yeah, but you have to lose the money before you can write it off.

Congrats to lidardman_u for being able to say that he no longer lives in the bank's house!

I was able to pay off my house when I was 32 and the peace of mind that gave was nothing short of spectacular.

quote:

Originally posted by Graniteguy:
How long do you think it will be before our Gov't creates new ways to sack and plunder our 401k's and IRA's?

Maybe the OP made a smart move?

In my opinion, never. It would destroy the Stock Market and cause Depression II.

quote:

Originally posted by doublesharp:...

Don't know if it made sense pencil and paper but it suits me to this day.

Brings to mind my tax preparer over several years gave me crap about not keeping all my receipts for business deductions. After a few years, and this time she also said I risked triggering an audit by not doing so, I asked her, based on my income, returns and owed taxes, how much I could expect to realize by keeping track of everything and filing the deductions.

She stated: "About $75."

I replied that I made $150 an hour billable, and that it was worth 1/2 hour of my time to "write off" tracking and filing deductions, and since I know I was "leaving money on the table in the IRS feeding trough, that they could bring their audit, as I knew I properly reported every nickel of income, and took not deductions other than those with verifiable paperwork. (I also know, but did not ask the cost of paying her fees for the time, effort and forms filed, since I saw a detailed expense of all the other filings I was charged).

So, several "Cap'n Oblivious" things over the years.

(painted with a broad brush, so there might be some overspray...)

-The insurance company/adjuster, is not your friend.

-The real estate folks make money on both sides of the sale.

-Win or Lose, Lawyers always get paid and never go to jail for a client. (broad brush, remember?)

-If gold and silver are such a good deal, why the big push to sell it/get someone else to buy it? (see, real estate folks)

-The financial guy, selling/advising probably couldn't make it as a Real Estate Broker, or a Lawyer.

I could go on, but I don't want to piss off everyone in a single post. That would be rude.


Sometimes the rube is not as stupid as the smart man believes.

I take home just under $3000.00 per month.
My house payment with escrow went from 665.00 to 685 a month (rounded up) due to an escrow "shortage". I had three or four years of payments left on less than a 20,000.00 loan that was at 3.75 percent interest.

I paid just under 1000.00 in interest this year which isn't enough of a tax deferral to do much with. And I would be paying interest for 3+ years which would be about 3000.00.

I paid off my car which would be paid in two years, and I paid 225.00 per month - I owed 3500.00 on that bill. I figure with the interest I am not paying, the payments I am not making I am ahead.

I also ordered a camera body and lens as I have a side business doing photography which makes this expenditure a tax write-off.

So maybe on that 1000.00 of interest on the mortgage I would get a 20.00 deduction on my taxes owed.

As a TSP is limited to what funds one can purchase, and seeing people in the very late 1990s/early 2000s when the stocks like Microsoft and other technology companies made a correction lose their shirts I figure it was more than worth the tax and penalty.

Also as a federal employee (purchasing supplies for a hydroelectric dam) that my job is hanging in the balance of the courts as right now there is a stay on the vaccine mandates for federal employees, but how long will that last?

with one credit card I pay all the bills I can monthly with that card, and then pay what I spent plus extra so that I get the points (1.00 per every 100.00 spent) so I transfer my points balance into the credit card balance.

In my area (NE Oregon Desert) jobs that pay the 27.00 per hour I earn are scarce, and now I don't have to make but 12.00 per hour to keep my standard of living.

I put money aside every payday so that I can pay cash for my auto insurance every six months, and put cash aside for an emergency fund.

Not having a mortgage or car payment is a huge weight off of my shoulders should my family end up a one income household (my wife being the provider).

When I married 13 years ago I told my wife she could buy the groceries and pay for dinners out, and I would pay the rest. This arrangement has worked well as she has her money, and I have mine. I can't complain if she buys anything, and she can't complain if I buy anything. So far I haven't gone hungry, and she hasn't gone without electricity and a roof over her head. So all in all a pretty good deal.

Hell, she even bought me a Henry .357 with the octagon barrel eight years ago when I hit 20 years of federal service.

I only pulled my contributions, the government matching contributions are still there in the TSP, and I can still contribute the measly 111.00 per payday. What did I lose? The possibility of capital gains on the money invested in the TSP, or maybe the risk of losing it all when the dollar is further devalued.


I do appreciate the input, and you may think I did a smart thing, and you may think I pulled a dumb assed stunt, but either way the transaction is completed, and I own my house fully.

Ouch. Ouch. Ouch. Lets guess that youll live to 75. That $1000-$2000 camera probably cost you $25,000 in lost interest. Ouch.

My 65 year old mother in law had a paid off house. Enter new loser boyfriend, who talks her into a 100,000 dollar home equity line of credit. His reasoning? Screw your kids and their inheritance. Lets enjoy our later years and spend spend spend baby! She retires in a few months and REALLY could have been all set with that paid off house. Instead, she now has a mortgage again for the rest of her life. Thanks a lot loser boyfriend.

quote:

Originally posted by Flash-LB:
In my opinion, never. It would destroy the Stock Market and cause Depression II.

THese people in charge are dumber than the janitors at your local school district.

Have you ever seen what legislation Occasio Missing Cortex gets behind?

Tax a 401K into oblivion? Fuck yeah!! We have broke ass city dwellers and minorities to pay off.

That is bullshit. There are 10,000 ways to analyze what he did and what the positive and negative scenario's could be. Yours is just stupid.

quote:

Originally posted by bubbatime:
Ouch. Ouch. Ouch. Lets guess that youll live to 75. That $1000-$2000 camera probably cost you $25,000 in lost interest. Ouch.

My 65 year old mother in law had a paid off house. Enter new loser boyfriend, who talks her into a 100,000 dollar home equity line of credit. His reasoning? Screw your kids and their inheritance. Lets enjoy our later years and spend spend spend baby! She retires in a few months and REALLY could have been all set with that paid off house. Instead, she now has a mortgage again for the rest of her life. Thanks a lot loser boyfriend.

See that camera body and lens at 3500.00 will earn me five times that this year shooting portraits at 150.00 per hour for my time. sure it may take a year to pay off (or less) if I put it on a card. It also is a business deduction for 2022 on my schedule C as is the replacement printer I was awarded the privilege of buying when my old printer decided to quit working.

I am not taking a home equity loan unless it is to build a garage in the back yard, and at that point we will see how much I can self-finance.

I don't want my wife worrying should I pass about the mortgage on this house as she has to worry about the mortgage on the house she has owned prior to our marriage (she uses it as a rental, and the rent pays the mortgage and escrow).

If something happens to me and my wife my sons can sell this place for four times what I paid for it and live hopefully debt free for a few years. This isn't a big house. 1400-1500 square feet typical one level rectangular ranch with a garage converted to living space that I paid 69,000.00 for in Dec 1997, refinanced a few years later to take two percent off the interest (7.5875 down to 5.875), and then refinanced again in 2010 for a shorter term (15 years instead of 30) and another two percent reduction in interest down to 3.75. Current "market" value is being shown at 200,000.00... which to me just shows how much the dollar has devalued since 1997 as it is a 100,000.00 house at best even with the housing shortage in my area.

I understand peace of mind, but I can't imagine many scenarios where that is going to really work out for the better financially.

I guess I'd have to see the numbers to know but paying a (probably under 5%) mortgage with money making probably 10% (even it's just in an SP500 index), and also paying a $6000 penalty seems shortsighted, at best.

quote:

Originally posted by YellowJacket:
I understand peace of mind, but I can't imagine many scenarios where that is going to really work out for the better financially.

I guess I'd have to see the numbers to know but paying a (probably under 5%) mortgage with money making probably 10% (even it's just in an SP500 index), and also paying a $6000 penalty seems shortsighted, at best.

So if the stay on the vaccine for federal employees gets overturned and I lose my employment that pays my bills and have to take a severe cut in pay, and I were to keep the money in the TSP instead of taking my action, what then?

Not having a payment means I can pay myself for the housing escrow, and when it is property tax time I can withhold taxes while keeping the funds in an interest bearing escrow account to show good faith when I want to challenge an item my property taxes pay for. Why should anyone in this county pay more than the necessary power to keep pipes from freezing on schools that are not in use? Why do we need to pay a janitor if nobody is at the school to clean up after?

But I think the peace of mind for my health aspects is way more than the penalty and taxes on the money withdrawn. Heck I can rathole more funds from my paychecks and income to pay myself the interest lost on the money taken out.

I pay myself first every payday, and every time I am paid for photography services or sales of art prints.

Also my house and vehicles truly are assets and not liabilities as if one owes money on a house it is a liability until it is paid off regardless of what a bank tells you.

It's not as simple as just looking at numbers . Sure , the math doesn't work out a lot of times . We used some retirement money to pay off our mortgage . Both of us were facing retirement , pretty much against our will . The only way we were going to pull it off was to not have a mortgage . It's not something we would recommend to others , but in our situation it worked out for us and I'm happy with our decision . No regrets .

quote:

Originally posted by lizardman_u:
I take home just under $3000.00 per month.
My house payment with escrow went from 665.00 to 685 a month (rounded up) due to an escrow "shortage". I had three or four years of payments left on less than a 20,000.00 loan that was at 3.75 percent interest.

Your numbers aren't far off from what ours where just before I retired. I went more-or-less the other way: I kept the mortgage and kept my money where it was. But, as I noted: We were seeing year-to-year gains of ±13% on our nest egg. (You haven't mentioned what kind of returns you've been experiencing on your 401k.)

quote:

Originally posted by lizardman_u:
... you may think I did a smart thing, and you may think I pulled a dumb assed stunt, ...

What we think is really quite inconsequential. We're not in your shoes

Whether it turns out to have been a good move or not depends upon whether or not the market crashes with a slow recovery and whether or not you keep your job. No way to know these things. I guess you'll find out.

If I were now where I was five years ago I might have made a move similar to what you did. I think the market is overheated and I think there's too much going on that could easily poke a very large hole in it. (We're depending upon our investments manager keeping us as protected as possible and not taking too big a hit if it all goes wahoonie-shaped.)

quote:

Originally posted by lizardman_u:
... but either way the transaction is completed, and I own my house fully.

Yup. What's done is done. If you're happy with what you've done that's all that counts

I'm not sure it was the right thing to do, but I will take this opportunity to congratulate you on owning your home

Wow. Those numbers are horrible. $6000 in losses to pay off a $20,000 mortgage and some bills? So if you paid off $50,000 you took an immediate 12% hit and years of lost investment potential so that you can take your new “savings” and put it in a money market? And currency devaluation is your biggest concern? Ok.

quote:

Originally posted by pedropcola:
Wow. Those numbers are horrible. $6000 in losses to pay off a $20,000 mortgage and some bills? So if you paid off $50,000 you took an immediate 12% hit and years of lost investment potential so that you can take your new “savings” and put it in a money market? And currency devaluation is your biggest concern? Ok.

Okay so what if the numbers don't jive. What value do you place on my health? I will tell you that the pittance I lost in the transaction doesn't even touch what my mental and physical health are worth to me.

If I contribute 2400.00 per year for nine years that is 21,600.00 in that time frame which only netted me 33,000.00 over the course of that nine years in my contributions. so maybe I netted a 6.5% gain. I figure it is worth it as our dollar is devaluing daily (heck look at gas prices), and this way I feel I maximized my investment especially since I am not prohibited from contributing for six months which means my 5% contribution keeps going into the TSP with a 5% government matching fund.

Good for you! We have been able to pay off the home about 3 years ago, it took longer than we wanted, but we are free and clear. All vehicles are laid for too. I’m 62 now, hubby younger. Both still working, so trying to keep putting more in the 403b until I can’t take it anymore, ha. Just looking forward to the day when we feel we can leave the rat race.

LM, the vast majority in this thread respect that you looked at it and your situation and made a decision that was the best for you and your family and now own your home outright and are almost debt free. And our happy for you. The others, oh well. They will always be negative on such topics because they now best. And can keep paying a mortgage.
Again, very happy for you and wish you the best moving forward with your freedom to do what is best for you and your family .

quote:

Originally posted by pedropcola:
Wow. Those numbers are horrible. $6000 in losses to pay off a $20,000 mortgage and some bills? So if you paid off $50,000 you took an immediate 12% hit and years of lost investment potential so that you can take your new “savings” and put it in a money market? And currency devaluation is your biggest concern? Ok.

You're like an obnoxious drunk in a bar that just keeps pushing himself into a group that has told him to go away.

Give it a rest.

Congratulations it's a great feeling.

My wife and I bought our second home for cash back in 1999. I was 33 at the time.
We used the profit from the sale of our first house to buy our current home for cash.
My wife and I do not carry ant debt except for car payments, and we usually pay them off early.

I love the stimulating financial conversation, and I applaud OP for being in a position to pay off his house. I admit that it's a concept I struggled with (and today, our mortgage remains our only debt) until I had an experience with a friend and former co-worker.

This guy was unceremoniously downsized about 6 years ago with zero warning, with a family and a wife (who, luckily was an Engineer working part-time from home while raising the kids). Every one of my other co-workers (who didn't know this guy's financial situation) were scared shitless at the thought that they could be the next ones to lose their houses. As it turns out, this guy was financially savvy if not a wee bit unorthodox in his methods. His house had been paid off for several years, he had no car loans, and had a decent amount of "oh shit" savings. His wife stepped up and took more hours (which her employer was more than willing to give) to make sure they had a little extra padding. He ended up taking the better part of a year off to clear his head and spend time with the kids while processing being let go. Eventually, he got back into the job market, found a higher paying gig a few months after that, and retired his wife.

I'm sold. Most of the people I know wouldn't have been able to navigate rough waters while breathing easy, because debt (IDGAF whether you call it "good debt" or not) is an anchor.

My plan is to wait until the next "blood in the streets" moment to figure out whether I want to pay off our home or buy a rental property for cash (and let somebody else pay off my mortgage). Either way, free and clear ownership of property is a big goal for us.

quote:

The transaction cost $6000.00 in tax and early withdraw penalty, but I used the funds to pay off my only car loan, my mortgage, and a credit card.

Short term pain, but long term gain.