What would you do with 30K?
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Paying off the depth is an easy and safe way but financially very unproductive. Investing of course has its risks but the payoff is worth it. If you don't know what you're doing, and don't know the product (stock) you're buying into, stay away and pay off the depth.I keep getting told by financial advisors that paying off debt is one of the worst things you can do with a big windfall. But most of those guys are rolling in cash don't know how oppressive debt in an amount large enough to suck up 30K or more can be.
Paying off depth, ~6% gain. That's not much when you can get 10% without much of a risk. I can understand paying off high interest cc balances but trying to pay off your mortgage early when it's not absolutely necessary is foolish. That mortgage money is cheap money, use it to your advantage! -
Well said Jstas. Nothing is more stressing than an oppressive debt. It makes your paycheck feel almost worthless, since you know it is so overshadowed by a negative somewhere. I could give two **** what it does to my "credit profile", or how smart of a decision it will be seen as by someone in the know; if I had a windfall, I'd be outta debt without hesitation. And I would never regret the decision.If you will it, dude, it is no dream.
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Depends on the interest on the debt. Not many people are going to be paying interest rates ~6% unless it's their morgage or car loan, all other loans/cc are going to be in the 12% - 21% range which is a good garaunteed return.
Paying off the car loan at say 1.9% can make sense since not having that payment overhead does help much more than just avoiding the interest payments. Sure, you can get better returns in stocks, BUT if someone is having trouble making their $500/month car payment, getting that off the book can keep you solvent. Making 20% in a non-liquid account isn't going to help you if you bounce the rent check or your car gets repo'd.
That said, if your that close living paycheck to paycheck, you're dumb. Get a better job or a cheaper apt/house/car...There is no genuine justice in any scheme of feeding and coddling the loafer whose only ponderable energies are devoted wholly to reproduction. Nine-tenths of the rights he bellows for are really privileges and he does nothing to deserve them. We not only acquired a vast population of morons, we have inculcated all morons, old or young, with the doctrine that the decent and industrious people of the country are bound to support them for all time.-Menkin -
I can understand paying off high interest cc balances but trying to pay off your mortgage early when it's not absolutely necessary is foolish. That mortgage money is cheap money, use it to your advantage!
I disagree with you here. Although in the short term a 5% mortgage rate (which is what I have over 30 years) seems like "cheap money," keeping your mortage even half of the 30 years has you paying back interest that is atleast half again as much as your initial mortgage. If I get a windfall, and it is just enough to pay off my mortgage, I'm paying it off. That free's up $1300 per month , $15,600 per year that I can invest rather than pay the mortgage company, the state, the city, and the school tax. Like you said make 10% on the $1300 and keep it. . . priceless. Then I will have earned with that money what I need to pay the property and other taxes.
I'm from the old school. Make your house your own and no one else's and you have a place to hang your hat, always. -
Depends on the interest on the debt. Not many people are going to be paying interest rates ~6% unless it's their morgage or car loan, all other loans/cc are going to be in the 12% - 21% range which is a good garaunteed return.
If you're paying 12% or higher in interest, your finances are in pretty bad shape and paying off depth makes a lot of sense. My cc balance transfer interest rates (not introductory) are lower than on my mortgage. I have additional $20k on 0% introductory rate until December that I have also put into my stock account. So far that particular money has made me 15% return in less than 2 months. It's risky but I'm very conservative on where I put my money into, and I know the product, so usually it pays off. -
Agreed, but I'm talking about the general population here. Most people carry CC debt in the 12-21% range. My CC's? No idea, their always paid off every month.
The only debt we carry is the morgage, which after you consider the tax saving is costing us about 4% which I can live with.
We should start a stocks thread. Right now I'm averaging about a 37% return every year since 2001. I'd like to get others insights on plays. That said, I'm loving SBS, SINA, and NVDA right now...There is no genuine justice in any scheme of feeding and coddling the loafer whose only ponderable energies are devoted wholly to reproduction. Nine-tenths of the rights he bellows for are really privileges and he does nothing to deserve them. We not only acquired a vast population of morons, we have inculcated all morons, old or young, with the doctrine that the decent and industrious people of the country are bound to support them for all time.-Menkin -
I just created this: http://vse.marketwatch.com You can watch what others invest in and how they fare.We should start a stocks thread. Right now I'm averaging about a 37% return every year since 2001. I'd like to get others insights on plays. That said, I'm loving SBS, SINA, and NVDA right now...
ID: polk_audio
password: fmrules
If you start a thread for stocks, put this info there. -
hearingimpared wrote: »If I get a windfall, and it is just enough to pay off my mortgage, I'm paying it off.
I did this exact thing last year after the company I worked for was bought out. Over the life of my loan I save 175k which goes in my pocket. I did the same thing with my vehicles since I did not have any credit card debt. Then I paid my taxes which hurt real bad but at the end of the day I know my children are safe and their life style won't change if I ending up working in a convenience store.
At this juncture I would take that 30k and invest it for my kids college. I have everything that I need... Health, Healthy and happy family and enough pocket change to keep me in as much beer as I can drink on my front porch.
HBomb***WAREMTAE*** -
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30K... 30 thousand. Thirty Thousand Dollars... that's a lot of coin!
What I would be tempted to do: Quit my job, and find one that really interested me, but might not pay as much... buy a couple of JetSki's for the lake... Fly to Fiji for a month... Try my hand at Gambling... Buy a new truck with cash... get the wife a matching set of diamond earrings, necklace, bracelet and ring... get myself an expensive watch... get a full set of SCUBA diving gear with tank to dive anywhere, anytime I wanted... the list could go on and on...
What I would probably do: Put it straight toward one of my houses... in the long run, that would save a ton of interest. Probably my rental, 'cause then the cash flow would be terrific once it's paid for!!!
Good question though. Got some grins from reading everybody's replies!!!Honoured to be, an original SOPA founding member
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MrNightly,
You have some nice plans! But, what about you and Jstas going on a vacation somewhere nice?;)
BTW, would that be a shmuck vacation??:D -
MrNightly,
You have some nice plans! But, what about you and Jstas going on a vacation somewhere nice?;)
BTW, would that be a shmuck vacation??:D
Hell, I'm game. Don't come asking me questions, if he never appears again after that... Honoured to be, an original SOPA founding member
Stuff...
RTi12's - front
CSi5 - center
FXi3's - surrounds
RTi4's - surrounds
SVS PB12-NSD/2 - sub
Denon 3805
Rotel RB-985 5-Channel Amplifier -
hearingimpared wrote: »I disagree with you here. Although in the short term a 5% mortgage rate (which is what I have over 30 years) seems like "cheap money,"
1) Pay off mortgage
2) Invest in stocks, use the profits monthly to pay your mortgage. Savings in interest on tax return were not invested but added to the cash flow.
In both cases you're saving the monthly payment from your pocket.
5% mortgage, 30 years, 200k. You'll get an extra 1.6 million over 30 years in case 2 when your average yield is 10%. -
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