Interesting article, with actual studies to back up the text, saying how you’re much better off taking any extra money that you would use to pay down mortgage faster, and using it to do any number of things, from maxing out your retirement plan, to paying down pretty much ANY other debt first.
Cliff notes, by using write-offs fro your mortgage interest, your 5% mortgage lowers to closer to 3.5%, which is better than probably any other loan you’d get. And, the money you pay over the 30 years or so, will probably be fully negated by inflation. In the meantime, you can use that money in the markets, put inflation and smart investments on your side, and retire VERY comfortable.
the article is right on the money except for two things:
there are a lot of loans cheaper than home loans right now. (car loans at < 3% for example)
If you’re paying PMI it might help to get to 20% since the markets are not showing returns that will beat that 50-150 a month pissing away of money for most people.
still most people get all caught up in trying to pay off a house at the expense of putting more into retirement funds while prices are SUPER LOW.
I’m currently putting in a total (with employer contributions) of 14% of my salary into my 403b, but I think I am going to increase it to 16% in June, and then as I feel comfortable, continue to increase it.
First contribute as little as is needed to get your full match at a work.
Then max out an IRA (ROTH IRA is my preference, I highly recommend Vanguard for this)
Then come back to your employer’s plan if you have more money to put in.
My brief 2 cents…don’t be like most of America & bank 100% on paper assets. IRA and 401k/403 are fine but remember they are purely perceived value and could be worth $0 potentially. Diversify and spread out your risk on some level with tangibles.
Also remember that it’s tough to have fundamental growth in paper asset value when the nation is so far in debt and diluting our spending power. If you don’t understand nominal value and how $1 is not always $1 then study up on that a bit.
I’m not looking to plan estates for folks or advise them in specific terms. I’m not credentialed to do so, nor am I compensated for offering advice.
I’m just suggesting diversification on some level, involving tangibles. Tangibles can be things like guns, ammo, metals, food, water etc…
My opinion on gold…it’s priced beyond most people’s means. You can’t hunt with it, you can’t eat it and it has limited fundamental value.
