In article , Mike Coslo
writes:

N2EY wrote:

In article , "Ryan, KC8PMX"
writes:


"Mike Coslo" wrote in message
...

Ryan, KC8PMX wrote:

If your interest rate is less than 5%, the best loan to get is a 30

year!

It's cheap money. Paying off a house quick is foolish. And the monthly
rate is usually a hell of alot less too. Spend the difference of that
paying off bills or invest it in a mutual fund or something.



Ahh, a financial truism! This belongs with:

The stock market ALWAYS goes up!

What goes up must come down as well too.


Not necessarily. Look at where the Dow was when Bill Clinton took office in
1992...


But that is the beauty of the
stock market. It is a cyclical thing. Ideally it would be like a good
sinus rhythm. It is just merely the knowledge of where to jump in at.


Just as important is knowing when to jump *out*.

And there is the problem for those playing the market for their
retirements. They know about when they are going to jump out, but if the
market doesn't cooperate....oh oh!

(It soitanly do, but over long time periods that are not relevant to
most of us who don't live over 150 years. More importantly it is what
the market is doing around the time you take your money out.)

Move your money into high yield accounts shortly before you retire, that
way you'll have more money when you retire!

Buy high, sell low, go broke...

Only if you know what you are doing and have a really good grasp of the
market.


Which absolutely no one has.

I've listened to investment consultants actually pull this one out of
their hats. I know some older folk who have done this and now have
almost no retirement funds.

Yep... not for the weak or feable to try on thier own if not knowledgeable.


The term is "risk tolerance"- a fancy way of saying how ready you are to
lose
money. And the rule is simple: the closer you are to actually needing the
money, the less your risk tolerance should be.

I have to chuckle at your truism. first, because your friend the real
estate agent uses those sort of arguments to talk you into buying
several thousand or tens of thousands more dollars worht of house.
Second is that You are saying a person who gets out of debt is foolish.

Actually the person I got this truism from and believe in it is Bruce
Williams, the talkshow host. If you do the math, it is fairly true.

I did the math and it's false enough to be a worthless truism.

If you look at the total dollars spent, you can still pay less money on
some of the higher interest lower cost loans than lower interest higher
priced loans. (although I'd never suggest doing that) It's just the
sheer amount of dollars.

Yep. That's why you have to calculate the options.

So the best bet is to pay all the loans off as
quickly as possible.

Not always.

Suppose you're in a situation where money is tight but you can expect big
increases some time in the future. (example: kids are small and one parent is
home with them, but when the youngest reaches school age both parents will be
working full time). In a case like that, having a lower monthly payment may be
the best alternative even if it requires a longer loan term.

Best way to not be a fool is to not go heavily into debt in the first
place. I have a 5 percent loan, but I'll pay it off quickly, I think.

I wouldn't but thats me. What I would do is see if you can refinance at
all
to a lower rate. I have actually seen a interest rate recently somewhere
in
the 3 percent range!! Talk about a cheap loan, hell, I would
refinance/remortgage my neighbors house if I could legally get away with
it!
LOL


Sure - because a house is something you need anyway, it's insured and not
likely to wind up obsolete or useless in a few years. Most of all, almost
no
one can afford to buy a house for cash.


Instead of paying off that low interest loan quickly, one is smarter
paying
off the higher interest loans like automobiles, department and credit
card
charges, and other loans/debts.

Again, it's better to not get into a situation where you would have to
choose which loan you're paying off early.

Well, its not paying the principle that kills ya, its the interest that
does
over a long time. The lesser the interest rate, the less I am interested
in
rushing to pay it off extra early. Either way, one needs to do the math
or
find someone who does understand real estate finance and other financal
calculations to make sure in their own individual circumstances.


Exactly - it's all in the numbers for your particular situation.

The biggest financial boo-boos people make a

- confusing "wants" and "needs" (you may need a car, but you want a new
SUV)
- not having a budget, or not having one based on real data
- looking at their income out-of-context and saying "I can afford X"
without
doing the numbers.

Don't forget succumbing to the credit card problem. It's soooo easy to

live life large when you have 10 credit cards with a 20 thousand liimit
on each card.

That's simply another version of looking at their income out-of-context and
saying "I can afford X" without doing the numbers. If you can't afford to pay
off the credit cards at the end of the month, you really can't afford the
purchase made on them.

I consider credit cards as "payment cards", nothing more.

One of those nifty little life secrets I've found out is that if you
are willing to avoid spending credit money like a drunken sailor while
you are young, you will have much more money for your toys when you get
older.

New verse to an old song:

What shall we do with a drunken sailor
What shall we do with a drunken sailor
What shall we do with a drunken sailor
Ear-lie in the morning?

Put 'im in charge of an Exxon tanker
Put 'im in charge of an Exxon tanker
Put 'im in charge of an Exxon tanker
Ear-lie in the morning!

73 de Jim, N2EY