Author Topic: DONT Payoff your Mortgage Club  (Read 660989 times)

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #3150 on: March 18, 2022, 11:59:47 AM »
@Tyson , congrats on playing through with the strategy!


Longwaytogo

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Re: DONT Payoff your Mortgage Club
« Reply #3151 on: March 21, 2022, 12:14:42 PM »
There are a lot of unknowns - too many this far out for any firm planning

For starters, no one knows what the interest rates will be in 14 years. Could be 3%, or 12%+. Depending on those a case out ReFi may or may not be a good idea

Second, your ďanticipated stacheĒ of ~$700k could be slightly less of a lot more, depending on market returns.

For sure early, just trying to wrap my head around it as a strategy.

Yes my current rate is pretty good at 3.25 (forgot the 2.75 was actually the 15 that I refi-ed) so would not make sense to cash out with high rates.

True, but whether it was $600k or a million wouldn't really change the fact that it could grow more left alone by refiing then withdrawling from day one.

Finally a good chunk of your plan relies on SS and a defined pension. Despite terms like ďguaranteed benefitsĒ they can and have been changed in the past. 14 years out I would treat both with a touch of caution.

People always say that but I figure in a black swan event where SS and my wifes govt pension are screwed up what are the odds the markets are any better? Guess I'm mostly a glass half full guy :)

One last thing, DONT wait until you retire to attempt a ReFi. Banks donít like to see people with no income, even if they have seven figures in assets. My parents faced this first-world problem when they tried to do exactly this ReFi at least six months before you give notice at your jobs.

Oh yes, would def do it while still working.

Iíd simply keep this strategy as ďone possible optionĒ and revisit 3-5 years before you retire to see where the numbers land.

That is my thought that this could be one option. I was just trying to sort of define/quantify the option further I guess with some projections.

Anyhow, thanks for the response!!

Bradlinc4

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Re: DONT Payoff your Mortgage Club
« Reply #3152 on: March 22, 2022, 07:03:40 PM »
How have you invested the proceeds of your mortgage? Are you more conservative? Do you mix it in with your other investments?

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Re: DONT Payoff your Mortgage Club
« Reply #3153 on: March 22, 2022, 09:45:30 PM »
Well I shall soon be rejoining this bandwagon with a new big fat mortgage.  It looks like rates ďkind of suckĒ now so Iím likely going to land somewhere around 4%.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #3154 on: March 23, 2022, 12:46:05 AM »
Well I shall soon be rejoining this bandwagon with a new big fat mortgage.  It looks like rates ďkind of suckĒ now so Iím likely going to land somewhere around 4%.
It's not much comfort, but that's still a historically low rate. I remember being elated to get 7% on a condo I bought on a short sale in 1996.

Our plan is to pay cash and then get a mortgage, so we're feeling the pinch, too. Don't know if we should push it through or wait. MPP.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #3155 on: March 23, 2022, 07:35:05 AM »
A 4% nominal rate still satisfies the DPYM club, welcome!

When you were rate shopping, what did they quote you for the ARM?

I was refinancing in late 2020, and the ARM rates were actually above the thirty-year-fixed rates. The bank wanted me to pay them for the right to bear risk. Perhaps it's different now?

Fomerly known as something

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Re: DONT Payoff your Mortgage Club
« Reply #3156 on: March 23, 2022, 04:45:12 PM »
A 4% nominal rate still satisfies the DPYM club, welcome!

When you were rate shopping, what did they quote you for the ARM?

I was refinancing in late 2020, and the ARM rates were actually above the thirty-year-fixed rates. The bank wanted me to pay them for the right to bear risk. Perhaps it's different now?

ARMís were a tiny bit lower but not enough to make material difference.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #3157 on: March 24, 2022, 08:20:56 AM »
We enjoyed a 3% even rate on a 5/1 arm for a property we bought in Nov. 2013 (at the time, this was 112 bps lower than the 30-year fixed). The rate reset at the beginning of 2019, and we sold it in 2020, so 60 payments at the teaser rate, and 15 payments at higher rates.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #3158 on: March 26, 2022, 06:18:49 PM »
From elsewhere on the forum:

"My husband and I (late 20's) just paid off our mortgage and even though it was a financially stupid idea with our 1.80% interest rate,  it just feels so good to have no debt. We keep our finances private so I had no one else to share the excitement with."

Is it okay if I weep for the loss of all that lovely, lovely 1.8% money?

If you want to comment, please do it here. I don't want to rain on anyone's parade.

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #3159 on: March 26, 2022, 07:12:19 PM »
Thatís about as close to the bank saying ďyou can pay us all now or you can pay us the same amount over timeĒ and choosing the latter.
I guess I have better uses for my money.  Oh well.

bryan995

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Re: DONT Payoff your Mortgage Club
« Reply #3160 on: March 27, 2022, 03:01:01 PM »
From elsewhere on the forum:

"My husband and I (late 20's) just paid off our mortgage and even though it was a financially stupid idea with our 1.80% interest rate,  it just feels so good to have no debt. We keep our finances private so I had no one else to share the excitement with."

Is it okay if I weep for the loss of all that lovely, lovely 1.8% money?

If you want to comment, please do it here. I don't want to rain on anyone's parade.

Lol I was about to comment the same thing. 1.80% GOODNESS.  That poor poor mortgage.  Borderline criminal to pay off such a loan IMO :)

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #3161 on: March 28, 2022, 07:53:06 AM »
Just to re-iterate that I am team "Do not pay off the mortgage". 344 payments to go!

Fomerly known as something

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Re: DONT Payoff your Mortgage Club
« Reply #3162 on: March 29, 2022, 08:33:15 AM »
From elsewhere on the forum:

"My husband and I (late 20's) just paid off our mortgage and even though it was a financially stupid idea with our 1.80% interest rate,  it just feels so good to have no debt. We keep our finances private so I had no one else to share the excitement with."

Is it okay if I weep for the loss of all that lovely, lovely 1.8% money?

If you want to comment, please do it here. I don't want to rain on anyone's parade.

Lol I was about to comment the same thing. 1.80% GOODNESS.  That poor poor mortgage.  Borderline criminal to pay off such a loan IMO :)

My only thought is ďat leastĒ they are young enough that now that they are redirecting $ to investments they still have time to compound.  But I canít help but think they will change houses in a few years and do the same thing again.

Tyson

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Re: DONT Payoff your Mortgage Club
« Reply #3163 on: March 29, 2022, 09:34:54 AM »
After the divorce, I was decimated financially (3.5 years ago).  I gave all the $$ in order to keep the house (and the very low interest mortgage on it).  I've kept paying the minimum on the mortgage and have been aggressively shoving my money into investments instead of paying down the mortgage.  I'm pleased to say that I'm back up to $220k in my 401k account which is kind of astonishing to me.  The investments have grown at a much faster rate than what I would have been able to pay down on the mortgage (had I gone down that route). 

Once again, thank you DPOTM thread!

FragglesRock666

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Re: DONT Payoff your Mortgage Club
« Reply #3164 on: March 30, 2022, 04:55:58 PM »
Sooooo.
Still haven't paid anything extra on my mortgage.  And continue to funnel money into my first-ever taxable brokerage account.

And also decided along with the fiance that A) we're going to look for a vacation property nearby and B) we are going to get a mortgage and not pay it off early, either.  Even if the interest rates look to be going up for the foreseeable future, so we won't get as great of a deal as I got when I refi'd the house in 2020.  We will only put down the minimum amount needed to keep the monthly payments within a budget that we're comfortable with. 

Villanelle

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Re: DONT Payoff your Mortgage Club
« Reply #3165 on: April 01, 2022, 03:02:16 PM »
Sad to say, I think I'm leaving the club.

We are planning to list our rental property (the only home we own) for sale in a few months.  Unless the markets shifts between now and then, we will make a boatload of money, even after owning through the 2008 crash.  But one thing I'm sad about is losing my low-interest loan, just when interest rates start to rise.

I will happy not to deal with being  long distance landlord though.

dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #3166 on: April 01, 2022, 08:05:17 PM »
Sad to say, I think I'm leaving the club.

We are planning to list our rental property (the only home we own) for sale in a few months.  Unless the markets shifts between now and then, we will make a boatload of money, even after owning through the 2008 crash.  But one thing I'm sad about is losing my low-interest loan, just when interest rates start to rise.

I will happy not to deal with being  long distance landlord though.
Selling and not buying something else is the ultimate DPOYM move in my mind. Granted, not a mortgage, but the whole idea is to keep your money working for you - not sinking a chunk into the next home means you have maximum money to invest.

rmorris50

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Re: DONT Payoff your Mortgage Club
« Reply #3167 on: April 02, 2022, 05:14:17 AM »
From elsewhere on the forum:

"My husband and I (late 20's) just paid off our mortgage and even though it was a financially stupid idea with our 1.80% interest rate,  it just feels so good to have no debt. We keep our finances private so I had no one else to share the excitement with."

Is it okay if I weep for the loss of all that lovely, lovely 1.8% money?

If you want to comment, please do it here. I don't want to rain on anyone's parade.
Some bank was made very happy too.


Sent from my iPhone using Tapatalk

joe189man

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Re: DONT Payoff your Mortgage Club
« Reply #3168 on: April 04, 2022, 11:22:16 PM »
Anyone thinking of doing a cash out refi right now? We have a 2.875% 30 year with about 348 payments to go. My thought was if we cashout refi we could clear ~$115k due to the crazy price increases of late, but at the expense of starting over on the mortgage and an increase in monthly payment of ~$1200 a month due to added principal and higher rates of ~4.5%.

If you compare Option A) investing $1200 a month and Option B) invest a $115k lump sum both assuming a 7% interest, Option B or the $115k is a better deal for ~13-14 years at around which time the saving balance for Option A or saving $1200 a month has a higher balance. Seems like an interesting conversation

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #3169 on: April 05, 2022, 08:23:38 AM »
How easy would it be to keep the primary mortgage, and do a HELOC on the extra equity you want to access? That would mean paying a higher rate, but only on a tranche of the funds.

joe189man

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Re: DONT Payoff your Mortgage Club
« Reply #3170 on: April 05, 2022, 09:11:29 AM »
How easy would it be to keep the primary mortgage, and do a HELOC on the extra equity you want to access? That would mean paying a higher rate, but only on a tranche of the funds.

i should have said vaguely entertaining the concept instead of thinking about it. we don't need that cash for any specific purpose, taking advantage of the crazy equity gain and putting it to work in an index fund seems like an interesting idea as i hope we are retired in less than 13 years so the math theoretically works out. But i believe DW would never agree, she is debt averse

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #3171 on: April 05, 2022, 10:37:57 AM »
Agreed: accessing that equity at a low price is the trick.

Telecaster

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Re: DONT Payoff your Mortgage Club
« Reply #3172 on: April 05, 2022, 02:43:24 PM »
If you compare Option A) investing $1200 a month and Option B) invest a $115k lump sum both assuming a 7% interest, Option B or the $115k is a better deal for ~13-14 years at around which time the saving balance for Option A or saving $1200 a month has a higher balance. Seems like an interesting conversation

I probably would not do this.   I haven't run the numbers but with that time frame you'll have a good chance of not breaking even.    And there is some utility to having a lower monthly payment too. 

Holocene

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Re: DONT Payoff your Mortgage Club
« Reply #3173 on: April 05, 2022, 09:47:49 PM »
Anyone thinking of doing a cash out refi right now? We have a 2.875% 30 year with about 348 payments to go. My thought was if we cashout refi we could clear ~$115k due to the crazy price increases of late, but at the expense of starting over on the mortgage and an increase in monthly payment of ~$1200 a month due to added principal and higher rates of ~4.5%.

If you compare Option A) investing $1200 a month and Option B) invest a $115k lump sum both assuming a 7% interest, Option B or the $115k is a better deal for ~13-14 years at around which time the saving balance for Option A or saving $1200 a month has a higher balance. Seems like an interesting conversation
I'd think long and hard before giving up that sweet 2.875% 30 year rate.  You might never get a rate that low again.  You're looking at a pretty huge rate jump.  I agree that you should at least look into a HELOC to access the equity.  I think HELOC rates are higher, but at least you get to keep the existing low rate on the main mortgage.  I personally wouldn't do it, but I'm not one to fully leverage my house either.  I could've done a much bigger cash-out when I refinanced last fall.  I only did $30k and that was only to get a better deal.  I found that I got used to my low mortgage payment and wasn't too keen on the idea of a much larger payment with FIRE on the horizon.  May have been a bit suboptimal, but no regrets.  I still turned my 30 year mortgage into a 39 year mortgage, pulled out $30k, and my payment is still less than my original payment.  So I could've done worse.

But i believe DW would never agree, she is debt averse
And this is another good reason not to do it!

achvfi

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Re: DONT Payoff your Mortgage Club
« Reply #3174 on: April 06, 2022, 08:33:15 AM »
With 30 year fixed mortgage rates hitting > 5%, I feel like a genius for doing cash out refinance couple years ago for 2.875% 30 year fixed and investing 60 K in proceeds.

Thanks to this thread for reinforcing the strategy.

Fomerly known as something

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Re: DONT Payoff your Mortgage Club
« Reply #3175 on: April 06, 2022, 08:38:03 AM »
With 30 year fixed mortgage rates hitting > 5%, I feel like a genius for doing cash out refinance couple years ago for 2.875% 30 year fixed and investing 60 K in proceeds.

Thanks to this thread for reinforcing the strategy.

Heck, I super excited I got locked back in 2 weeks ago at 3.875%.  Should be signing paperwork sometime next week I think.  CA ďclosingĒ on new purchases are different.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #3176 on: April 06, 2022, 08:47:12 AM »
With 30 year fixed mortgage rates hitting > 5%, I feel like a genius for doing cash out refinance couple years ago for 2.875% 30 year fixed and investing 60 K in proceeds.

Thanks to this thread for reinforcing the strategy.
I'm thankful to all the folks who keep this thread bouncing along. It gives me no small thrill to read posts like yours, @achvfi. Congratulations!

On another recent thread, someone called us "haters" which is very um, impolite, IMO. In a way, they might have a point, because we don't love seeing people choose sub-optimal financial options. Cheers to everyone who has embraced their long, lean mortgages.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #3177 on: April 06, 2022, 09:48:34 AM »
I believe in the DPYM club strategy for myself, at the rates that we've seen during much of the last ten years.

I also don't go over to the mortgage payoff thread and rain on their parades, even as I believe they'd be richer if they'd followed the path I'm following.

joe189man

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Re: DONT Payoff your Mortgage Club
« Reply #3178 on: April 06, 2022, 10:04:01 AM »
But i believe DW would never agree, she is debt averse
And this is another good reason not to do it!

Yeah - i kept this idea in my brain and brought it up here to see how crazy the brain trust thought it was, i dont think i will even bring it up with DW. At current rates, at this refi it would increase total payment by $1,070, while Decreasing principal payments by ~$90 and increase interest payments by ~$1,160 per month over our current 2.875% rate

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #3179 on: April 06, 2022, 10:10:41 AM »
With 30 year fixed mortgage rates hitting > 5%, I feel like a genius for doing cash out refinance couple years ago for 2.875% 30 year fixed and investing 60 K in proceeds.

Thanks to this thread for reinforcing the strategy.
I'm thankful to all the folks who keep this thread bouncing along. It gives me no small thrill to read posts like yours, @achvfi. Congratulations!

On another recent thread, someone called us "haters" which is very um, impolite, IMO. In a way, they might have a point, because we don't love seeing people choose sub-optimal financial options. Cheers to everyone who has embraced their long, lean mortgages.

who's calling us "haters"?

Psychstache

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Re: DONT Payoff your Mortgage Club
« Reply #3180 on: April 06, 2022, 11:06:14 AM »
who's calling us "haters"?

Antiha?

achvfi

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Re: DONT Payoff your Mortgage Club
« Reply #3181 on: April 06, 2022, 02:11:41 PM »
With 30 year fixed mortgage rates hitting > 5%, I feel like a genius for doing cash out refinance couple years ago for 2.875% 30 year fixed and investing 60 K in proceeds.

Thanks to this thread for reinforcing the strategy.
I'm thankful to all the folks who keep this thread bouncing along. It gives me no small thrill to read posts like yours, @achvfi. Congratulations!

On another recent thread, someone called us "haters" which is very um, impolite, IMO. In a way, they might have a point, because we don't love seeing people choose sub-optimal financial options. Cheers to everyone who has embraced their long, lean mortgages.

who's calling us "haters"?

:) I think DPYM is an advance concept for many to digest. Its hard to convince people, what we can do is point people to it and people have to go on their own journey to accept it.

I had trouble convincing my dear wife about DPYM and even worse when I wanted to do cash out refinance to invest, she wouldn't let me at first and even brought in my father in law to convince me not to.

By the time I got a reluctant go ahead from her after months, we probably missed out about 50% gain on the invested cash. Still I am happy we did it and made good returns from it.

Telecaster

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Re: DONT Payoff your Mortgage Club
« Reply #3182 on: April 06, 2022, 07:32:19 PM »
Some posters have been, uh, a little evangelical about promoting the DPYM Club.   Perhaps a bit too strong at times. 

One thing to keep in mind, is the that PYM Club always talks about the feeling of not having a mortgage.  You can't rationalize with someone about how they feel.   At least not forcefully.   It will just cause them to retreat and dig in.  That might be the reason for the "hater" comment.

However, with the perspective of hindsight and nearing the end of my accumulation journey, I can see the power of compounding taking over.   The hundred dollars I didn't pay on my mortgage 20 years ago is worth something like $550 today.   In not very many years, it will be $1000.   But in the early years that $100 would be come $108.  Big whoop.   Hard to see much benefit. 

Fomerly known as something

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Re: DONT Payoff your Mortgage Club
« Reply #3183 on: April 06, 2022, 08:00:42 PM »
Some posters have been, uh, a little evangelical about promoting the DPYM Club.   Perhaps a bit too strong at times. 

One thing to keep in mind, is the that PYM Club always talks about the feeling of not having a mortgage.  You can't rationalize with someone about how they feel.   At least not forcefully.   It will just cause them to retreat and dig in.  That might be the reason for the "hater" comment.

However, with the perspective of hindsight and nearing the end of my accumulation journey, I can see the power of compounding taking over.   The hundred dollars I didn't pay on my mortgage 20 years ago is worth something like $550 today.   In not very many years, it will be $1000.   But in the early years that $100 would be come $108.  Big whoop.   Hard to see much benefit.

I became a ďhaterĒ because I paid off my mortgage, and I felt meh.  Maybe if I hadnít lived n an area where taxes were still $500 a month I dunno.  I will say taking out a mortgage on the next home when I could have paid cash was the best decision I could have made.  (Although it might be a bit of happy market timing with being able to double my money from 2017 to 2021 in the market).

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #3184 on: April 06, 2022, 11:38:22 PM »
Some posters have been, uh, a little evangelical about promoting the DPYM Club.   Perhaps a bit too strong at times. 

One thing to keep in mind, is the that PYM Club always talks about the feeling of not having a mortgage.  You can't rationalize with someone about how they feel.   At least not forcefully.   It will just cause them to retreat and dig in.  That might be the reason for the "hater" comment.

However, with the perspective of hindsight and nearing the end of my accumulation journey, I can see the power of compounding taking over.   The hundred dollars I didn't pay on my mortgage 20 years ago is worth something like $550 today.   In not very many years, it will be $1000.   But in the early years that $100 would be come $108.  Big whoop.   Hard to see much benefit.
What people who kill the mortgage first don't understand is the power of compound interest. When I was just starting out, the mortgage payoff seemed almost insurmountable. Never would I have imagined that my investments would grow to the heights they have. I could smite that mortgage many times over these days. You want to talk about an amazing feeling, wowza!

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #3185 on: April 07, 2022, 12:29:59 AM »
Some posters have been, uh, a little evangelical about promoting the DPYM Club.   Perhaps a bit too strong at times. 
Hmmm, I think you've got the sequence a little mixed up. When the payoff threads started, some people didn't realize that they were unlike almost any other thread on the forum. They were exclusively for celebration, not discussion. Zero discussion. The mere idea that it was not up for examination was unfathomable to those of us who came to MMM when facepunches were the order of the day, and all expenditures were analyzed for maximum effectiveness.

Why this particular topic was so different was a mystery to a number of people, including myself. After some behind-the-scenes discussion, the DPOYM Club was started. So no one was promoting/evangelizing the club before it existed. Nowadays, DPOYM supporters pretty much avoid commenting in the Payoff threads.

Recently, a newbie wandered into a payoff thread and started asking probing questions. They were gently invited to join the party at the DPOYM Club, which they did. What may have seemed evangelical to someone who doesn't know the back story was actually an effort to prevent a newb from getting their ass handed to them.

So here's how it works these days:

If you want celebration without discussion, see: various Payoff threads.

If you want to figure out what's optimal for your situation, come chat with us here. Sometimes paying off the mortgage is the best option. Only after a lot of other boxes are checked, of course ;-)


solon

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Re: DONT Payoff your Mortgage Club
« Reply #3186 on: April 07, 2022, 05:42:57 AM »
What's amazing to me is that nearly everyone can grasp this concept:

     If you got a raise that is less than inflation, you're losing money.

But so many can't grasp this concept:

     If your investment returns are less than the index, you're losing money.

In my mind these are identical concepts. It is urgent - critical - that I make index returns. Just as critical as earning an inflation raise.

And when someone says, "There's no feeling like being debt free", I'm thinking, "You're going backward! You're drowning! What do feelings have to do with it?!"

deborah

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Re: DONT Payoff your Mortgage Club
« Reply #3187 on: April 07, 2022, 06:17:56 AM »
Thatís not quite true - if your returns are less than the index youíre not making as much money as you could. Youíre probably still making money.

Itís probably not optimal.

However, when I was a child, I can remember debt collectors visiting. I vowed that would never happen to me. So, to me, the peace of mind when I had paid off my mortgage was worth suboptimal performance.

I guess that others have similar reactions and trade offs. But Iím never going to say that everything I have done was optimal, and Iím fairly sure that we all have suboptimal performance in some area of our finances. Part of that is to ensure that we (and our partners) feel comfortable with what weíre doing. Itís not optimal to have a divorce either.

But the DPOYM Club performs a very worthwhile function of showing that, in many cases, not over contributing is a very good thing.

achvfi

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Re: DONT Payoff your Mortgage Club
« Reply #3188 on: April 07, 2022, 08:34:11 AM »
What people who kill the mortgage first don't understand is the power of compound interest. When I was just starting out, the mortgage payoff seemed almost insurmountable. Never would I have imagined that my investments would grow to the heights they have. I could smite that mortgage many times over these days. You want to talk about an amazing feeling, wowza!
I was wondering about current higher inflation conditions, buying a house in general and even better having a fixed low interest mortgage is such a great inflation hedge.

10 years ago I was renting a small place and same house now rents for more than double the price if you can find one.

Savings are now so big and if we can invest it for long term in securities that can beat inflation now we are adding power of compounding to the mix.

We keep the housing costs low while compounding the assets and cashflows from it. An efficient way to work towards completing financial independence pie.

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Re: DONT Payoff your Mortgage Club
« Reply #3189 on: April 07, 2022, 03:21:19 PM »
I was wondering about current higher inflation conditions, buying a house in general and even better having a fixed low interest mortgage is such a great inflation hedge.

10 years ago I was renting a small place and same house now rents for more than double the price if you can find one.

Savings are now so big and if we can invest it for long term in securities that can beat inflation now we are adding power of compounding to the mix.

We keep the housing costs low while compounding the assets and cashflows from it. An efficient way to work towards completing financial independence pie.

Inflation is one of the best reasons to not pay off your mortgage.   The long term inflation rate is about 3.5%.   If your mortgage is around 3.5% or so that means you are getting use of the money for free, or something close to it.   That's a pretty sweet deal. 

But the best reason is that not to pay off your mortgage, is that you would be using full valued dollars now in order to save puny, inflation valued dollars in the future.   If you want some laughs, ask your parents what their first mortgage payment was.   It was probably some laughably small number.  But to them at the time, it was probably a bunch of money.   

Part of the appeal of paying down the mortgage is you have this great big payment you want to get rid of.  But it gets small all by itself if you wait long enough.   

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Re: DONT Payoff your Mortgage Club
« Reply #3190 on: April 07, 2022, 03:29:09 PM »
However, when I was a child, I can remember debt collectors visiting. I vowed that would never happen to me. So, to me, the peace of mind when I had paid off my mortgage was worth suboptimal performance.

I guess that others have similar reactions and trade offs. But Iím never going to say that everything I have done was optimal, and Iím fairly sure that we all have suboptimal performance in some area of our finances. Part of that is to ensure that we (and our partners) feel comfortable with what weíre doing. Itís not optimal to have a divorce either.

Totally agree.  In the MMM community in general and the DPYM Club in particular, I think we get a little too fixated on optimization.   Having a good feeling is worth something.   If you understand the costs of paying off the mortgage early, and still want that feeling, then go for it. 


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Re: DONT Payoff your Mortgage Club
« Reply #3191 on: April 07, 2022, 04:02:46 PM »
However, when I was a child, I can remember debt collectors visiting. I vowed that would never happen to me. So, to me, the peace of mind when I had paid off my mortgage was worth suboptimal performance.

I guess that others have similar reactions and trade offs. But Iím never going to say that everything I have done was optimal, and Iím fairly sure that we all have suboptimal performance in some area of our finances. Part of that is to ensure that we (and our partners) feel comfortable with what weíre doing. Itís not optimal to have a divorce either.

Totally agree.  In the MMM community in general and the DPYM Club in particular, I think we get a little too fixated on optimization.   Having a good feeling is worth something.   If you understand the costs of paying off the mortgage early, and still want that feeling, then go for it.

It feels about like getting a raise that is smaller than inflation.

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Re: DONT Payoff your Mortgage Club
« Reply #3192 on: April 07, 2022, 04:06:12 PM »
However, when I was a child, I can remember debt collectors visiting. I vowed that would never happen to me. So, to me, the peace of mind when I had paid off my mortgage was worth suboptimal performance.

I guess that others have similar reactions and trade offs. But Iím never going to say that everything I have done was optimal, and Iím fairly sure that we all have suboptimal performance in some area of our finances. Part of that is to ensure that we (and our partners) feel comfortable with what weíre doing. Itís not optimal to have a divorce either.

Totally agree.  In the MMM community in general and the DPYM Club in particular, I think we get a little too fixated on optimization.   Having a good feeling is worth something.   If you understand the costs of paying off the mortgage early, and still want that feeling, then go for it.

Did you not see that I didnít get a great feeling when I paid mine off in 2016.  To the point that when I moved 1.5 years later I got a mortgage?  I felt for the most part indifferent at that point.  Maybe itís because Iíve always run the numbers before buying a home.  Iím perfectly fine with the cost of obtaining my future home.

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Re: DONT Payoff your Mortgage Club
« Reply #3193 on: April 07, 2022, 05:23:55 PM »

However, when I was a child, I can remember debt collectors visiting. I vowed that would never happen to me. So, to me, the peace of mind when I had paid off my mortgage was worth suboptimal performance.


This is something Iíve struggled to understand. To me, having a big pile of money is the biggest security blanket, the best defense against debt collectors. You donít escape payments by paying off your mortgage - you just make them smaller. Youíve still got taxes and insurance. There are still emergency repairs and basic maintenance. Fail to promptly address those and you are just as likely to lose your home. A bigger pile of money helps with all of that, and the continued mortgage payments and then some. I hear people say not having a mortgage helps them sleep better at night. I canít really relate. My PI payments are a pretty minor portion of our monthly expenses - Iím worried about how to cover the other 80%. Which is why I prefer saving those dollars instead of putting them into my home.

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Re: DONT Payoff your Mortgage Club
« Reply #3194 on: April 07, 2022, 06:37:51 PM »
Did you not see that I didnít get a great feeling when I paid mine off in 2016.  To the point that when I moved 1.5 years later I got a mortgage? 

You didn't.  And I don't.  And the most of the people here don't.  But some people do.  And neither you nor I are in a position to place a price tag on their feelings. The best and most we can do is make sure people undersand the implications of paying down the mortgage.  Which sadly, many people don't.

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Re: DONT Payoff your Mortgage Club
« Reply #3195 on: April 07, 2022, 07:35:40 PM »
Did you not see that I didnít get a great feeling when I paid mine off in 2016.  To the point that when I moved 1.5 years later I got a mortgage? 

You didn't.  And I don't.  And the most of the people here don't.  But some people do.  And neither you nor I are in a position to place a price tag on their feelings. The best and most we can do is make sure people undersand the implications of paying down the mortgage.  Which sadly, many people don't.
Sorry, I completely disagree. Mastering your "feelings" is the whole damn point of mustachianism.

Ooh, the following things might make a lot of people "feel" great:
- Private jet/yacht
- Personal limo - with driver, of course
- Monster trucks/multiple ORV's/"toy" haulers
- Lamborghini/Maserati/Bentley, etc.
- Designer clothing (see: Birkin handbags, Louboutin footwear)
- Designer hair/make-up/mani-pedi
- Posh private schools
- Personal staff (hairstylist, makeup artist, masseuse, personal trainer, chef, etc.)
- Box season seats to [fill in the blank] team(s).
- Fancy pants alcohol labels, designed to impress.

Not an exhaustive list by any means, and mustachians freely spend their money where their passion is, but FFS, plenty of people buy this shit and more because it makes them "feel" good.

Note to @deborah, and all our friends who live in places where mortgages aren't as advantaged as they are in the USA: not throwing shade at you. It's a much harder decision. Well, except during inflationary times.

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Re: DONT Payoff your Mortgage Club
« Reply #3196 on: April 08, 2022, 12:16:20 AM »
Donít hate the hater hate the game

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Re: DONT Payoff your Mortgage Club
« Reply #3197 on: April 08, 2022, 09:37:14 AM »
I think feelings are a way of checking whether your choices align with your values. The opulent things you list wouldn't feel as good to us because we have spent some time pondering what we truly value, and...it ain't that.

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Re: DONT Payoff your Mortgage Club
« Reply #3198 on: April 08, 2022, 12:40:52 PM »
I think feelings are a way of checking whether your choices align with your values. The opulent things you list wouldn't feel as good to us because we have spent some time pondering what we truly value, and...it ain't that.
Feelings lie. Ever been scared to do something that turned out just fine?

The list wasn't designed to be anything more than a top-of-mind sampling.

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Re: DONT Payoff your Mortgage Club
« Reply #3199 on: April 08, 2022, 12:54:41 PM »
Speaking of feelings, I'd like to dive back into our shared purpose:

my wife has a taxable investment account (it's really her money, from a deceased relative) with Edward Jones. I've succeeded in prying some cash lose from investments in the forms of dividends/capital gains. So now the chance is here to live out our values...transferring that money away from the rabid wolves of EJ and into productive investments.

First phone call has unlocked $3,500...more to come!