Author Topic: Do you regret paying off your mortgage early?  (Read 98070 times)

nereo

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Re: Do you regret paying off your mortgage early?
« Reply #600 on: December 05, 2017, 05:30:50 AM »

The next few years will really amuse you
So you are not a buy low sell high person?. 

Wait...I thought the goal was to buy low when everything is on sale, right?

I think part of the disconnect here is that we aren't even talking about the same thing. For the overwhelmingly large percentage of people the mortgage payoff scenario involves monthly payoffs over many dozens of months, not lump sum. Call it DOA if you like. 
You are constantly throwing out terms like "reversion to the mean" without defining the time period and suggest market timing but say you "don't play [that] game". You stick with a suspicious and erroneous 7 year time-frame with little reason - the justification about the poster up-thread doesn't even hold water. Explanations from multiple posters about why a 7-year time-frame is not valid and why you should look at more than just the most recent 16 years have gone unanswered.

The mantra here is not 'buy low' but rather 'buy and hold'.  Those aren't remotely the same thing.

FWIW I'm not even in the hard-core "never pay off your mortgage camp" though I am convinced its better for many people. I know that there are reasons for some that make sense, such as cash-flow, stress and when you've "won the game". But you try to bring in historical simulations but do it in ways that are highly biased towards your position.  You talk endlessly about 'the market' but then talk about how you have 'far better options" that earn "double or triple" which you "understand and can control". Yet you still seem to be advocating paying down your mortgage, despite these amazing and "less volatile' investment opportunities available to you.  How you've made that calculation I can't even begin to comprehend.
In sum you aren't representative of the people for whom this discussion is for (i.e. most people).

Not taking advantage of tax-advantaged accounts because one wants to pay down their mortgage makes no financial sense (to me) for anyone who is above the 15% tax bracket.  For every dollar I put into my tax-advantaged accounts I save 25% in taxes. As Telecaster noted, that's too risky not to take advantage of.
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slythr

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Re: Do you regret paying off your mortgage early?
« Reply #601 on: December 05, 2017, 07:09:11 AM »
Gosh, I chose an interesting time to excuse myself from this debate...

Does anyone else find it interesting that every single one of "slythr's" posts to date are on this thread?. "slythr" has literally not a posted a single word anywhere else on this whole forum. At this writing, "slythr" has 39 posts.

Y'all can debate and discuss whatever that means while I go back to calmly contemplating my navel, or brand-new car shopping, or....something.

Ahem...soon to be 40+ posts. Maybe even 50.
What is the opportunity cost of 5000+ posts?
I find post count correlation to be interesting, but everyone has their contemplating thing.

boarder42

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Re: Do you regret paying off your mortgage early?
« Reply #602 on: December 05, 2017, 07:33:45 AM »
Gosh, I chose an interesting time to excuse myself from this debate...

Does anyone else find it interesting that every single one of "slythr's" posts to date are on this thread?. "slythr" has literally not a posted a single word anywhere else on this whole forum. At this writing, "slythr" has 39 posts.

Y'all can debate and discuss whatever that means while I go back to calmly contemplating my navel, or brand-new car shopping, or....something.

Ahem...soon to be 40+ posts. Maybe even 50.
What is the opportunity cost of 5000+ posts?
I find post count correlation to be interesting, but everyone has their contemplating thing.

Dicey is FIREd so really nothing other than trying to help people.  I'd say if people are acting on any of your comments thus far you have possibly done some damage to the path people are / were on to FIRE. 

Outside of the incorrect statements about mortgages and incorrect path you have been a strong proponent of trying to time the market.  And have actively dismissed the market in the same post because you dont rely on it.  You havent actually listened to or understood anyone's counter points to your statements or acknowledge the forum in which you are posting.  Regardless of your personal view and very fuzzy math if we can even call it math anymore, you are in a FIRE forum that is built upon quitting work based on average market returns over time and the general populous here buys into this.  Not a point made thus far has changed the underlying fundamentals of how the markets have functioned in the past and should function in the future.  As was pointed out by JLee you're much less diversified than any person here who owns VTSAX with your personal companies.  Which leads to a higher risk of failure for you personally that would make paying down a mortgage vs re investing in your companies to make more profit make sense.  B/c you have a much much higher risk of total financial failure in owning your own individual companies than owning the total US stock market.
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slythr

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Re: Do you regret paying off your mortgage early?
« Reply #603 on: December 05, 2017, 08:15:33 AM »


I think part of the disconnect here is that we aren't even talking about the same thing. For the overwhelmingly large percentage of people the mortgage payoff scenario involves monthly payoffs over many dozens of months, not lump sum. Call it DOA if you like. 
You are constantly throwing out terms like "reversion to the mean" without defining the time period and suggest market timing but say you "don't play [that] game". You stick with a suspicious and erroneous 7 year time-frame with little reason - the justification about the poster up-thread doesn't even hold water. Explanations from multiple posters about why a 7-year time-frame is not valid and why you should look at more than just the most recent 16 years have gone unanswered.

The mantra here is not 'buy low' but rather 'buy and hold'.  Those aren't remotely the same thing.

FWIW I'm not even in the hard-core "never pay off your mortgage camp" though I am convinced its better for many people. I know that there are reasons for some that make sense, such as cash-flow, stress and when you've "won the game". But you try to bring in historical simulations but do it in ways that are highly biased towards your position.  You talk endlessly about 'the market' but then talk about how you have 'far better options" that earn "double or triple" which you "understand and can control". Yet you still seem to be advocating paying down your mortgage, despite these amazing and "less volatile' investment opportunities available to you.  How you've made that calculation I can't even begin to comprehend.
In sum you aren't representative of the people for whom this discussion is for (i.e. most people).

Not taking advantage of tax-advantaged accounts because one wants to pay down their mortgage makes no financial sense (to me) for anyone who is above the 15% tax bracket.  For every dollar I put into my tax-advantaged accounts I save 25% in taxes. As Telecaster noted, that's too risky not to take advantage of.

First off, congratulations to all of those who have paid off their mortgage and don't regret it.
AGAIN.  CONGRATULATIONS to those who have no regrets. You know, the title of the thread and all. 
We seem to veer off that point from time to time.  Not sure why so many non pay off non-regretter supporters linger here.  Like sitting in the visitors section, but I digress.  We do need a spirited debate afterall.

To your points:
I have defined the reversion to the mean time period you reference multiple times in this thread. I noted the market has been on a tear for 8.5 years, and over the next decade reversion is likely.  So 10 years.

As far as the equity market vs alternative controlled investments, I don't doubt it is hard to comprehend.  That is why few people do it, and why it is successful. And you are exactly correct, I am not representative of the people whom this discussion is generally for.  I have stated that point as well, numerous times. I am not representative of most people on this board by design.  That is part of the beauty of this debate.  People not invested in advancing their position and being "right" or having the last word can read and see that even people who arrived at the destination a completely different way can still share the same goal.  I don't like certain debt or certain risk for a variety of reasons.  They may be different reasons than yours, but they are valid.  But no one asks why.  Instead they assume, then attack.

And this 7 year issue you keep bringing up. Dude....I have answered it multiple times, yet you bring it up again.  Are you trying to be annoying now? (just messing with you - maybe).  Here is what I said....TO YOU...yesterday at 6:34 on page 12 of this thread:

I went with the 7 year timeframe because that is how long the poster I was responding to owned his home.
And that is also the historical average for ownership. Somehow that response, to that guy about his 7 year ownership experience somehow turned into my defacto position on this issue, which isn't the case


Here is the original post.


I looked back at my own $200k/4.25% mortgage that my wife and I took out in 2010, put every extra cent (after retirement accounts) into, and paid off a few years later. I looked over our past extra payments and put them into a spreadsheet simulating what would have happened if we had instead put the extra payments into VTSAX. Before even considering the tax benefit of extending the mortgage interest deduction, we would have come out ahead by $130k by the time we sold that house earlier in 2017.

$130k divided by seven years is a lot more than your "max benefit" that you state.

I'm not arguing that my situation is typical of all time periods. If we had instead bought the house in 2005 the numbers would surely be different. I'd like to run those numbers when I have a bit more time, just to see.

He brought up 7 years.  And he brought up a separate timeframe of 2005.  So I went back 5 years further and got the numbers just to look. For myself.  I didn't know what they would say.  I was curious.  It just so happens it supports my position some.  It may even be convenient, but it is still true and it still happened. That post is due to SeattleCyclone's timeframe, not mine. 

And prioritizing paying down a mortgage over other investments, even tax advantaged ones can make sense in certain circumstances.  But that is not what I was choosing.  I would choose the mortgage over equity accounts at this point in time, regardless of the tax saving on personal income.  The tax advantaged part doesn't affect me as much as you or most others, because I have various ways of deferring or avoiding taxes through business long before it passes through to my 1040.  Most people on here look at an IRA of $5500, or an extra few thousand into their 401K as their option. I think that is what Boarder was alluding to.  I look at section 179 for $100K-$200K or 1031 exchanges or buying commercial property and the depreciation schedule when I look at tax advantaged moves. I think we play in different ends of the pool.

Have you thought to consider that not everyone shows income every year?  You know, some people have carry forward losses.  Some people buy businesses just for the carry forward loss.

I take a significant amount of various market risks in my income generation.  Unlike most people here who are W-2 salaried, their income is fairly risk free and likely not exposed to markets so they get their risk on from their investments outside of income. And the most common way is through equity investing, or their primary home.  So that is why this discussion revolves around those two items.

But that isn't the extent of my circle.  I get all the risk one wants on the income side, so I have no room left on the investment side in order to maintain balance.  Becuase of that I prefer fixed guaranteed investment or payoffs, which include a mortgage.  It's not because I can't do the calculations.  I do them everyday.

What is really interesting is I have lots of various risk exposure on the income side.  And I do business with people just like you and all the other keep the mortgage people every day.  And Confirmation bias?  I have every reason to be on the keep side.  I make money with that position.  I make money when others have that position. I used to be on that side. It was a good position 8 years ago.

And yet it's still not my personal position now. You don't have to understand it or comprehend.  Only I have to.

I am not in the hardcore payoff the mortgage camp either.  I am not hardcore in either camp.  I just don't care for people coming on here, a congrats on payoff thread, and dumping their shit when there are several other threads where that is appropriate. Including a thread that is just about keeping the mortgage.  Go bump that one up to the top.  The fact that I don't subscribe to most of the reasons for leverage, such as the 4% SWR, or expectations of future average equity market performance only help to fend off the attacks.  But don't be fooled.  Many of you guys are abnormally viscous with your position, even overreacting because a name was accidentally misspelled?. That I don't understand. It is likely why others don't post here.  They don't want to get attacked and I understand that.

To each their own.  I have repeatedly said the main thing is understanding your choice, regardless of which one it is.  I completely understand mine. It has worked out very well for me and many others.  For some, they have regrets.  Hopefully they have taken action on those regrets and done something about it.
« Last Edit: December 05, 2017, 08:32:52 AM by slythr »

NorthernBlitz

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Re: Do you regret paying off your mortgage early?
« Reply #604 on: December 05, 2017, 08:15:39 AM »
Wait...I thought the goal was to buy low when everything is on sale, right?

^ That's all you need to know right there folks.

I thought the goal was to buy all the time because we never know when it's on sale or when it's over valued. We only know that in 20 - 30 years from now it will almost certainly be higher than it is now.

ACyclist

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Re: Do you regret paying off your mortgage early?
« Reply #605 on: December 05, 2017, 08:19:43 AM »
This is an interesting topic.  The board has me convinced that I should invest instead of continuing to pay down the mortgage.  The market makes me nervous as well, because I believe there will be a correction.  I'm currently saving up to buy some VTSAX, which I should have enough by April.  Those shares are expensive to get into ($75 fee). If I am investing in large chunks, it could end up being horrible market timing.  Not that I am trying to time, but I can probably only afford maybe one investment per year.  10K at one wack makes me nervous.

Also, there is a Fidelity fund that I can get for less induction fee that are the same type of investment.  Example: FSTVX

slythr

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Re: Do you regret paying off your mortgage early?
« Reply #606 on: December 05, 2017, 08:23:04 AM »
Gosh, I chose an interesting time to excuse myself from this debate...

Does anyone else find it interesting that every single one of "slythr's" posts to date are on this thread?. "slythr" has literally not a posted a single word anywhere else on this whole forum. At this writing, "slythr" has 39 posts.

Y'all can debate and discuss whatever that means while I go back to calmly contemplating my navel, or brand-new car shopping, or....something.

Ahem...soon to be 40+ posts. Maybe even 50.
What is the opportunity cost of 5000+ posts?
I find post count correlation to be interesting, but everyone has their contemplating thing.

Dicey is FIREd so really nothing other than trying to help people.  I'd say if people are acting on any of your comments thus far you have possibly done some damage to the path people are / were on to FIRE. 

Outside of the incorrect statements about mortgages and incorrect path you have been a strong proponent of trying to time the market.  And have actively dismissed the market in the same post because you dont rely on it.  You havent actually listened to or understood anyone's counter points to your statements or acknowledge the forum in which you are posting.  Regardless of your personal view and very fuzzy math if we can even call it math anymore, you are in a FIRE forum that is built upon quitting work based on average market returns over time and the general populous here buys into this.  Not a point made thus far has changed the underlying fundamentals of how the markets have functioned in the past and should function in the future.  As was pointed out by JLee you're much less diversified than any person here who owns VTSAX with your personal companies.  Which leads to a higher risk of failure for you personally that would make paying down a mortgage vs re investing in your companies to make more profit make sense.  B/c you have a much much higher risk of total financial failure in owning your own individual companies than owning the total US stock market.

I wasn't talking about Dicey

And if anyone is changing their path due solely to some anonymous internet guy on a subforum or an early retirement blog then that path wasn't that solid to begin with.

This is a CONGRATULATIONS thread, mostly about a mojority of responders NOT regretting their accomplishments, so lets try and keep it there. If you have regrets, start a new thread about them.

nereo

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Re: Do you regret paying off your mortgage early?
« Reply #607 on: December 05, 2017, 08:52:13 AM »

This is a CONGRATULATIONS thread, mostly about a mojority of responders NOT regretting their accomplishments, so lets try and keep it there. If you have regrets, start a new thread about them.

The subject of this thread is: Do you regret paying off your mortgage early.

You either deliberately ignoring that or just flaming. Yes, you've repeated your assumptions, but not addressed the critiques on why they are poor assumptions to begin with.  You are simultaneously arguing that the last 17 years were not particularly great with the market and then suggesting we need a reversion to the mean (correction/recession) - and conclude its 'common sense' and definitely not market timing - conclusions that don't sit well with one another. Ironically your arguments keep pointing toward doing better by not paying off your mortgage, including your preferred strategy of earning 2-3x the market buying businesses you control.  It seems like you are just yelling more than debating or providing a constructive argument.
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slythr

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Re: Do you regret paying off your mortgage early?
« Reply #608 on: December 05, 2017, 09:26:01 AM »


The subject of this thread is: Do you regret paying off your mortgage early.

You either deliberately ignoring that or just flaming. Yes, you've repeated your assumptions, but not addressed the critiques on why they are poor assumptions to begin with.  You are simultaneously arguing that the last 17 years were not particularly great with the market and then suggesting we need a reversion to the mean (correction/recession) - and conclude its 'common sense' and definitely not market timing - conclusions that don't sit well with one another. Ironically your arguments keep pointing toward doing better by not paying off your mortgage, including your preferred strategy of earning 2-3x the market buying businesses you control.  It seems like you are just yelling more than debating or providing a constructive argument.

That is right.  The subject is do you regret paying off your mortgage early?
And by Noralenderbee's calculations most do not
I counted the answers from posters who have actually paid off a mortgage, counting only since the thread was revived (2017).
Did not regret it: 21
Regretted it: 3
Paid off the first time, decided not to pay off the second time: 3

21 of 27, or 78%, don't regret it.


and that 78% turned this thread into a congratulation we don't regret it thread.
I have provided my assumptions and explanations for them. They are opinions, after all this is an opinion thread.  I am not concerned whether it satisfies your subjective analysis. 
« Last Edit: December 05, 2017, 09:27:55 AM by slythr »

nereo

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Re: Do you regret paying off your mortgage early?
« Reply #609 on: December 05, 2017, 09:39:19 AM »
facts are opinions and the subject of the thread isn't what it says because it better fits your narrative?

there's a discussion to be had and things to be learned, but not when you can declare it to be whatever you want it to be.
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dandarc

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Re: Do you regret paying off your mortgage early?
« Reply #610 on: December 05, 2017, 09:46:20 AM »
What's with the sudden influx of trolls?  Went about 4 years on this forum with nobody on my Ignore list, now have 4 in the last couple of months.

slythr

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Re: Do you regret paying off your mortgage early?
« Reply #611 on: December 05, 2017, 10:03:29 AM »
What's with the sudden influx of trolls?  Went about 4 years on this forum with nobody on my Ignore list, now have 4 in the last couple of months.

That's funny.
I was just thinking the troll tag was going to come out
That happens when responses run out, we resort to "troll"

nereo

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Re: Do you regret paying off your mortgage early?
« Reply #612 on: December 05, 2017, 10:12:42 AM »
pretty much what happens when you tell people that a thread entitled "do you regret paying off your mortgage" is for celebratory statements only, and that "if you have regrets, start a new thread about them." 

That's the most direct way of telling those who don't agree with you to f-off that I've heard on this forum for a long time. You have literally co-opted a thread that you didn't start or participate in until very recently.

FWIW we have a threads specifically for celebrating paying off a mortgage and a mortgage payoff club.
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arebelspy

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Re: Do you regret paying off your mortgage early?
« Reply #613 on: December 05, 2017, 10:16:14 AM »
Mod Note: Please don't feed the trolls.

Probably best for everyone to take a break from this thread for a few days. 

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Re: Do you regret paying off your mortgage early?
« Reply #614 on: December 05, 2017, 10:21:51 AM »
Back on topic, no ragrets here.  I have enough stuff to lose sleep over.  Knowing that the mortgage is paid (and in my state is also exempt from execution) is not one of them.  It's quite comforting in fact. 

NorthernBlitz

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Re: Do you regret paying off your mortgage early?
« Reply #615 on: December 05, 2017, 10:55:05 AM »
This is an interesting topic.  The board has me convinced that I should invest instead of continuing to pay down the mortgage.  The market makes me nervous as well, because I believe there will be a correction.  I'm currently saving up to buy some VTSAX, which I should have enough by April.  Those shares are expensive to get into ($75 fee). If I am investing in large chunks, it could end up being horrible market timing.  Not that I am trying to time, but I can probably only afford maybe one investment per year.  10K at one wack makes me nervous.

Also, there is a Fidelity fund that I can get for less induction fee that are the same type of investment.  Example: FSTVX

I know that this is off topic, but who is charging you that $75 fee?

I thought that there was no commission if you buy from Vanguard (you'd need to set up an account there, but that's pretty easy to do).

You can also get the following products which are essentially the same as VTSAX:
- VTSMX This is the same total market index, but the MER is slightly higher. You would roll into VTSAX when you balance passes $10k
- VTI This is their "total market" ETF. It's the same thing, but an ETF instead of a mutual fund.

I thought that VTSMX / VTSAX / VTI were all available commission free if you get them from Vanguard (you would need to open a brokerage account).

From Vanguard's Website:

Mutual Fund Fees: https://investor.vanguard.com/mutual-funds/fees
<Contains a link to a list of funds with commissions...the list doesn't include VTSMX or VTSAX (VTI is an ETF)>

No fees on ETFs: https://investor.vanguard.com/etf/fees

If someone is charging you commissions on these funds, you might want to consider opening a Vanguard account and buying them yourself.

JLee

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Re: Do you regret paying off your mortgage early?
« Reply #616 on: December 05, 2017, 11:12:29 AM »
This is an interesting topic.  The board has me convinced that I should invest instead of continuing to pay down the mortgage.  The market makes me nervous as well, because I believe there will be a correction.  I'm currently saving up to buy some VTSAX, which I should have enough by April.  Those shares are expensive to get into ($75 fee). If I am investing in large chunks, it could end up being horrible market timing.  Not that I am trying to time, but I can probably only afford maybe one investment per year.  10K at one wack makes me nervous.

Also, there is a Fidelity fund that I can get for less induction fee that are the same type of investment.  Example: FSTVX

I know that this is off topic, but who is charging you that $75 fee?

I thought that there was no commission if you buy from Vanguard (you'd need to set up an account there, but that's pretty easy to do).

You can also get the following products which are essentially the same as VTSAX:
- VTSMX This is the same total market index, but the MER is slightly higher. You would roll into VTSAX when you balance passes $10k
- VTI This is their "total market" ETF. It's the same thing, but an ETF instead of a mutual fund.

I thought that VTSMX / VTSAX / VTI were all available commission free if you get them from Vanguard (you would need to open a brokerage account).

From Vanguard's Website:

Mutual Fund Fees: https://investor.vanguard.com/mutual-funds/fees
<Contains a link to a list of funds with commissions...the list doesn't include VTSMX or VTSAX (VTI is an ETF)>

No fees on ETFs: https://investor.vanguard.com/etf/fees

If someone is charging you commissions on these funds, you might want to consider opening a Vanguard account and buying them yourself.

That confused me a bit as well - I had no fees opening my Vanguard funds.

ACyclist

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Re: Do you regret paying off your mortgage early?
« Reply #617 on: December 05, 2017, 11:23:03 AM »
I have a fidelity account where we keep most of all our wealth.  They charge that fee to buy funds on the site. 

Every vanguard purchase is $75.  I think I am going to opt for similar Fidelity funds due to cost.

https://www.fidelity.com/mutual-funds/investing-ideas/index-funds

nereo

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Re: Do you regret paying off your mortgage early?
« Reply #618 on: December 05, 2017, 11:26:42 AM »
I have a fidelity account where we keep most of all our wealth.  They charge that fee to buy funds on the site. 

Every vanguard purchase is $75.  I think I am going to opt for similar Fidelity funds due to cost.

https://www.fidelity.com/mutual-funds/investing-ideas/index-funds

Fidelity has excellent index fund options, sometimes slightly beating Vanguard in cost.  Consider FUSVX (SP500 w 0.035% expense ratio) or FSTVX (total market index).  If you're with Fidelity there's little reason to buy Vanguard's equivalent index funds.
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JLee

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Re: Do you regret paying off your mortgage early?
« Reply #619 on: December 05, 2017, 11:36:23 AM »
I have a fidelity account where we keep most of all our wealth.  They charge that fee to buy funds on the site. 

Every vanguard purchase is $75.  I think I am going to opt for similar Fidelity funds due to cost.

https://www.fidelity.com/mutual-funds/investing-ideas/index-funds

I just went through the process (all the way up to the 'submit' button) to buy VTSAX and I'm not seeing a fee. Is this establishing a new account or something..different?

protostache

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Re: Do you regret paying off your mortgage early?
« Reply #620 on: December 05, 2017, 11:52:06 AM »
I have a fidelity account where we keep most of all our wealth.  They charge that fee to buy funds on the site. 

Every vanguard purchase is $75.  I think I am going to opt for similar Fidelity funds due to cost.

https://www.fidelity.com/mutual-funds/investing-ideas/index-funds

I just went through the process (all the way up to the 'submit' button) to buy VTSAX and I'm not seeing a fee. Is this establishing a new account or something..different?

VTSAX isn't actually available to buy to Fidelity retail customers, or in fact retail customers of anyone outside of Vanguard. Are y'all using employer-sponsored accounts to do this? I know ACyclist didn't actually mention VTSAX, so maybe they're buying non-Admiral funds.

JLee

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Re: Do you regret paying off your mortgage early?
« Reply #621 on: December 05, 2017, 11:54:58 AM »
I have a fidelity account where we keep most of all our wealth.  They charge that fee to buy funds on the site. 

Every vanguard purchase is $75.  I think I am going to opt for similar Fidelity funds due to cost.

https://www.fidelity.com/mutual-funds/investing-ideas/index-funds

I just went through the process (all the way up to the 'submit' button) to buy VTSAX and I'm not seeing a fee. Is this establishing a new account or something..different?

VTSAX isn't actually available to buy to Fidelity retail customers, or in fact retail customers of anyone outside of Vanguard. Are y'all using employer-sponsored accounts to do this? I know ACyclist didn't actually mention VTSAX, so maybe they're buying non-Admiral funds.

Ohhhh, I misread - they're trying to buy Vanguard funds through Fidelity.  I buy through Vanguard directly and have never had a fee, Admiral fund or not.

It's easy to establish a direct relationship with Vanguard. I have Fidelity and Vanguard accounts.

ACyclist

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Re: Do you regret paying off your mortgage early?
« Reply #622 on: December 05, 2017, 11:59:10 AM »
This is why I HATE investing, sometimes.,  I know so little about it.  I end up screwing myself.  I thought I was doing great buying some Vanguard, cause it was touted so highly, BAM...$75 fee.  I figured it was just the cost to play.  :(

I have a few vanguard funds in our fidelity acct.  I wil stop buying those and stick to transaction free Fidelity.  I suck...I suck...I suck.  :(

JLee

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Re: Do you regret paying off your mortgage early?
« Reply #623 on: December 05, 2017, 12:01:06 PM »
This is why I HATE investing, sometimes.,  I know so little about it.  I end up screwing myself.  I thought I was doing great buying some Vanguard, cause it was touted so highly, BAM...$75 fee.  I figured it was just the cost to play.  :(

I have a few vanguard funds in our fidelity acct.  I wil stop buying those and stick to transaction free Fidelity.  I suck...I suck...I suck.  :(

Don't beat yourself up over it - the best time to learn is now! :)

BTDretire

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Re: Do you regret paying off your mortgage early?
« Reply #624 on: December 05, 2017, 12:02:31 PM »
One item worth noting in this discussion is timing, re: interest rates. ;-)
Over the last 54 years in 25 of those years the interest rate for a mortgage was over 7.5%!
Would you want to invest money while paying a 7.5% mortgage?
Maybe! I tried to pick a bad time, '73' looks like a good candidate.
The average national  interest rate was about 7.7% and no favorable
chance to refinance at a lower rate for 30 years.
I'll use $100,000 as the mortgage amount.
So 7.7% for the term of the 30 year mortgage.
If you had invested in the S&P 500 in '73' the 30 year
return on a $100,000 turns that into $1,430,700.
Adjusted for inflation this is $348,950.
 Now to get complicated.
Assume you paid off your home and started investing the $713 dollars which would have been your mortgage payment at $7.7% on $100k, after 30 years you would have invested $257,400 and it would have grown to $1,799,000,
Adjusted for inflation adjusted value $438,780.
 Now it seems like you are $89,830 ahead by investing, using an historical mortgage rate and S&P gains for 1973  to 2003, that I thought looked like a bad time to invest rather than mortgage.
 I didn't get the answer I expected
 I was going to try to find a worse period, but I'm not sure I did everything right.
Looking here might give you incite into a worse period.
http://www.macrotrends.net/2526/sp-500-historical-annual-returns

Here are the tools I used to do my calculations.
http://mortgage-x.com/trends.htm
https://dqydj.com/sp-500-dividend-reinvestment-and-periodic-investment-calculator/
https://www.google.com/search?q=mortgage+interest+calculator&ie=utf-8&oe=utf-8&client=firefox-b-1


boarder42

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Re: Do you regret paying off your mortgage early?
« Reply #625 on: December 05, 2017, 12:55:19 PM »
This is why I HATE investing, sometimes.,  I know so little about it.  I end up screwing myself.  I thought I was doing great buying some Vanguard, cause it was touted so highly, BAM...$75 fee.  I figured it was just the cost to play.  :(

I have a few vanguard funds in our fidelity acct.  I wil stop buying those and stick to transaction free Fidelity.  I suck...I suck...I suck.  :(

we sent you to the JLCollinsNH stock series in one of your first posts here.  go read that and before you make any moves feel free to discuss in investor alley your plan before you act on it.  I sometimes forget people may not understand when we say VTSAX it could easily mean the fidelity fund equivalent if that is where you choose to keep your money.
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NoraLenderbee

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Re: Do you regret paying off your mortgage early?
« Reply #626 on: December 05, 2017, 01:57:09 PM »
LOL "scientific analysis." It's a freakin poll about how people FEEL. But flog away at that grease spot.
I'm sorry Nora, but as a statistician I have to take issue with the poll, and how it could be potentially interpreted.
For starters, we must consider the pool of sampled individuals.  Given the thread topic we're heavily biased towards
i) individuals who have paid off their mortgage
ii) feelings (vs analysis) towards having a mortgage.
iii) people who would participate in such a thread to begin with (I'm guilty I guess...)
by design its not going to do a good job capturing people who decided not to pay of their mortgage.

Are you serious? The poll is specifically directed toward people who have paid off. Of course it doesn't represent those who haven't paid it off. That's not bias. It's asking a specific question of a specific group with certain characteristics.

 
Quote
IOW it's biased against capturing the 'hold-a-mortgage' camp and biased towards those that paid it off.  By inclusion of the word 'regret' we invoke emotion and (i would argue) favor responses from people who have deep feelings about a mortgage.  That can illicit two different responses.  Clearly Boarder22 hates the idea of paying off a mortgage early, but many others have a deep disdain for paying a mortgage each month (which reads in sentences like: It's just so wonderful not to pay a mortgage each month!)

I appreciate that you went through the thread and tallied up the available responses, but I don't think we can say much about how people in the broader MMM community think about paying down a mortgage vs. investing. Short of polling randomly selected members (almost impossible to do with a forum poll) it might be more informative to ask a question like; at current rates which do you think is a better financial strategy for you; accelerated mortgage payments or holding your mortgage to term.

just my 2¢

I see. You think this is a poll about whether paying a mortgage is a good idea. THAT'S NOT THE QUESTION. The question is, "If you have paid off your mortgage already, how do you feel about it?" The question is 100% directed toward those who HAVE paid off. (And it is also 100% about their emotions.)

It's as if someone asked, "Parents: Do you regret having children?" and you are complaining because they didn't include childfree/childless people's opinions about whether having children was a good financial decision.

Sheesh.



Dicey

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Re: Do you regret paying off your mortgage early?
« Reply #627 on: December 05, 2017, 02:11:26 PM »
Gosh, I chose an interesting time to excuse myself from this debate...

Does anyone else find it interesting that every single one of "slythr's" posts to date are on this thread?. "slythr" has literally not a posted a single word anywhere else on this whole forum. At this writing, "slythr" has 39 posts.

Y'all can debate and discuss whatever that means while I go back to calmly contemplating my navel, or brand-new car shopping, or....something.

Ahem...soon to be 40+ posts. Maybe even 50.
What is the opportunity cost of 5000+ posts?
I find post count correlation to be interesting, but everyone has their contemplating thing.
Nice attempt at deflection, slythr, but no dice. I did NOT compare my post count to yours, though I'm flattered you noticed. (Dicey bats her long, long walrus eyelashes prettily and stubs her flipper shyly). The point is that you aren't posting anywhere else! HUGE difference!
I did it! I have a journal!
A Lot Like This
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PizzaSteve

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Re: Do you regret paying off your mortgage early?
« Reply #628 on: December 05, 2017, 03:42:27 PM »
Mod Note: Please don't feed the trolls.

Probably best for everyone to take a break from this thread for a few days. 

Cheers!

+1

I for one am enjoying hearing from people who paid it off, both pro and con.

What I am not enjoying are the random ego-driven debates about whether return on investment assumptions are reasonable or whether the risks of using leverage, interest rate arbitrage, real estate as collateral, or market equities (reversion to the mean....honestly....)are properly factored into advice for those who will be making future decisions.  Lets keep that in the proper thread.   I might point out that very few board members are qualified to perform a proper risk adjusted analysis, and in fact such an analysis may not even be possible without making a huge set of assumptions about the future that can be endlessly debated.

On topic, my wife and I have mixed feelings.  We enjoy the simplification of our lives (less hassle) but acknowledge we would have more assets if we had kept or refinanced the house.  We have a lot of equity not working for us, but it is also not material to our retirement.  We were never all that fully leveraged (20%+ down payment).  I admit to using less leverage because we didnt need to be leveraged to meet our retirement goals.  I have always been 'on plan' with or without leverage to help.  We are lucky to have income that exceeded our needs to more than meet our goals.  Perhaps that is a  factor in my decision.  Leverage was not needed to make our FI plan, but I understand that it might need to be for some more ambitious plans or lower income forum members.   For us it wasnt, so the decision wasnt a hugely passionate one for us.   I just eventually cut a check because I was tired of the loan (which at the time was small relative to our overall portfolio, less than 5%).  Why would i both be lending money via a percentage in bonds and borrowing money via a morgage?  The marginal impact eventually wasnt enough to matter, though earlier in our career we benefited from the consistent committment to stock investing for a long period.   We did have more to invest due to holding debt.
« Last Edit: December 05, 2017, 03:54:16 PM by PizzaSteve »
All posts are opinions of the author subject to independent verification by the reader.  No representations of fact are asserted regarding commercial products or services.

Pizzasteve prefers to avoid excessive critical debates.  In the event of a post, no need to reply or quote if you disagree. I am posting information meant to stand on its own and hope to avoid back and forth debating.

desertadapted

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Re: Do you regret paying off your mortgage early?
« Reply #629 on: December 05, 2017, 06:24:12 PM »
Regret?  Yes and no.  We paid off the loan on our house in ~2013.  It felt great at the time.  We were skittish coming out of the market crash and wanted a sense of control, which paying off the house gave us.  Spending time on these boards, being convinced by B42's (ahem) commitment, and being a student of the obvious, I'm aware that had I put all of the extra money into the stock market instead (we started extra payments in 2008), I'd be sitting pretty right now.  So sure, I regret it.  But my emotional experience of risk aversion means that if you offered me a home equity loan on 50% of my property value at a 3.0% rate and zero transaction costs, I wouldn't do it.  Yeah, the math indicates that I'm likely to do better investing that money over time.  But no way would I feel comfortable with the risk.  No matter how much I try, I can't unlearn the feeling of stability in the (sub-optimal) sure thing I've got in a free and clear house. 

TheWifeHalf

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Re: Do you regret paying off your mortgage early?
« Reply #630 on: December 05, 2017, 06:33:50 PM »
TheHusbandHalf and I bought our house a year before we married. In 1980 interest rates were at 12% (I believe they went a bit higher)
When they seemed to start going down, and he got a severance pay, we decided to just pay the mortgage rather than refinance, 10 years later.  That was the last thing we bought that had a monthly payment, with interest.
There were a couple of times we got car loans but only because the interest rate was 0%.

I think 1980 was similar to 2008, but maybe not? It taught us that we didn't need anything if we had to borrow money to get it.

aspiringnomad

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Re: Do you regret paying off your mortgage early?
« Reply #631 on: December 05, 2017, 07:59:40 PM »
no ragrets here.

You should get that tattoo.

Telecaster

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Re: Do you regret paying off your mortgage early?
« Reply #632 on: December 05, 2017, 08:34:13 PM »
This is why I HATE investing, sometimes.,  I know so little about it.  I end up screwing myself.  I thought I was doing great buying some Vanguard, cause it was touted so highly, BAM...$75 fee.  I figured it was just the cost to play.  :(

I have a few vanguard funds in our fidelity acct.  I wil stop buying those and stick to transaction free Fidelity.  I suck...I suck...I suck.  :(

No you don't.  Doing something wrong is how you learn to do it right.  I guarantee if you talk to 100 investors, you'll get 100 stories about mistakes.  Unless I'm one of the 100.  Then you'll get about 112 stories. 

dragoncar

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Re: Do you regret paying off your mortgage early?
« Reply #633 on: December 06, 2017, 01:35:32 AM »
Top is in


 oops wrong thread

boarder42

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Re: Do you regret paying off your mortgage early?
« Reply #634 on: December 06, 2017, 03:55:10 AM »
This is why I HATE investing, sometimes.,  I know so little about it.  I end up screwing myself.  I thought I was doing great buying some Vanguard, cause it was touted so highly, BAM...$75 fee.  I figured it was just the cost to play.  :(

I have a few vanguard funds in our fidelity acct.  I wil stop buying those and stick to transaction free Fidelity.  I suck...I suck...I suck.  :(

No you don't.  Doing something wrong is how you learn to do it right.  I guarantee if you talk to 100 investors, you'll get 100 stories about mistakes.  Unless I'm one of the 100.  Then you'll get about 112 stories.

Very true at spent 17 years as a stick picker before finding this site. That's much worse than your minor purchase snafu.
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sea_saw

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Re: Do you regret paying off your mortgage early?
« Reply #635 on: December 06, 2017, 04:45:59 AM »
My parents paid off their mortgage very aggressively, in the mid 90s/early 00s. It is something they're proud of, that they got it done in about half the term.

My dad has since come to learn about passive investing, building a diverse portfolio etc (he started me on this journey!) and understands that he would have been better off investing the money this way. 

He was originally put off the idea of prioritising investments over mortgage payments by some mixed success at stock picking, and some absolutely disastrous months spent day-trading (talk about mistakes ACyclist... you've got nothing!). I think he regrets those things far more than he regrets putting all available resources towards paying off the house, but he does wish he had the knowledge then that he does now and acknowledges that they'd be a lot better off financially if they'd gone that route. However they're more than comfortable so luckily it's not a pressing issue.

My mum would say she has no regrets – at the time they were self employed with periods of high income and periods of nothing, and she'd felt that they had taken on too high a mortgage to begin with.

BTDretire

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Re: Do you regret paying off your mortgage early?
« Reply #636 on: December 06, 2017, 05:17:48 AM »

No you don't.  Doing something wrong is how you learn to do it right.  I guarantee if you talk to 100 investors, you'll get 100 stories about mistakes.  Unless I'm one of the 100.  Then you'll get about 112 stories.

Very true at spent 17 years as a stick picker before finding this site. That's much worse than your minor purchase snafu.

 Here's a chance to reminisce about old times. :-)

boarder42

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Re: Do you regret paying off your mortgage early?
« Reply #637 on: December 06, 2017, 05:38:56 AM »
4th from the right would be my pick - let me know how it turns out in `10 years.
« Last Edit: December 06, 2017, 07:05:16 AM by boarder42 »
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nereo

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Re: Do you regret paying off your mortgage early?
« Reply #638 on: December 06, 2017, 06:44:58 AM »
4th from the left would be my pick - let me know how it turns out in `10 years.
WRONG!! 
The correct answer of course is that you buy bundles of sticks from a client-owned stick broker.
have you learned nothing??!!
"Do not confuse complexity with superiority"

boarder42

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Re: Do you regret paying off your mortgage early?
« Reply #639 on: December 06, 2017, 07:02:12 AM »
4th from the left would be my pick - let me know how it turns out in `10 years.
WRONG!! 
The correct answer of course is that you buy bundles of sticks from a client-owned stick broker.
have you learned nothing??!!

but the others look so much more mature and over grown.  My current analysis is showing that the market is undervalued for sticks with sharp pointy off shoots and do you see how it appears to be growing.  Its a sharpe redundancy point that if you've studied the stick market like i have you'd know this stick is way undervalued and going to outperform the other sticks over the next 10 years.  I'm quite confident it will regress to the mean.  and then we'll see who's laughing.

and sorry for anyone who acted on my first analysis i got left and right confused i meant 4th from the RIGHT.  if you hurry you can make the swap before the opening leaf drops at 830CST on the oak tree stick trading floor
« Last Edit: December 06, 2017, 07:06:39 AM by boarder42 »
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AdrianC

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Re: Do you regret paying off your mortgage early?
« Reply #640 on: December 06, 2017, 07:19:11 AM »
On topic, my wife and I have mixed feelings.  We enjoy the simplification of our lives (less hassle) but acknowledge we would have more assets if we had kept or refinanced the house.  We have a lot of equity not working for us, but it is also not material to our retirement.  We were never all that fully leveraged (20%+ down payment).  I admit to using less leverage because we didnt need to be leveraged to meet our retirement goals.  I have always been 'on plan' with or without leverage to help.  We are lucky to have income that exceeded our needs to more than meet our goals.  Perhaps that is a  factor in my decision.  Leverage was not needed to make our FI plan, but I understand that it might need to be for some more ambitious plans or lower income forum members.   For us it wasnt, so the decision wasnt a hugely passionate one for us.   I just eventually cut a check because I was tired of the loan (which at the time was small relative to our overall portfolio, less than 5%).  Why would i both be lending money via a percentage in bonds and borrowing money via a mortgage?  The marginal impact eventually wasnt enough to matter, though earlier in our career we benefited from the consistent commitment to stock investing for a long period.   We did have more to invest due to holding debt.

+1

This is us, too.

No regrets. We've reached our financial goals. No need or desire to bother with a mortgage, so we don't.

boarder42

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Re: Do you regret paying off your mortgage early?
« Reply #641 on: December 06, 2017, 07:24:24 AM »
On topic, my wife and I have mixed feelings.  We enjoy the simplification of our lives (less hassle) but acknowledge we would have more assets if we had kept or refinanced the house.  We have a lot of equity not working for us, but it is also not material to our retirement.  We were never all that fully leveraged (20%+ down payment).  I admit to using less leverage because we didnt need to be leveraged to meet our retirement goals.  I have always been 'on plan' with or without leverage to help.  We are lucky to have income that exceeded our needs to more than meet our goals.  Perhaps that is a  factor in my decision.  Leverage was not needed to make our FI plan, but I understand that it might need to be for some more ambitious plans or lower income forum members.   For us it wasnt, so the decision wasnt a hugely passionate one for us.   I just eventually cut a check because I was tired of the loan (which at the time was small relative to our overall portfolio, less than 5%).  Why would i both be lending money via a percentage in bonds and borrowing money via a mortgage?  The marginal impact eventually wasnt enough to matter, though earlier in our career we benefited from the consistent commitment to stock investing for a long period.   We did have more to invest due to holding debt.

+1

This is us, too.

No regrets. We've reached our financial goals. No need or desire to bother with a mortgage, so we don't.

so dont both of you think you should be promoting keeping a mortgage to all of the other peoples around here and that it would be a benefit to the community as a whole.  I mean once you've made FI what you do with your money isnt really helpful to those who are not and could greatly benefit from advice that you infact followed.  This is why in my mind regardless of the choice that people personally made and whether they regret it or not is detrimental to a FIRE community as a whole b/c it doesnt convey the real message that needs to be conveyed.  Similar to starting a thread about "who bought a tesla model S and do you regret it" - if your answer is i have more money than i know what to do with and I'm FIRE so i bought myself a toy - no regrets here - this shouldnt be a case to influence others who did

to modify your statement

No regrets. We've reached our financial goals. No need or desire to bother with a gas pump, so we don't.

The general human psyche will not vew these two statements the same thought.  since one is spending money and the other is "saving money in an inefficient way"
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SnackDog

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Re: Do you regret paying off your mortgage early?
« Reply #642 on: December 06, 2017, 09:36:42 AM »
I estimate the difference between my 15 year mortgage and a 30 year note would have netted me over $100,000 the last five years, assuming I put the difference in VTSAX.  So, yes, I regret paying my mortgage back faster even though I am doing so at a lower interest rate.  If I ever do pay it off, I will be very uncomfortable with all that capital sitting there doing next to nothing for me.  I will likely refinance or liquidate and rent.
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powersuitrecall

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Re: Do you regret paying off your mortgage early?
« Reply #643 on: December 06, 2017, 09:59:36 AM »
On topic, my wife and I have mixed feelings.  We enjoy the simplification of our lives (less hassle) but acknowledge we would have more assets if we had kept or refinanced the house.  We have a lot of equity not working for us, but it is also not material to our retirement.  We were never all that fully leveraged (20%+ down payment).  I admit to using less leverage because we didnt need to be leveraged to meet our retirement goals.  I have always been 'on plan' with or without leverage to help.  We are lucky to have income that exceeded our needs to more than meet our goals.  Perhaps that is a  factor in my decision.  Leverage was not needed to make our FI plan, but I understand that it might need to be for some more ambitious plans or lower income forum members.   For us it wasnt, so the decision wasnt a hugely passionate one for us.   I just eventually cut a check because I was tired of the loan (which at the time was small relative to our overall portfolio, less than 5%).  Why would i both be lending money via a percentage in bonds and borrowing money via a morgage?  The marginal impact eventually wasnt enough to matter, though earlier in our career we benefited from the consistent committment to stock investing for a long period.   We did have more to invest due to holding debt.

+1 PizzaSteve.  We feel the same way.

The decision to pay off our mortgage ASAP was made when we purchased our house and the 4 years that followed.  Our "pre-FIRE-awareness" years.  Both DW and I had great jobs and early retirement was not even a consideration.  Once we realized that our money would be better served in the market, it was too late - we had paid down 75% of our principal.  Since then, we have stretched out the remaining payments and invested everything else.  Our mortgage was paid in full this year.

So yes, I do have regrets about paying it off early, but I place it in the same bucket as other regrets from my "pre-FIRE awareness" years such as our lack of spending tracking, an expensive car purchase, and having high commission mutual funds through a FA.

The question is, do I regret it enough to line up at the bank today and take another mortgage on our paid-off house?  We are on track to semi FIRE within a year, and fully within 2.  In hindsight we would be months ahead if we hadn't paid it off, but I don't see a compelling reason to change our plan right now.

MrMoneySaver

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Re: Do you regret paying off your mortgage early?
« Reply #644 on: December 06, 2017, 01:36:22 PM »
It's worth noting that we're having this discussion amid a very long bull run in the market. In fact, the MMM site and much of the current early-retirement movement developed since 2008.

How would the discussion be different if the timing and conditions were different? What if this were 2009? We're all human (I assume) and the never-pay-off-the-mortgage argument is EXTREMELY easy to make in late 2017, as is the "invest 100% in stocks!" argument.

Tunes will change when the market is down 50 percent. The math won't change, but unless you're Dr. Spock or a droid, feelings about the math will.

And please don't tell me that the depths of a recession or crash would be the perfect time to have a huge mortgage and buy up a bunch of stocks. I know that -- it's been mentioned 4,387 times. The fact is you'll have a sinking feeling in your stomach, and if you haven't been through it yet, you can't be sure what you'll do.

JLee

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Re: Do you regret paying off your mortgage early?
« Reply #645 on: December 06, 2017, 02:21:00 PM »
It's worth noting that we're having this discussion amid a very long bull run in the market. In fact, the MMM site and much of the current early-retirement movement developed since 2008.

How would the discussion be different if the timing and conditions were different? What if this were 2009? We're all human (I assume) and the never-pay-off-the-mortgage argument is EXTREMELY easy to make in late 2017, as is the "invest 100% in stocks!" argument.

Tunes will change when the market is down 50 percent. The math won't change, but unless you're Dr. Spock or a droid, feelings about the math will.

And please don't tell me that the depths of a recession or crash would be the perfect time to have a huge mortgage and buy up a bunch of stocks. I know that -- it's been mentioned 4,387 times. The fact is you'll have a sinking feeling in your stomach, and if you haven't been through it yet, you can't be sure what you'll do.

If this was 2009, mortgage rates would be 5%+.  I'm not sure what the break-over number would be, but my mortgage is 3.75%.  If it was north of 5% I'd be far more interested in paying it down.

BlueHouse

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Re: Do you regret paying off your mortgage early?
« Reply #646 on: December 06, 2017, 03:03:04 PM »
Is there any possibility that the OP could change the title of the topic to "Do you regret paying off your mortgage early AND have you actually done the math to understand the possibility of other outcomes"?   

Because this thread is way too long with a few people assuming the rest of us don't understand math. 
Sometimes nothing can be a real cool hand

Scortius

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Re: Do you regret paying off your mortgage early?
« Reply #647 on: December 06, 2017, 03:23:10 PM »
It's worth noting that we're having this discussion amid a very long bull run in the market. In fact, the MMM site and much of the current early-retirement movement developed since 2008.

How would the discussion be different if the timing and conditions were different? What if this were 2009? We're all human (I assume) and the never-pay-off-the-mortgage argument is EXTREMELY easy to make in late 2017, as is the "invest 100% in stocks!" argument.

Tunes will change when the market is down 50 percent. The math won't change, but unless you're Dr. Spock or a droid, feelings about the math will.

And please don't tell me that the depths of a recession or crash would be the perfect time to have a huge mortgage and buy up a bunch of stocks. I know that -- it's been mentioned 4,387 times. The fact is you'll have a sinking feeling in your stomach, and if you haven't been through it yet, you can't be sure what you'll do.

Well, you answered your own question then.  You can't ask a question and then tell people not to give you the answer because you don't want to hear it.

MrMoneySaver

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Re: Do you regret paying off your mortgage early?
« Reply #648 on: December 06, 2017, 04:02:55 PM »
Quote
You can't ask a question and then tell people not to give you the answer because you don't want to hear it.

Those were rhetorical. I'll be sure to include a disclaimer next time.

boarder42

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Re: Do you regret paying off your mortgage early?
« Reply #649 on: December 06, 2017, 04:06:40 PM »
Is there any possibility that the OP could change the title of the topic to "Do you regret paying off your mortgage early AND have you actually done the math to understand the possibility of other outcomes"?   

Because this thread is way too long with a few people assuming the rest of us don't understand math.

Clearly you didn't read anything.
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