I have an annual average salary plus bonus of about 350k per year. ...I'm conservative when it comes to the stock market. Strike that - very conservative.
Payments on loan are $4223 per month (Principal and interest is $2782 of which 1,606 is interest) and taxes, insurance is $1441).
A follow-up question. Isn' there some frictional cost (tax) towards taking money out of Vanguard Wellington and then paying the mortgage.
Yes, but why wouldn't you be paying out of cash flow from your salary instead of withdrawing from investments?
If your investments are very conservative...how do their expected after-tax returns compare with your after-tax mortgage interest rate?
That's a fair point re: paying out of salary/bonus vs. withdrawing from investments. I guess I was organizing the investment return vs. mortgage payment in one neat but unnecessary "box" of trade-offs.
With re: to investments, I tend to make my investment income on property sales with some of these properties having rental income. This is all occurred between 2010 and 2020.
I guess now is as good a time as any to figure that out. Without accounting for rental monies and payments on the mortgages and down payments (which I realize is substantial):
First property: 2010-2020: Bought for 480k, sold for 740k (after broker's fee) = 110k profit over 10 years with initial downpayment of 20k and 150k invested. So it would seem I paid in 170k, and came out with 110k in profit over a 10 yr investment. Not sure about this calculation but 110/170 = 65%, but over 10 years. So one could argue I received 6.5% per year over 10 yrs on this RE investment (probably oversimplification).
Second Property - 2012 - Bought for 310k, Sold for 595k (after broker fee) in 2014, put down 30k, put in 15k in improvements, 285k/45k - 600% profit, so 300% profit every year over 2 years.
Third Property - 2011-2015, bought for 220k, Sold for 325k (after broker fee) in 2014, put down 30k, 10k in improvements, so 40k invested, 105k return - 105k/40k - 263% profit, over 4 years, 65% profit every year over 4 years.
All in all, over a 10 year period I invested 170K+45k+40k = 255k. Equity profit total =110+285k+105k = 500k.
It's about 200% divided by 10 years - 20% per year gains.
After doing this calculation, I always thought I made more in real estate (there were some great exits).
I guess even if I was half as successful as I was in the past with real estate, I'd do far better than 2.875%. (Acknowledging past performance is no guarantee of future returns). There were periods of time that I did not invest, whereas in the stock market it's more of a time in the market analysis.
I guess I somewhat believe that over the last 10 years "a rising tide lifts all ships". I guess for me though, I stuck with RE vs. stocks, so making the transition to stocks at this time is a bit harder for me.