Thanks Dave!

[DawnM]

I would love to agree with you, but after hearing story after story of huge LOSSES in the market, I just can't find 8% returns and 100% guarantees on anything. We have so many friends who literally have lost over 300,000 as their investments plummeted that I just can't be convinced that there is some secret out there I am missing.

If you truly know of a consistent and 100% guarantee of 8% per year from now until my mortgage is paid off, please share, otherwise I find the argument weak and I will continue to try to save the interest on my home.

Not to mention that the standard deduction for a family of 5 is quite high. So, if our standard deduction is say $12,000 per year, and my interest is $12,000 per year, really, it isn't much of a savings other than anything ABOVE that amount that I may have to itemize. I would be far better off paying my house off and taking the standard deduction.

Dawn

4.5% mortgage (with possible tax deductions) vs investing the cash in a market thats returns 8%... I realize Dave doesn't like to use math much, but hard to ignore.

 

[HHSTigerFan]

8% is the number Dave tosses out there when he wants to achieve his desired result, which is why I used it..

 

[DawnM]

You did not address the standard deduction issue at all.

That alone keeps me from thinking your method would work.

BTW: I have never given one dime to anything Dave Ramsey. Which I shouldn't have to even say, but you repeatedly tell people who listen to him that they are complete idiots who need a crutch.

Dawn

His 8% number is an average based on historical returns over a long term, which is not based on timing the market. So if you are putting in $100/week for 30 years some years you will get little for your $100 and some you will get a lot but in the end it averages out.

I have no use at all for Dave Ramsey but if paying someone money to tell you common sense things you should have learned before you made it out of grammar school is what works for you then go for it.

 

[DawnM]

I see. Well, you can no longer convince me that this will work, even long term. And besides, you did not address the standard deduction issue.

Dawn

8% is the number Dave tosses out there when he wants to achieve his desired result, which is why I used it..

 

[Purseval]

You did not address the standard deduction issue at all.

That alone keeps me from thinking your method would work.

The way you answer something then put a full quote in after your answer makes it very difficult to figure out who or what exactly you are trying to reply to. I answered your question on where he gets the 8% from. You know that because it's exactly what I quoted from you before I answered it. It's not a "method" at all.

BTW: I have never given one dime to anything Dave Ramsey. Which I shouldn't have to even say, but you repeatedly tell people who listen to him that they are complete idiots who need a crutch.

Dawn

Since you make it so hard for other people to figure out what you want I guess it's being consistent for you to not be able to figure out what other people are saying either, but if it's the second part of what you quoted from me that you are replying to, A: it was just a general comment not directed at anyone in particular, and B: I haven't "repeatedly" said anything besides one answer to one statement in this thread. If you know of anything different, especially where I'm calling people complete idiots who need a crutch, I'd like to see the quotes. They archive everything on this board so it should be easy enough for you to find.

 

[HHSTigerFan]

I see. Well, you can no longer convince me that this will work, even long term. And besides, you did not address the standard deduction issue.

Dawn

Nothing to address, if you don't lower your taxes because of the mortgage deduction, the difference is simply going to be ROI vs current mortgage rate..

 

[DawnM]

What are you talking about? I asked a question, plain and simple. It was not answered. I asked it AGAIN.

You are extremely rude.

You have repeatedly commented on how "if you need to pay someone to tell you common sense, then...."

Please, I don't need to quote you DIRECTLY, your tone is well understood.

Dawn

The way you answer something then put a full quote in after your answer makes it very difficult to figure out who or what exactly you are trying to reply to. I answered your question on where he gets the 8% from. You know that because it's exactly what I quoted from you before I answered it. It's not a "method" at all.


Since you make it so hard for other people to figure out what you want I guess it's being consistent for you to not be able to figure out what other people are saying either, but if it's the second part of what you quoted from me that you are replying to, A: it was just a general comment not directed at anyone in particular, and B: I haven't "repeatedly" said anything besides one answer to one statement in this thread. If you know of anything different, especially where I'm calling people complete idiots who need a crutch, I'd like to see the quotes. They archive everything on this board so it should be easy enough for you to find.

 

[DawnM]

True, but noone mentions this. People need to factor it in before starting to say how much they are "saving" by keeping interest on a mortgage.

The 5.5% vs. 8% means nothing if most or all of that 5.5% doesn't even get a tax deduction compared to not having a mortgage and getting the standard deduction.

Dawn

Nothing to address, if you don't lower your taxes because of the mortgage deduction, the difference is simply going to be ROI vs current mortgage rate..

 

[DawnM]

Here is your quote. It is condescending and rude.

Dawn

I have no use at all for Dave Ramsey but if paying someone money to tell you common sense things you should have learned before you made it out of grammar school is what works for you then go for it.

 

[HHSTigerFan]

The 5.5% vs. 8% means nothing if most or all of that 5.5% doesn't even get a tax deduction compared to not having a mortgage and getting the standard deduction.

Dawn

Means nothing?? If I have a $20K lump sum and torn between paying it towards the mortgage(4.5%) or investing it in a quality mutual fund (8%), over 20 years thats $40K more in your pocket if you invest it..

Not to mention the $25 you spent on a Ramsey book, $100 on his class and $20 on envelopes..

 

[DawnM]

Well, we are going to have to agree to disagree. My mutual funds are also not earning anywhere near 8%. We are with Fidelity.

Dawn

Means nothing?? If I have a $20K lump sum and torn between paying it towards the mortgage(4.5%) or investing it in a quality mutual fund (8%), over 20 years thats $40K more in your pocket if you invest it..

Not to mention the $25 you spent on a Ramsey book, $100 on his class and $20 on envelopes..

 

[Purseval]

You are extremely rude.

I only respond in kind.

You have repeatedly commented on how "if you need to pay someone to tell you common sense, then...."

There you go again. Is that what you got from me or is it what you think I'm thinking? If that's true you should be able to find all of those quotes I have repeatedly made. So post a few links or stop repeating your own silly comments.

Please, I don't need to quote you DIRECTLY, your tone is well understood.

Dawn

I'm not a dog, there is no need to figure out what I'm trying to get at from my "tone". What works around here are links and quotes, so have at it.

Here is your quote. It is condescending and rude.

That is your opinion, which you are entitled to. What you aren't entitled to is claim I'm going around from thread to thread putting people down. So again, let's see your links.

 

[DawnM]

I don't see at all where I was rude. My response was to you personally and your "if you need to pay people to learn things you should have learned in elem. school" comment. If you don't find that rude, then I guess we are at a stopping point.

I don't have time nor do I care to go back and find all your posts.

Dawn

I only respond in kind.

There you go again. Is that what you got from me or is it what you think I'm thinking? If that's true you should be able to find all of those quotes I have repeatedly made. So post a few links or stop repeating your own silly comments.


I'm not a dog, there is no need to figure out what I'm trying to get at from my "tone". What works around here are links and quotes, so have at it.

That is your opinion, which you are entitled to. What you aren't entitled to is claim I'm going around from thread to thread putting people down. So again, let's see your links.

 

[HHSTigerFan]

Well, we are going to have to agree to disagree. My mutual funds are also not earning anywhere near 8%. We are with Fidelity.

Dawn

Most quality funds have averaged over 10% annually over their life...

 

[Jeff_G]

For me its about eliminating risk, and since It will only be taking 2 years to get rid of the mortgage which will also save me about 100k of interest. And Remember again this is the last step AFTER you are investing in your 401k.

So at current interest rates does it make sense to borrow money from the bank to invest in a good mutual fund? How many of you are doing that right now?

 

[HHSTigerFan]

For me its about eliminating risk, and since It will only be taking 2 years to get rid of the mortgage which will also save me about 100k of interest. And Remember again this is the last step AFTER you are investing in your 401k.

So at current interest rates does it make sense to borrow money from the bank to invest in a good mutual fund? How many of you are doing that right now?

Don't care if it takes you 30 minutes to get rid of mortgage, same principals apply.. I also don't understand why it matters if you are doing it after you are investing in your 401K, at that point in time is it ok to throw away money?

Nobody is borrowing money to invest because banks aren't going to loan a person $300K at 4.5% for that purpose.. If they did, plenty of people would be doing this..

 

[HHSTigerFan]

which will also save me about 100k of interest.

And cost you perhaps $150K in investment gains......

 

[Abbeys_mom]

I have no use at all for Dave Ramsey but if paying someone money to tell you common sense things you should have learned before you made it out of grammar school is what works for you then go for it.

Well, that's a little harsh now isn't it, especially when the thread did not pertain to your beliefs? If you don't agree, move on. You are not going to convince any of us that do follow DR that we are wrong, and the name of the thread was for those of us who DO follow his plan (modified or not). Go thread crap somewhere else.

FTR, I just did my taxes. I could not care less about the interest deduction (not credit, just a deduction) that lowered my tax bill by a whopping $2500. Had I not paid OUT $10k in interest and INVESTED that instead, I would be in a much better place. So, the way the math works out for me, I am best to pay off the mortgage and THEN invest. BTW, his plan suggests you save 15% of your income and then work on paying off your mortgage. In that order, it does make sense.

Back to the original topic, we are about four months in. So far, we have been able to pay off two credit cards ($6k) using a bonus instead of blowing it as we would have preDR, had an emergency fund in place, which allowed us to cash flow taxes and DD's school deposit, and we are completely current on everything and prepared for annual expenses. We had the wake up call we needed, we are in a better place and we are not living above our wage. On the plan, we should have our house paid off in eight years, that we will then turn in to a rental property and buy our "forever" house with 20% down.

All that sage advice for the $10 iTunes book. Not a bad "investment"!

 

[Padstack]

Well, that's a little harsh now isn't it, especially when the thread did not pertain to your beliefs?

But then everyone wouldn't know how smart he is.

 

[Bob NC]

And others will show you how foolish it is to pay off your mortgage early...

To me, this kind of looked like a thread for folks proud of paying off their bills and getting a better handle on their finances.

Now, what possible reason do you have for posting here?