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  #1  
Old 07-10-2019, 04:59 PM
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How to make $500,000 per year and still struggle


https://www.marketwatch.com/story/th...ear-2019-07-09

it's sad that people can make so much income and still have trouble making ends meet :/
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Old 07-10-2019, 05:16 PM
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That's a pretty absurd budget, obviously. I lean towards the belief that it's fictional. Did I miss car payment(s) in his budget or are they really not there (but $500/month in car insurance). Seems unlikely to me that he'd have paid-off vehicles, given the rest of his lifestyle and choices.
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Old 07-10-2019, 05:19 PM
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Live like an idiot, suffer like one.
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Old 07-10-2019, 05:22 PM
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The article says that they have a ten-year mortgage and that's why the monthly payment is so high. Normally, I'd think it a good thing to be paying off the mortgage more quickly, but they're running a monthly deficit of almost $3,000, which they finance by increasing the mortgage amount. So I don't think it makes sense to pay down the mortgage that aggressively.
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Old 07-10-2019, 05:31 PM
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$2000 a month for clothes, $3000 a month for food!

Yikes! That’s a LOT of lifestyle! Hope they’re enjoying it!
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Old 07-10-2019, 05:33 PM
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$3000 a month for flights? Unless those are business expenses and should be reported before income and taxes, I can't see it. Too much vacation.
$2000 a month clothes?????
10,000 a month mortgage? That's a $1.4 million 15 year mortgage at 4%.

Last edited by OldGuy; 07-10-2019 at 05:34 PM.
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Old 07-10-2019, 05:37 PM
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How in the hell are these two going through $ 3000 in food every month? Do they order in from the French Laundry on date night or something? And the wife's a model, so her portions must be minuscule.
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Old 07-10-2019, 05:37 PM
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... 10,000 a month mortgage? That's a $1.4 million 15 year mortgage at 4%.
The article says it's actually a $1.3M 10-year mortgage. You could probably do the math to figure out the rate, but it doesn't really matter. They could solve all their problems by refinancing into a 30-year mortgage, or buying a $650,000 Kansas house instead of the $1.3M one.
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Old 07-10-2019, 06:33 PM
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This sounds like trolling/a joke. Some of the individual line items seem like they could be sincere ignorance, but putting them all together seems like a bit much.
  #10  
Old 07-10-2019, 07:05 PM
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$2000 a month for clothes, $3000 a month for food!
...reminds me of one of my favourite twitter jokes ever. The replies are gold.

Quote:
Originally Posted by @dril
Food $200
Data $150
Rent $800
Candles $3,600
Utility $150
someone who is good at the economy please help me budget this. my family is dying
https://twitter.com/dril/status/3844...417472?lang=en
  #11  
Old 07-10-2019, 07:32 PM
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$3000 a month for flights?
$36k per year. Fly back and forth to Europe a couple of times, once to Hawaii and you are already there for a family (assuming you fly at least business).

It cost me $12k to the fly the two of us to Aus/NZ earlier this year and that's a heavily discounted fare for business class.

Basically stuff is expensive.
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Old 07-10-2019, 07:41 PM
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$36k per year. Fly back and forth to Europe a couple of times, once to Hawaii and you are already there for a family (assuming you fly at least business).

It cost me $12k to the fly the two of us to Aus/NZ earlier this year and that's a heavily discounted fare for business class.

Basically stuff is expensive.
Maybe they could try NOT flying a couple of times to Europe every month?
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Old 07-10-2019, 08:12 PM
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I remember reading an article in Toronto Life about "going broke" on $150k - $200k per year. Here's a link:

https://torontolife.com/city/almost-rich/
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Old 07-10-2019, 08:27 PM
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I remember reading an article in Toronto Life about "going broke" on $150k - $200k per year. Here's a link:

https://torontolife.com/city/almost-rich/
$500 - $800 a month on wine??? Come on.
  #15  
Old 07-11-2019, 12:53 AM
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On the off chance this is real:

"As you can see, each year we have a large deficit."

No. They are investing $66,000 a year between the 401k and the monthly Vanguard contribution. I'm not saying that should be their first cut, but you do not have a "large deficit" when just the money you're choosing to sit on could finance an above-average household in Kansas.

Last edited by Lord Feldon; 07-11-2019 at 12:57 AM.
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Old 07-11-2019, 02:59 AM
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$36k per year. Fly back and forth to Europe a couple of times, once to Hawaii and you are already there for a family (assuming you fly at least business).

It cost me $12k to the fly the two of us to Aus/NZ earlier this year and that's a heavily discounted fare for business class.

Basically stuff is expensive.
Well, no. Luxury stuff is expensive, sure. Basic but still perfectly serviceable stuff is much cheaper. Coach arrives at the same time business class does, you're just a little less comfortable. A 30-year mortgage builds equity in the same house that a ten-year mortgage does, it just builds it more slowly.

If you can't afford luxury stuff, you don't buy luxury stuff.
  #17  
Old 07-11-2019, 05:05 AM
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Who the hell needs new clothes every month, let alone $2000 worth?

$400 for party supplies, seriously?

$1000 for charity is wonderful, but not if it's putting you in debt.

$3000 in flights, every damned month? What's that about? If it's a business expense why is it coming out of take home pay?

Eliminating just the $4000 Vanguard contribution would take their expenses below their take home pay. Are they really earning enough through their Vanguard account to make it worth adding to their mortgage?

I really have to wonder if this is real.
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Old 07-11-2019, 08:13 AM
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They could solve all their problems by refinancing into a 30-year mortgage, or buying a $650,000 Kansas house instead of the $1.3M one.
Pretty much. Just a cursory glance at the numbers indicate they are spending way too much on the mortgage. AFAIK, the rule of thumb is that your housing costs (rent or mortgage) shouldn't be more than 25% of your monthly income (20% is even better but not realistic for many). If they love the house so much that they don't want to give it up, lower the spending on other things.
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Old 07-11-2019, 08:18 AM
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I really have to wonder if this is real.
I don't for a second believe this is real.
  #20  
Old 07-11-2019, 09:28 AM
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Got to be a troll, anyone who claims to be a CTO should be smart enough to figure out the real problem rather than posting on the internet for help.

At my age, every purchase is expressed in terms of how many additional days/weeks/months this expense will push back retirement. Helps focus how much I really want non-essentials.
  #21  
Old 07-11-2019, 09:49 AM
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Originally Posted by Lord Feldon View Post
On the off chance this is real:

"As you can see, each year we have a large deficit."

No. They are investing $66,000 a year between the 401k and the monthly Vanguard contribution. I'm not saying that should be their first cut, but you do not have a "large deficit" when just the money you're choosing to sit on could finance an above-average household in Kansas.
And another $1000 a month to a college fund for kids they donít have yet.
  #22  
Old 07-11-2019, 10:04 AM
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$500 - $800 a month on wine??? Come on.
We have a bottle (or two if we have guests) at least 4 nights a week. 20 nights per month (not counting restaurant meals) I'd say the average price is $50. (range 20 to 70) That's $1,000 per month. I could be over on the average price, but probably under on number of bottles.
  #23  
Old 07-11-2019, 10:10 AM
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We have a bottle (or two if we have guests) at least 4 nights a week. 20 nights per month (not counting restaurant meals) I'd say the average price is $50. (range 20 to 70) That's $1,000 per month. I could be over on the average price, but probably under on number of bottles.
Damn, you must really like wine!
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Old 07-11-2019, 10:28 AM
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I don't for a second believe this is real.
I agree.

Quote:
Originally Posted by Procrustus View Post
We have a bottle (or two if we have guests) at least 4 nights a week. 20 nights per month (not counting restaurant meals) I'd say the average price is $50. (range 20 to 70) That's $1,000 per month. I could be over on the average price, but probably under on number of bottles.
As long as you can afford it, fantastic. Live like a king.

But I really hope debt is not helping to pay for a luxurious lifestyle.
  #25  
Old 07-11-2019, 10:31 AM
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I think my clothing costs might reach as high as $400 per decade. They do know that if you wash clothes, it's possible to wear the same clothes again, right?

Then again, people like this might be the reason why it's possible to buy brand-new nice clothes for a buck at the thrift shop.
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Old 07-11-2019, 10:39 AM
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I think my clothing costs might reach as high as $400 per decade. They do know that if you wash clothes, it's possible to wear the same clothes again, right?
Yea, I'm sure I don't own $2000 worth of clothes in total.

Last edited by Hermitian; 07-11-2019 at 10:40 AM.
  #27  
Old 07-11-2019, 10:45 AM
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As long as you can afford it, fantastic. Live like a king.

But I really hope debt is not helping to pay for a luxurious lifestyle.
Agree. If we were running a deficit, it would be an easy place to cut back.

(also, WTF bitcoins?)
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Old 07-11-2019, 11:35 AM
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...reminds me of one of my favourite twitter jokes ever. The replies are gold.
Quote:
Originally Posted by @dril
Food $200
Data $150
Rent $800
Candles $3,600
Utility $150
someone who is good at the economy please help me budget this. my family is dying
https://twitter.com/dril/status/3844...417472?lang=en
It took too long to get to the obvious answer, which is "spend less on food".

Regards,
Shodan
  #29  
Old 07-11-2019, 11:45 AM
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Agree. If we were running a deficit, it would be an easy place to cut back.

(also, WTF bitcoins?)
And there's a lot of leeway in wine; there are plenty of decent sub-$50 bottles out there to choose from, without having to go to Trader Joes.
  #30  
Old 07-11-2019, 12:09 PM
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It's rage clicking. Don't bother.
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Old 07-11-2019, 02:35 PM
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The clothes budget is totally reasonable. I'm sure the influencer wife just controls that hot Kansas fashion scene.
(Yeah, this has troll written all over it.)
  #32  
Old 07-11-2019, 03:10 PM
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$36k per year. Fly back and forth to Europe a couple of times, once to Hawaii and you are already there for a family (assuming you fly at least business).
why would any sane person with a reasonable grasp of finances assume "at least business"?

Quote:
It cost me $12k to the fly the two of us to Aus/NZ earlier this year and that's a heavily discounted fare for business class.
so............don't fly business?

Quote:
Basically stuff is expensive.
it is only as expensive as you choose it to be. The amount you paid for two flights is more than I'm paying for a family of four to go to Bangkok, New Zealand and Hong Kong, accommodation, car hire, food, activities and spending money included.
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  #33  
Old 07-11-2019, 03:13 PM
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We have a bottle (or two if we have guests) at least 4 nights a week. 20 nights per month (not counting restaurant meals) I'd say the average price is $50. (range 20 to 70) That's $1,000 per month. I could be over on the average price, but probably under on number of bottles.
And I'm sure you'd agree that if you were doing so whilst running a multi-thousand deficit each month, you'd be deserving of industrial levels of scorn.

ETA - as I see you've already freely admitted, no matter it was a rhetorical question anyway as at least you had an immediate grasp on what you spend and why, not a quality abundant in the (probably non-existent) OP couple.
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Last edited by Novelty Bobble; 07-11-2019 at 03:15 PM.
  #34  
Old 07-11-2019, 03:31 PM
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People always find a way to spend whatever income they earn.

There's a lifestyle for every income level. The baseline starts with your rent or mortgage payment. Do you drive a paid for beater or have a car payment? Credit card payments?

It is amazing that some people find themselves short of money earning 500k a year. That's ten times my income.

Last edited by aceplace57; 07-11-2019 at 03:32 PM.
  #35  
Old 07-11-2019, 05:40 PM
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It's MarketWatch. Perhaps the least credible place to find decent information. It's where you go only after you have read the entire internet and are somehow still bored and need something to read.

Last edited by Dag Otto; 07-11-2019 at 05:41 PM.
  #36  
Old 07-11-2019, 06:03 PM
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it is only as expensive as you choose it to be. The amount you paid for two flights is more than I'm paying for a family of four to go to Bangkok, New Zealand and Hong Kong, accommodation, car hire, food, activities and spending money included.
No kidding. My wife and I flew to Mumbai from Chicago and back a few years ago, and it was around $2K total. Looking online right now, you can do it for under $700 a person with Lufthansa. I mean, sure, if you've got the money and wanna chill, pay the $6K ticket each (though no matter how comfortable, I can't see myself paying that premium on business class), but there's no reason you have to pay $6K a person to get literally halfway around the world.

Last edited by pulykamell; 07-11-2019 at 06:04 PM.
  #37  
Old 07-11-2019, 08:45 PM
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Don't forget there's:
$18m/ year to 401(k)
$100/month to Bitcoin - an investment
$4m/month to Vanguard - another investment

He may be in hock now, but with saving/investing $67m/year they'll have a good retirement!
  #38  
Old 07-11-2019, 08:49 PM
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Don't forget there's:
$18m/ year to 401(k)
$100/month to Bitcoin - an investment
$4m/month to Vanguard - another investment

He may be in hock now, but with saving/investing $67m/year they'll have a good retirement!
I think the bitcoin is money down the drain. Time will tell
  #39  
Old 07-11-2019, 09:08 PM
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Median home price in Kansas is around $150k even in the large cities. If they're spending 10k a month on a mortgage its because they bought a million dollar home.

Also there is no way they spend $2640 a month in property taxes. Property taxes in Kansas are something like 1.5% a year. Even on a million dollar home it should be 15k a year, which is about 1200/month. If that figure is accurate, their home is worth 2 million.

Half their income is spent on housing, which is a choice they've made. They can easily buy a modest 3-4 bedroom home and pay it off in 2 years.

Plus as others have said, 3k on flights, 2k on clothes, 1k on a kid that doesn't exist, 1k on charity. Thats 7k right there.

They're spending about 13k/month on housing, plus another 7k on the four items just listed.

Anyway, its probably fake but still interesting to read.
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Last edited by Wesley Clark; 07-11-2019 at 09:11 PM.
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Old 07-11-2019, 09:25 PM
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why would any sane person with a reasonable grasp of finances assume "at least business"?

so............don't fly business?

it is only as expensive as you choose it to be. The amount you paid for two flights is more than I'm paying for a family of four to go to Bangkok, New Zealand and Hong Kong, accommodation, car hire, food, activities and spending money included.
Yeah I would never pay for anything above economy class because I hate flying in the first place. Paying more for doing it would make me hate it even more.

I do pay for nice hotels because I like to stay in nice places and the price difference between a cheap hotel and a nice hotel ($50 - $400) is bearable. YMMV
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Old 07-11-2019, 10:35 PM
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Not sure I get it that they are refinancing through the mortgage. What, are they taking out some kind of HELOC to have extra money to pay off their mortgage? I doubt the HELOC interest is lower than the 10 year mortgage, but there's a whole world of stuff I don't know out there, so who knows why they would do it that way?
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Old 07-12-2019, 03:42 AM
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It is amazing that some people find themselves short of money earning 500k a year. That's ten times my income.
It's twenty times my income right now and yet I have no debt and save some money every single month.

I'm pretty sure my frugal lifestyle would not be acceptable to many people - home too small, lack of fine wine most of the time, less than constant travel, vehicles too old - but I'm in the black.
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Old 07-12-2019, 08:38 AM
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Don't forget there's:
$18m/ year to 401(k)
$100/month to Bitcoin - an investment
$4m/month to Vanguard - another investment

He may be in hock now, but with saving/investing $67m/year they'll have a good retirement!
Is it common to use "m" to mean thousands where you are from? I don't think I have ever seen that.
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Old 07-12-2019, 08:42 AM
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The article says that they have a ten-year mortgage and that's why the monthly payment is so high. Normally, I'd think it a good thing to be paying off the mortgage more quickly, but they're running a monthly deficit of almost $3,000, which they finance by increasing the mortgage amount. So I don't think it makes sense to pay down the mortgage that aggressively.
My question is why are they even mortgaging in the first place? Unless they live in San Francisco or Boston, they should be paying cash for every property they purchase. They should have a home to live in and rental properties - shit they could afford to hire a property manager. Caught that mistake right there and didn't need to read the rest.
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Old 07-12-2019, 11:07 AM
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My question is why are they even mortgaging in the first place? Unless they live in San Francisco or Boston, they should be paying cash for every property they purchase.
I disagree. If you feel the market is going to give you better returns than your mortgage, go for the mortgage and invest the difference. But you have to be disciplined and use the difference in your investments. Depends on your risk tolerance and all that, but I always opt for a low-interest loan vs paying cash if the interest is low enough. (For example, four years ago, I had a 3-year car loan at 1.5%. I could easily have paid for the car in cash. Instead, I got the loan, and invested the rest. The market has done much better than 1.5%, so yay me. Thing is, in that case, with such a short investment horizon, that was a more risky play. But when we're talking on 20- or 30-year time spans, historically, your investment income will have made more money than what you paid out in the loan and interest And I'm not even taking into account mortgage interest deductions on your taxes.)

Last edited by pulykamell; 07-12-2019 at 11:08 AM.
  #46  
Old 07-12-2019, 11:25 AM
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The other thing is that the house they're in cost something like $1.3 million. So they'd either have to pay cash for a smaller house or save until they accumulate $1.3 million. A mortgage (that one can afford) is a reasonable decision. The problem with the hypothetical couple is the idea that each year, they're paying aggressively towards the mortgage and investing heavily while at the same time adding about $36,000 to the mortgage.
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Old 07-12-2019, 11:47 AM
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My question is why are they even mortgaging in the first place? Unless they live in San Francisco or Boston, they should be paying cash for every property they purchase. They should have a home to live in and rental properties - shit they could afford to hire a property manager. Caught that mistake right there and didn't need to read the rest.
That's assuming they can save the cash to do a lump sum. Considering their lack of short term planning, their long term is worse.
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Old 07-12-2019, 12:36 PM
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I don't for a second believe this is real.
Me either!
  #49  
Old 07-12-2019, 01:15 PM
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I disagree. If you feel the market is going to give you better returns than your mortgage, go for the mortgage and invest the difference. But you have to be disciplined and use the difference in your investments. Depends on your risk tolerance and all that, but I always opt for a low-interest loan vs paying cash if the interest is low enough. (For example, four years ago, I had a 3-year car loan at 1.5%. I could easily have paid for the car in cash. Instead, I got the loan, and invested the rest. The market has done much better than 1.5%, so yay me. Thing is, in that case, with such a short investment horizon, that was a more risky play. But when we're talking on 20- or 30-year time spans, historically, your investment income will have made more money than what you paid out in the loan and interest And I'm not even taking into account mortgage interest deductions on your taxes.)
I get what you're saying, and you're not wrong if you play your cards right - the math is definitely there, and I won't argue otherwise. I just don't like being leveraged to that degree, but that's admittedly an investment decision (approach) that factors the highly subjective nature of one's own personal comfort level, as opposed to pure investment/market math. IME, markets change, and they tend to change when we don't want them to.
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Old 07-12-2019, 01:32 PM
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It took too long to get to the obvious answer, which is "spend less on food".

Regards,
Shodan
From what I remember from economics class, candles basically pay for themselves.
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