Refi?
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Originally Posted By: 99Saturn
Originally Posted By: hatt
Have you pulled out the equity in your home to invest? If not, why not?
When we applied to refi I applied to do just that. Had the appraisal come back as needed I would have.
Sounds to me like I want to stay in debt so I can become rich at retirement to finally pay that mortgage!
Originally Posted By: hatt
Have you pulled out the equity in your home to invest? If not, why not?
When we applied to refi I applied to do just that. Had the appraisal come back as needed I would have.
Sounds to me like I want to stay in debt so I can become rich at retirement to finally pay that mortgage!
I've been all over the place with this in my personal situation. High down payments to assume lower interest loans, investment properties with 15 year payoffs, 30 year 100% VA loan, 10% down 30 year loan with stupid amounts of PMI costs, etc. All based upon my situation at the time, with the understanding I never want to be a renter for more than a minimal amount of time.
The best for me is simple. Enough down to have no PMI. Short enough period to have the lowest interest rate, which usually works out to 15 years. If you can't do the above, refi as soon as you can to make it happen. Pay off chunks of the mortgage whenever you come into any money such as inheritance, insurance settlements, etc.
Those of you that are true masters of your own life that can minimize your payment and always invest the rest, I salute you. For the rest of us who are married, I would recommend the above strategy.
BTW, I just retired. My spouse came into a small inheritance. Before it was all gone in a marathon of spending, we both kicked in and paid off the balance of our 15 year 3.125% HARP mortgage. Our expenses are so low now we are only putting out about 1/2 of my estimated budget for retirement. Having a couple of paid off rental properties (remember those 15 year mortgages I mentioned?) helps.
The best for me is simple. Enough down to have no PMI. Short enough period to have the lowest interest rate, which usually works out to 15 years. If you can't do the above, refi as soon as you can to make it happen. Pay off chunks of the mortgage whenever you come into any money such as inheritance, insurance settlements, etc.
Those of you that are true masters of your own life that can minimize your payment and always invest the rest, I salute you. For the rest of us who are married, I would recommend the above strategy.
BTW, I just retired. My spouse came into a small inheritance. Before it was all gone in a marathon of spending, we both kicked in and paid off the balance of our 15 year 3.125% HARP mortgage. Our expenses are so low now we are only putting out about 1/2 of my estimated budget for retirement. Having a couple of paid off rental properties (remember those 15 year mortgages I mentioned?) helps.
Originally Posted By: ArrestMeRedZ
I've been all over the place with this in my personal situation. High down payments to assume lower interest loans, investment properties with 15 year payoffs, 30 year 100% VA loan, 10% down 30 year loan with stupid amounts of PMI costs, etc. All based upon my situation at the time, with the understanding I never want to be a renter for more than a minimal amount of time.
The best for me is simple. Enough down to have no PMI. Short enough period to have the lowest interest rate, which usually works out to 15 years. If you can't do the above, refi as soon as you can to make it happen. Pay off chunks of the mortgage whenever you come into any money such as inheritance, insurance settlements, etc.
Those of you that are true masters of your own life that can minimize your payment and always invest the rest, I salute you. For the rest of us who are married, I would recommend the above strategy.
BTW, I just retired. My spouse came into a small inheritance. Before it was all gone in a marathon of spending, we both kicked in and paid off the balance of our 15 year 3.125% HARP mortgage. Our expenses are so low now we are only putting out about 1/2 of my estimated budget for retirement. Having a couple of paid off rental properties (remember those 15 year mortgages I mentioned?) helps.
Renters have one major benefit: mobility.
I've been all over the place with this in my personal situation. High down payments to assume lower interest loans, investment properties with 15 year payoffs, 30 year 100% VA loan, 10% down 30 year loan with stupid amounts of PMI costs, etc. All based upon my situation at the time, with the understanding I never want to be a renter for more than a minimal amount of time.
The best for me is simple. Enough down to have no PMI. Short enough period to have the lowest interest rate, which usually works out to 15 years. If you can't do the above, refi as soon as you can to make it happen. Pay off chunks of the mortgage whenever you come into any money such as inheritance, insurance settlements, etc.
Those of you that are true masters of your own life that can minimize your payment and always invest the rest, I salute you. For the rest of us who are married, I would recommend the above strategy.
BTW, I just retired. My spouse came into a small inheritance. Before it was all gone in a marathon of spending, we both kicked in and paid off the balance of our 15 year 3.125% HARP mortgage. Our expenses are so low now we are only putting out about 1/2 of my estimated budget for retirement. Having a couple of paid off rental properties (remember those 15 year mortgages I mentioned?) helps.
Renters have one major benefit: mobility.
Originally Posted By: SVTCobra
[
Sounds to me like I want to stay in debt so I can become rich at retirement to finally pay that mortgage!
To some degree, yes. IF you are borrowing the money for the mortgage cheaply I.E at a low interest rate AND you didn't borrow too much( I.E. buy less house than you qualify ( i'd recommend being able to afford it on one income). You invest your spare money for a return greater than the interest of the mortage.
My home will be paid off in 2 months, i have driven older vehicles in order to maintain investing in retirement accounts. I will now max out my pretax contributions and i will start up a small side business.
[
Sounds to me like I want to stay in debt so I can become rich at retirement to finally pay that mortgage!
To some degree, yes. IF you are borrowing the money for the mortgage cheaply I.E at a low interest rate AND you didn't borrow too much( I.E. buy less house than you qualify ( i'd recommend being able to afford it on one income). You invest your spare money for a return greater than the interest of the mortage.
My home will be paid off in 2 months, i have driven older vehicles in order to maintain investing in retirement accounts. I will now max out my pretax contributions and i will start up a small side business.
Last edited:
Originally Posted By: firemachine69
Originally Posted By: ArrestMeRedZ
I've been all over the place with this in my personal situation. High down payments to assume lower interest loans, investment properties with 15 year payoffs, 30 year 100% VA loan, 10% down 30 year loan with stupid amounts of PMI costs, etc. All based upon my situation at the time, with the understanding I never want to be a renter for more than a minimal amount of time.
The best for me is simple. Enough down to have no PMI. Short enough period to have the lowest interest rate, which usually works out to 15 years. If you can't do the above, refi as soon as you can to make it happen. Pay off chunks of the mortgage whenever you come into any money such as inheritance, insurance settlements, etc.
Those of you that are true masters of your own life that can minimize your payment and always invest the rest, I salute you. For the rest of us who are married, I would recommend the above strategy.
BTW, I just retired. My spouse came into a small inheritance. Before it was all gone in a marathon of spending, we both kicked in and paid off the balance of our 15 year 3.125% HARP mortgage. Our expenses are so low now we are only putting out about 1/2 of my estimated budget for retirement. Having a couple of paid off rental properties (remember those 15 year mortgages I mentioned?) helps.
Renters have one major benefit: mobility.
The only homeowners who don't have mobility are the ones with little to no equity in their home. People with paid off homes have all sort of options.
Originally Posted By: ArrestMeRedZ
I've been all over the place with this in my personal situation. High down payments to assume lower interest loans, investment properties with 15 year payoffs, 30 year 100% VA loan, 10% down 30 year loan with stupid amounts of PMI costs, etc. All based upon my situation at the time, with the understanding I never want to be a renter for more than a minimal amount of time.
The best for me is simple. Enough down to have no PMI. Short enough period to have the lowest interest rate, which usually works out to 15 years. If you can't do the above, refi as soon as you can to make it happen. Pay off chunks of the mortgage whenever you come into any money such as inheritance, insurance settlements, etc.
Those of you that are true masters of your own life that can minimize your payment and always invest the rest, I salute you. For the rest of us who are married, I would recommend the above strategy.
BTW, I just retired. My spouse came into a small inheritance. Before it was all gone in a marathon of spending, we both kicked in and paid off the balance of our 15 year 3.125% HARP mortgage. Our expenses are so low now we are only putting out about 1/2 of my estimated budget for retirement. Having a couple of paid off rental properties (remember those 15 year mortgages I mentioned?) helps.
Renters have one major benefit: mobility.
The only homeowners who don't have mobility are the ones with little to no equity in their home. People with paid off homes have all sort of options.
Originally Posted By: SVTCobra
Originally Posted By: 99Saturn
Originally Posted By: hatt
Have you pulled out the equity in your home to invest? If not, why not?
When we applied to refi I applied to do just that. Had the appraisal come back as needed I would have.
Sounds to me like I want to stay in debt so I can become rich at retirement to finally pay that mortgage!
Assuming your investments are rocking when you want to retire and not down 50%+. In that case you probably owe $400K on a house you bought for $150K and could have had paid off 20 years ago, so you'll have to keep working until the market recovers, if it recovers. But hey, stock market FTW.
Originally Posted By: 99Saturn
Originally Posted By: hatt
Have you pulled out the equity in your home to invest? If not, why not?
When we applied to refi I applied to do just that. Had the appraisal come back as needed I would have.
Sounds to me like I want to stay in debt so I can become rich at retirement to finally pay that mortgage!
Assuming your investments are rocking when you want to retire and not down 50%+. In that case you probably owe $400K on a house you bought for $150K and could have had paid off 20 years ago, so you'll have to keep working until the market recovers, if it recovers. But hey, stock market FTW.
Originally Posted By: hatt
Originally Posted By: SVTCobra
Originally Posted By: 99Saturn
Originally Posted By: hatt
Have you pulled out the equity in your home to invest? If not, why not?
When we applied to refi I applied to do just that. Had the appraisal come back as needed I would have.
Sounds to me like I want to stay in debt so I can become rich at retirement to finally pay that mortgage!
Assuming your investments are rocking when you want to retire and not down 50%+. In that case you probably owe $400K on a house you bought for $150K and could have had paid off 20 years ago, so you'll have to keep working until the market recovers, if it recovers. But hey, stock market FTW.
Down 50% from when? If you could have had this $150K house paid off 20 years ago, I'm assuming you've been invested for at least 20 years based on the above. When was the last time you could have been indexed in the S&P and been down 50% after 20 years?
Originally Posted By: SVTCobra
Originally Posted By: 99Saturn
Originally Posted By: hatt
Have you pulled out the equity in your home to invest? If not, why not?
When we applied to refi I applied to do just that. Had the appraisal come back as needed I would have.
Sounds to me like I want to stay in debt so I can become rich at retirement to finally pay that mortgage!
Assuming your investments are rocking when you want to retire and not down 50%+. In that case you probably owe $400K on a house you bought for $150K and could have had paid off 20 years ago, so you'll have to keep working until the market recovers, if it recovers. But hey, stock market FTW.
Down 50% from when? If you could have had this $150K house paid off 20 years ago, I'm assuming you've been invested for at least 20 years based on the above. When was the last time you could have been indexed in the S&P and been down 50% after 20 years?
Over the long term the returns aren't what you guys think. You're focusing on current conditions and think that's what will always happen.
Quote:
There are several common myths about stock market returns.
Some believe an investor can expect an annual rate of return of 10%. Some say it is 12% and others are as high as 15%.
Unfortunately for many investors, they have banked on these myths, investing for their retirements based on getting returns of 10% to 15% annually.
If an advisor were to tell an investor that those expectations might be unrealistic, the investor would go to a different advisor that will tell him what he wants to hear.
At Cornerstone we do not shy away from reality.
The facts are that the average annual rate of return for the S&P 500 since 1871 has been about 5.63% to 5.85% annually.
http://www.businessinsider.com/the-charts-wall-street-doesnt-want-you-to-see-2011-10
Quote:
There are several common myths about stock market returns.
Some believe an investor can expect an annual rate of return of 10%. Some say it is 12% and others are as high as 15%.
Unfortunately for many investors, they have banked on these myths, investing for their retirements based on getting returns of 10% to 15% annually.
If an advisor were to tell an investor that those expectations might be unrealistic, the investor would go to a different advisor that will tell him what he wants to hear.
At Cornerstone we do not shy away from reality.
The facts are that the average annual rate of return for the S&P 500 since 1871 has been about 5.63% to 5.85% annually.
http://www.businessinsider.com/the-charts-wall-street-doesnt-want-you-to-see-2011-10
I'm doing a refi, from 3.25 to 2.75. 30 year fixed each. VA loan. Does the mortgage company charge for doing these loans? They are charging me 3,9XX for "buying down" the apr. Is there a company that does it for free? Probably not. First time I ever refinance. Thanks
Originally Posted By: hatt
Over the long term the returns aren't what you guys think. You're focusing on current conditions and think that's what will always happen.
Quote:
There are several common myths about stock market returns.
Some believe an investor can expect an annual rate of return of 10%. Some say it is 12% and others are as high as 15%.
Unfortunately for many investors, they have banked on these myths, investing for their retirements based on getting returns of 10% to 15% annually.
If an advisor were to tell an investor that those expectations might be unrealistic, the investor would go to a different advisor that will tell him what he wants to hear.
At Cornerstone we do not shy away from reality.
The facts are that the average annual rate of return for the S&P 500 since 1871 has been about 5.63% to 5.85% annually.
http://www.businessinsider.com/the-charts-wall-street-doesnt-want-you-to-see-2011-10
Was going to say, it's something like 6%. I'm not that savy about investing, but even I knew that.
All I know is, when the market goes negative, it often is followed by double digit growth, leading to... 6% overall growth in one's investments, assuming appropriate diversification. Well, apparently 5.6 to 5.8%.
I'm still on the fence as to aggressively paying off my mortgage vs aggressively investing in my retirement. Would rather do both, but that's not an option, so I'll probably spit the difference.
Over the long term the returns aren't what you guys think. You're focusing on current conditions and think that's what will always happen.
Quote:
There are several common myths about stock market returns.
Some believe an investor can expect an annual rate of return of 10%. Some say it is 12% and others are as high as 15%.
Unfortunately for many investors, they have banked on these myths, investing for their retirements based on getting returns of 10% to 15% annually.
If an advisor were to tell an investor that those expectations might be unrealistic, the investor would go to a different advisor that will tell him what he wants to hear.
At Cornerstone we do not shy away from reality.
The facts are that the average annual rate of return for the S&P 500 since 1871 has been about 5.63% to 5.85% annually.
http://www.businessinsider.com/the-charts-wall-street-doesnt-want-you-to-see-2011-10
Was going to say, it's something like 6%. I'm not that savy about investing, but even I knew that.
All I know is, when the market goes negative, it often is followed by double digit growth, leading to... 6% overall growth in one's investments, assuming appropriate diversification. Well, apparently 5.6 to 5.8%.
I'm still on the fence as to aggressively paying off my mortgage vs aggressively investing in my retirement. Would rather do both, but that's not an option, so I'll probably spit the difference.
Originally Posted By: daves66nova
I'm doing a refi, from 3.25 to 2.75. 30 year fixed each. VA loan. Does the mortgage company charge for doing these loans? They are charging me 3,9XX for "buying down" the apr. Is there a company that does it for free? Probably not. First time I ever refinance. Thanks
Have you made some Excel sheets showing total money paid? Do you save $3,900 over 30 years by changing from 3.25% down to 2.75%?
I'd make a sheet for each scenario. 30 year at 3.25%, 30 year at 2.75%, and every iteration you can come up with. You can then compare the cost of going with one vendor over another. Should not hurt to look at local banks either, maybe they have a better loan (or not). 3.25% doesn't seem that great, I thought all loans were under 3% right now; but maybe I'm confusing that with 15 year loans.
The bank that has my mortgage has their rates online, along with closing costs. Pretty trivial to look around I think, or maybe even go in and ask.
I'm doing a refi, from 3.25 to 2.75. 30 year fixed each. VA loan. Does the mortgage company charge for doing these loans? They are charging me 3,9XX for "buying down" the apr. Is there a company that does it for free? Probably not. First time I ever refinance. Thanks
Have you made some Excel sheets showing total money paid? Do you save $3,900 over 30 years by changing from 3.25% down to 2.75%?
I'd make a sheet for each scenario. 30 year at 3.25%, 30 year at 2.75%, and every iteration you can come up with. You can then compare the cost of going with one vendor over another. Should not hurt to look at local banks either, maybe they have a better loan (or not). 3.25% doesn't seem that great, I thought all loans were under 3% right now; but maybe I'm confusing that with 15 year loans.
The bank that has my mortgage has their rates online, along with closing costs. Pretty trivial to look around I think, or maybe even go in and ask.
Originally Posted By: hatt
Over the long term the returns aren't what you guys think. You're focusing on current conditions and think that's what will always happen.
Quote:
There are several common myths about stock market returns.
Some believe an investor can expect an annual rate of return of 10%. Some say it is 12% and others are as high as 15%.
Unfortunately for many investors, they have banked on these myths, investing for their retirements based on getting returns of 10% to 15% annually.
If an advisor were to tell an investor that those expectations might be unrealistic, the investor would go to a different advisor that will tell him what he wants to hear.
At Cornerstone we do not shy away from reality.
The facts are that the average annual rate of return for the S&P 500 since 1871 has been about 5.63% to 5.85% annually.
http://www.businessinsider.com/the-charts-wall-street-doesnt-want-you-to-see-2011-10
Originally Posted By: 99Saturn
Originally Posted By: hatt
Assuming your investments are rocking when you want to retire and not down 50%+. In that case you probably owe $400K on a house you bought for $150K and could have had paid off 20 years ago, so you'll have to keep working until the market recovers, if it recovers. But hey, stock market FTW.
Down 50% from when? If you could have had this $150K house paid off 20 years ago, I'm assuming you've been invested for at least 20 years based on the above. When was the last time you could have been indexed in the S&P and been down 50% after 20 years?
So the last time the S&P was down 50+% after 20 years was...?
I didn't see anyone in this thread touting 10%-15% annual returns as the article indicates. The commentary has been around rates being low (3%-4%) and returns in the long term. (I specifically recall asking when the S&P's 30 year return was less than 4%).
As a point of reference, here is the dataset for the Annual ROI in the S&P 500 that dates back to 1928:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
As well as the calculated geometric mean for 10, 20, 30, 40 and 50 year returns.
Over the long term the returns aren't what you guys think. You're focusing on current conditions and think that's what will always happen.
Quote:
There are several common myths about stock market returns.
Some believe an investor can expect an annual rate of return of 10%. Some say it is 12% and others are as high as 15%.
Unfortunately for many investors, they have banked on these myths, investing for their retirements based on getting returns of 10% to 15% annually.
If an advisor were to tell an investor that those expectations might be unrealistic, the investor would go to a different advisor that will tell him what he wants to hear.
At Cornerstone we do not shy away from reality.
The facts are that the average annual rate of return for the S&P 500 since 1871 has been about 5.63% to 5.85% annually.
http://www.businessinsider.com/the-charts-wall-street-doesnt-want-you-to-see-2011-10
Originally Posted By: 99Saturn
Originally Posted By: hatt
Assuming your investments are rocking when you want to retire and not down 50%+. In that case you probably owe $400K on a house you bought for $150K and could have had paid off 20 years ago, so you'll have to keep working until the market recovers, if it recovers. But hey, stock market FTW.
Down 50% from when? If you could have had this $150K house paid off 20 years ago, I'm assuming you've been invested for at least 20 years based on the above. When was the last time you could have been indexed in the S&P and been down 50% after 20 years?
So the last time the S&P was down 50+% after 20 years was...?
I didn't see anyone in this thread touting 10%-15% annual returns as the article indicates. The commentary has been around rates being low (3%-4%) and returns in the long term. (I specifically recall asking when the S&P's 30 year return was less than 4%).
As a point of reference, here is the dataset for the Annual ROI in the S&P 500 that dates back to 1928:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
As well as the calculated geometric mean for 10, 20, 30, 40 and 50 year returns.
Originally Posted By: supton
Originally Posted By: daves66nova
I'm doing a refi, from 3.25 to 2.75. 30 year fixed each. VA loan. Does the mortgage company charge for doing these loans? They are charging me 3,9XX for "buying down" the apr. Is there a company that does it for free? Probably not. First time I ever refinance. Thanks
Have you made some Excel sheets showing total money paid? Do you save $3,900 over 30 years by changing from 3.25% down to 2.75%?
I'd make a sheet for each scenario. 30 year at 3.25%, 30 year at 2.75%, and every iteration you can come up with. You can then compare the cost of going with one vendor over another. Should not hurt to look at local banks either, maybe they have a better loan (or not). 3.25% doesn't seem that great, I thought all loans were under 3% right now; but maybe I'm confusing that with 15 year loans.
The bank that has my mortgage has their rates online, along with closing costs. Pretty trivial to look around I think, or maybe even go in and ask.
Good advice above - don't forget to factor in if you plan to pay off the mortgage early or move (since you are paying points up front to pay down the rate, you're effectively paying a portion of the interest up front to have a lower rate for the full term). Although if you plan to move, I believe VA mortgages are assumable so that could be a selling point (no idea what that involves though).
Originally Posted By: daves66nova
I'm doing a refi, from 3.25 to 2.75. 30 year fixed each. VA loan. Does the mortgage company charge for doing these loans? They are charging me 3,9XX for "buying down" the apr. Is there a company that does it for free? Probably not. First time I ever refinance. Thanks
Have you made some Excel sheets showing total money paid? Do you save $3,900 over 30 years by changing from 3.25% down to 2.75%?
I'd make a sheet for each scenario. 30 year at 3.25%, 30 year at 2.75%, and every iteration you can come up with. You can then compare the cost of going with one vendor over another. Should not hurt to look at local banks either, maybe they have a better loan (or not). 3.25% doesn't seem that great, I thought all loans were under 3% right now; but maybe I'm confusing that with 15 year loans.
The bank that has my mortgage has their rates online, along with closing costs. Pretty trivial to look around I think, or maybe even go in and ask.
Good advice above - don't forget to factor in if you plan to pay off the mortgage early or move (since you are paying points up front to pay down the rate, you're effectively paying a portion of the interest up front to have a lower rate for the full term). Although if you plan to move, I believe VA mortgages are assumable so that could be a selling point (no idea what that involves though).
Originally Posted By: bmwpowere36m3
Renting it always a losing proposition... what usually keeps people from buying is CASH or down payment. However not everyone wants to own a home. While renting is paying for the convenience of being able to move at any time and no maintenance.
I sold my house and would be stupid to ever buy another. I am in a nice apartment for not much more than I was paying just in property taxes. I also have nearly halved my utility bills, and no longer have to deal with the unpaid part-time job that is maintaining a house. Never again will I hang that millstone around my neck!
Renting it always a losing proposition... what usually keeps people from buying is CASH or down payment. However not everyone wants to own a home. While renting is paying for the convenience of being able to move at any time and no maintenance.
I sold my house and would be stupid to ever buy another. I am in a nice apartment for not much more than I was paying just in property taxes. I also have nearly halved my utility bills, and no longer have to deal with the unpaid part-time job that is maintaining a house. Never again will I hang that millstone around my neck!
30 yr >3% where?
Originally Posted By: bmwpowere36m3
30 yr >3% where?
Got curious, looked up my local bank, as I haven't looked in a while. Apparently it is higher than I last looked: 2.99% 10yr, 2.625% 15yr, 3.125% 20yr, and 3.375% 30yr. My bad, I should look more often.
Closing cost for refi is $1,920 for 10, 15, 20 and 30 year; but closing cost on a refi with cashout is $2,835 for 20&30 year, $2,585 for 15yr and $1,960 for 10yr.
30 yr >3% where?
Got curious, looked up my local bank, as I haven't looked in a while. Apparently it is higher than I last looked: 2.99% 10yr, 2.625% 15yr, 3.125% 20yr, and 3.375% 30yr. My bad, I should look more often.
Closing cost for refi is $1,920 for 10, 15, 20 and 30 year; but closing cost on a refi with cashout is $2,835 for 20&30 year, $2,585 for 15yr and $1,960 for 10yr.
Originally Posted By: Jarlaxle
Originally Posted By: bmwpowere36m3
Renting it always a losing proposition... what usually keeps people from buying is CASH or down payment. However not everyone wants to own a home. While renting is paying for the convenience of being able to move at any time and no maintenance.
I sold my house and would be stupid to ever buy another. I am in a nice apartment for not much more than I was paying just in property taxes. I also have nearly halved my utility bills, and no longer have to deal with the unpaid part-time job that is maintaining a house. Never again will I hang that millstone around my neck!
Just wondering how much do you pay for rent monthly ?
In some areas of the country... insurance, taxes and mortgage are impossible to pay on an average income.
Originally Posted By: bmwpowere36m3
Renting it always a losing proposition... what usually keeps people from buying is CASH or down payment. However not everyone wants to own a home. While renting is paying for the convenience of being able to move at any time and no maintenance.
I sold my house and would be stupid to ever buy another. I am in a nice apartment for not much more than I was paying just in property taxes. I also have nearly halved my utility bills, and no longer have to deal with the unpaid part-time job that is maintaining a house. Never again will I hang that millstone around my neck!
Just wondering how much do you pay for rent monthly ?
In some areas of the country... insurance, taxes and mortgage are impossible to pay on an average income.
Originally Posted By: 99Saturn
Originally Posted By: hatt
Over the long term the returns aren't what you guys think. You're focusing on current conditions and think that's what will always happen.
Quote:
There are several common myths about stock market returns.
Some believe an investor can expect an annual rate of return of 10%. Some say it is 12% and others are as high as 15%.
Unfortunately for many investors, they have banked on these myths, investing for their retirements based on getting returns of 10% to 15% annually.
If an advisor were to tell an investor that those expectations might be unrealistic, the investor would go to a different advisor that will tell him what he wants to hear.
At Cornerstone we do not shy away from reality.
The facts are that the average annual rate of return for the S&P 500 since 1871 has been about 5.63% to 5.85% annually.
http://www.businessinsider.com/the-charts-wall-street-doesnt-want-you-to-see-2011-10
Originally Posted By: 99Saturn
Originally Posted By: hatt
Assuming your investments are rocking when you want to retire and not down 50%+. In that case you probably owe $400K on a house you bought for $150K and could have had paid off 20 years ago, so you'll have to keep working until the market recovers, if it recovers. But hey, stock market FTW.
Down 50% from when? If you could have had this $150K house paid off 20 years ago, I'm assuming you've been invested for at least 20 years based on the above. When was the last time you could have been indexed in the S&P and been down 50% after 20 years?
So the last time the S&P was down 50+% after 20 years was...?
I didn't see anyone in this thread touting 10%-15% annual returns as the article indicates. The commentary has been around rates being low (3%-4%) and returns in the long term. (I specifically recall asking when the S&P's 30 year return was less than 4%).
As a point of reference, here is the dataset for the Annual ROI in the S&P 500 that dates back to 1928:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
As well as the calculated geometric mean for 10, 20, 30, 40 and 50 year returns.
No one is touting the actual long term returns. The market gamble doesn't look nearly as good. The bottom line is anyone who formulates a sensible strategy and sticks with it for 50 years is likely going to be doing pretty good. My strategy is to be totally debt free in a few years. Then I have more money to dump into whatever. I see no reason to put extra money(wife already puts in whatever her employer matches) into the stock market right now if I can pay off debts I already have. The market is likely on it's way down. When it goes down. Then dump money into it at a discount.
Originally Posted By: hatt
Over the long term the returns aren't what you guys think. You're focusing on current conditions and think that's what will always happen.
Quote:
There are several common myths about stock market returns.
Some believe an investor can expect an annual rate of return of 10%. Some say it is 12% and others are as high as 15%.
Unfortunately for many investors, they have banked on these myths, investing for their retirements based on getting returns of 10% to 15% annually.
If an advisor were to tell an investor that those expectations might be unrealistic, the investor would go to a different advisor that will tell him what he wants to hear.
At Cornerstone we do not shy away from reality.
The facts are that the average annual rate of return for the S&P 500 since 1871 has been about 5.63% to 5.85% annually.
http://www.businessinsider.com/the-charts-wall-street-doesnt-want-you-to-see-2011-10
Originally Posted By: 99Saturn
Originally Posted By: hatt
Assuming your investments are rocking when you want to retire and not down 50%+. In that case you probably owe $400K on a house you bought for $150K and could have had paid off 20 years ago, so you'll have to keep working until the market recovers, if it recovers. But hey, stock market FTW.
Down 50% from when? If you could have had this $150K house paid off 20 years ago, I'm assuming you've been invested for at least 20 years based on the above. When was the last time you could have been indexed in the S&P and been down 50% after 20 years?
So the last time the S&P was down 50+% after 20 years was...?
I didn't see anyone in this thread touting 10%-15% annual returns as the article indicates. The commentary has been around rates being low (3%-4%) and returns in the long term. (I specifically recall asking when the S&P's 30 year return was less than 4%).
As a point of reference, here is the dataset for the Annual ROI in the S&P 500 that dates back to 1928:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
As well as the calculated geometric mean for 10, 20, 30, 40 and 50 year returns.
No one is touting the actual long term returns. The market gamble doesn't look nearly as good. The bottom line is anyone who formulates a sensible strategy and sticks with it for 50 years is likely going to be doing pretty good. My strategy is to be totally debt free in a few years. Then I have more money to dump into whatever. I see no reason to put extra money(wife already puts in whatever her employer matches) into the stock market right now if I can pay off debts I already have. The market is likely on it's way down. When it goes down. Then dump money into it at a discount.
Originally Posted By: hatt
No one is touting the actual long term returns.
I posted the S&P returns over a variety of time frames above. My questions have been around claims of returns over 20 or 30 years, since claims are being made about returns over 20 and 30 years, such as your claim above about an investment being down 50+%.
Comments throughout this discussion have been about paying off a mortgage versus investing that money, and have called out specific time frames. Where are the comments claiming 10% or 15% return in a short window?
Originally Posted By: hatt
The market is likely on it's way down. When it goes down. Then dump money into it at a discount.
Sounds like you have the inside scoop about how to time the market - which is one of the basic traps to stay away from when investing.
Why investors shouldn't try to time the market
No one is touting the actual long term returns.
I posted the S&P returns over a variety of time frames above. My questions have been around claims of returns over 20 or 30 years, since claims are being made about returns over 20 and 30 years, such as your claim above about an investment being down 50+%.
Comments throughout this discussion have been about paying off a mortgage versus investing that money, and have called out specific time frames. Where are the comments claiming 10% or 15% return in a short window?
Originally Posted By: hatt
The market is likely on it's way down. When it goes down. Then dump money into it at a discount.
Sounds like you have the inside scoop about how to time the market - which is one of the basic traps to stay away from when investing.
Why investors shouldn't try to time the market
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