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Rep Retirement Lodge 198 - A New Season Begins...

Rep Retirement Lodge 198 - A New Season Begins...

  • Hockey

    Votes: 12 63.2%

  • Bacon

    Votes: 7 36.8%

  • Giada

    Votes: 8 42.1%

  • Freddy

    Votes: 5 26.3%

  • Other

    Votes: 10 52.6%
  • Total voters
    19
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Re: Rep Retirement Lodge 198 - A New Season Begins...

I was paying extra on the principle to finish paying it off sooner. Which apparently is working, since I'm currently finishing up 27 months ahead of schedule. So, yeah, I guess I will continue doing what I'm doing. My ultimate goal is to pay off as much as possible in case I happen to sell it. I want to clear as much as I can and not have to pay off so much from a sale.
 
Re: Rep Retirement Lodge 198 - A New Season Begins...

Scarlet said:
I was paying extra on the principle to finish paying it off sooner. Which apparently is working, since I'm currently finishing up 27 months ahead of schedule. So, yeah, I guess I will continue doing what I'm doing. My ultimate goal is to pay off as much as possible in case I happen to sell it. I want to clear as much as I can and not have to pay off so much from a sale.
Click to expand...

It's always better not to owe anything. That's my philosophy. I'd rather not be in someone else's pocket.
 
Re: Rep Retirement Lodge 198 - A New Season Begins...

Brenthoven said:
It's always better not to owe anything. That's my philosophy. I'd rather not be in someone else's pocket.
Click to expand...

Depends on the interest rate. If, for example, you're making 10% on investments, and paying 4% on debt, give me as much debt as possible, because I'm netting 6%. It is silly to pay off low interest debt, that is just free money. Pay it off as slowly as possible. High interest debt is the exact opposite, pay it off as quickly as possible.
 
Re: Rep Retirement Lodge 198 - A New Season Begins...

Busy weekend for me, and it looks like I could've bellied up to the HHT had I been able to pay attention. A sweep to open the season with a new coach, that sure is a nice way to go about it. It was against a low-level WCHA team, but still - sweep!
 
Re: Rep Retirement Lodge 198 - A New Season Begins...

bigblue_dl said:
Depends on the interest rate. If, for example, you're making 10% on investments, and paying 4% on debt, give me as much debt as possible, because I'm netting 6%. It is silly to pay off low interest debt, that is just free money. Pay it off as slowly as possible. High interest debt is the exact opposite, pay it off as quickly as possible.
Click to expand...

I just don't understand this way of thinking. I guess because I don't really have an investment portfolio and what I do have I'm not touching or using to pay off my mortgage. So, I'd rather just pay the thing off when I can. That way, if I decide to sell, I don't have to give a bigger portion to the bank to pay off that mortgage.
 
Re: Rep Retirement Lodge 198 - A New Season Begins...

Scarlet said:
I just don't understand this way of thinking. I guess because I don't really have an investment portfolio and what I do have I'm not touching or using to pay off my mortgage. So, I'd rather just pay the thing off when I can. That way, if I decide to sell, I don't have to give a bigger portion to the bank to pay off that mortgage.
Click to expand...

I'll do this with very simplistic math, and not get into compounding interest, etc.

Say you have $10,000, and you have 2 options for that money. First option is, you can pay off $10,000 worth of debt, which is at a rate of 5%. Over the next year, without that debt, the money you're saving is 5% of $10,000, so, that's $500. (it really isn't $500, due to the aforementioned compounding interest, but for the example, it works close enough). Second option is, you can invest that $10,000 at 10%, which is $1000 over the next year. You're making $500 just by making that smart decision to invest instead of pay off low interest debt.
 
Re: Rep Retirement Lodge 198 - A New Season Begins...

Scarlet said:
I just don't understand this way of thinking. I guess because I don't really have an investment portfolio and what I do have I'm not touching or using to pay off my mortgage. So, I'd rather just pay the thing off when I can. That way, if I decide to sell, I don't have to give a bigger portion to the bank to pay off that mortgage.
Click to expand...

Think of it like a bank. The bank takes your deposits, pays you (going high here) 2% on your savings account balance. The bank then lends out your money anywhere from 3.7-15%, depending upon the type of loan. The difference between your 2% and their 3.7-15% is their gross margin. bbdl is advocating doing essentially the same thing, only your investments are not likely to be loans and you don't have the operating expenses a bank does.
 
MavHockey14 said:
Correct — unless you feel your monthly payment is more comfortable for you with the lower payment, keep it as is — I always ask my clients, if you need new tires on the car, your water heater breaks, and you have an unexpected medical bill all in the same month, is this minimum payment still comfortable for you? If that’s the case with your current mortgage, I’d keep it as is. If you feel the new (lower) payment would be more reasonable for your minimum payment, then it becomes more advantageous to lower it.

Flip side of this as well is how do you look at debt? Do you want none of it ever and want things paid as fast as humanly possible?

Or can you use the money you’re borrowing to make more money?

For example, if you put an extra $1,000 towards the principle, when the interest on it is 4%, can you make 5% on it anywhere? If so, why pay extra? Now of course, there’s risk involved putting your money into a market, etc. but long term you’re generally going to see returns higher than what rates have been on mortgages (until the last few months maybe).
Click to expand...

As I was saying... people usually think one way or the other :)
bigblue_dl said:
Depends on the interest rate. If, for example, you're making 10% on investments, and paying 4% on debt, give me as much debt as possible, because I'm netting 6%. It is silly to pay off low interest debt, that is just free money. Pay it off as slowly as possible. High interest debt is the exact opposite, pay it off as quickly as possible.
Click to expand...

Brenthoven said:
It's always better not to owe anything. That's my philosophy. I'd rather not be in someone else's pocket.
Click to expand...
 
bigblue_dl said:
Depends on the interest rate. If, for example, you're making 10% on investments, and paying 4% on debt, give me as much debt as possible, because I'm netting 6%. It is silly to pay off low interest debt, that is just free money. Pay it off as slowly as possible. High interest debt is the exact opposite, pay it off as quickly as possible.
Click to expand...

This is exactly how I think as well — if you’re gonna let me make 6% on money that’s not mine, sign me up.
 
Re: Rep Retirement Lodge 198 - A New Season Begins...

What's funny is when I got my car loan last year, the bank was wondering about my low credit history. Not much credit activity in general, and my only other previous loan was 15 years prior, (when I bought my Jeep), so it was off the books/record. They were rather confused about that at first, until they realized I only buy what I can afford. I do use a credit card for things, but always pay the balance off every month.

I also pay a little more than the minimum on my current car loan, depends on how much OT I accrue (extra money) to get this current loan done with. I go anywhere from 5%-20% over the minimum monthly payment. I know I've shaved off more than a few months of the life of the loan.
 
Brenthoven said:
What's funny is when I got my car loan last year, the bank was wondering about my low credit history. Not much credit activity in general, and my only other previous loan was 15 years prior, (when I bought my Jeep), so it was off the books/record. They were rather confused about that at first, until they realized I only buy what I can afford. I do use a credit card for things, but always pay the balance off every month.

I also pay a little more than the minimum on my current car loan, depends on how much OT I accrue (extra money) to get this current loan done with. I go anywhere from 5%-20% over the minimum monthly payment. I know I've shaved off more than a few months of the life of the loan.
Click to expand...
Yeah, when there is little to no credit history, building up a credit history with rent, cell phone bill, etc showing on time payments, etc generally has to happen — it sounds like you at least have a credit score as a basis even though you may not have very many credit lines.
 
Re: Rep Retirement Lodge 198 - A New Season Begins...

MavHockey14 said:
Yeah, when there is little to no credit history, building up a credit history with rent, cell phone bill, etc showing on time payments, etc generally has to happen — it sounds like you at least have a credit score as a basis even though you may not have very many credit lines.
Click to expand...

I was told/taught when I was young to make sure to get loans, credit cards, etc. and pay them off, just to establish credit. I've had great credit ever since I turned 18. Got my first loan when I was 13, from the bank, to buy a 4-wheeler (dad had to co-sign). Had an ag business loan to buy some breeding heifers when I was probably 15-16. Got a automobile loan to buy my truck when I was 16. Got them all paid off on time, and haven't looked back.
 
Re: Rep Retirement Lodge 198 - A New Season Begins...

bigblue_dl said:
I'll do this with very simplistic math, and not get into compounding interest, etc.

Say you have $10,000, and you have 2 options for that money. First option is, you can pay off $10,000 worth of debt, which is at a rate of 5%. Over the next year, without that debt, the money you're saving is 5% of $10,000, so, that's $500. (it really isn't $500, due to the aforementioned compounding interest, but for the example, it works close enough). Second option is, you can invest that $10,000 at 10%, which is $1000 over the next year. You're making $500 just by making that smart decision to invest instead of pay off low interest debt.
Click to expand...

This is confusing. Are you saying:

- I have $10,000 in debt
- I also have $10,000 that I can use to pay off that $10,000 in debt

So why isn't that a 1-for1? Where does interest come in with all of this? And first off - I really appreciate you walking me through this. I just want to make sure I understand what you're telling me. Is this what you're trying to say?

- I have $10,000 in a bank savings account earning, let's say 1%. So end of a year, that $10,000 is now worth $10,100.
- Or, I can take that $10,000 to invest it with something at a 10% interest rate so that $10,000 is now worth $11,000 end of year.
- The $10,000 I owe has 5% interest so I owe $10,500, not $10,000.
- If I leave the $10,000 in the bank getting 1% interest, I'm better off paying it off
- If I am able to find something with a higher return than the interest rate on the loan, I should just not pay any additional, just continue as is?
 
Re: Rep Retirement Lodge 198 - A New Season Begins...

bigblue_dl said:
I was told/taught when I was young to make sure to get loans, credit cards, etc. and pay them off, just to establish credit. I've had great credit ever since I turned 18. Got my first loan when I was 13, from the bank, to buy a 4-wheeler (dad had to co-sign). Had an ag business loan to buy some breeding heifers when I was probably 15-16. Got a automobile loan to buy my truck when I was 16. Got them all paid off on time, and haven't looked back.
Click to expand...

I learned that the hard way when I bought my Jeep. I had no credit history. I think what also helped is my longevity at my job and residence this time around (17 years and 10 years, respectively). It shows reliability and commitment. I could be wrong, though. Either way, I got a favorable loan, a great minimum monthly payment, and my pocketbook is thanking me.
 
Re: Rep Retirement Lodge 198 - A New Season Begins...

Scarlet said:
This is confusing. Are you saying:

- I have $10,000 in debt
- I also have $10,000 that I can use to pay off that $10,000 in debt

So why isn't that a 1-for1? Where does interest come in with all of this? And first off - I really appreciate you walking me through this. I just want to make sure I understand what you're telling me. Is this what you're trying to say?

- I have $10,000 in a bank savings account earning, let's say 1%. So end of a year, that $10,000 is now worth $10,100.
- Or, I can take that $10,000 to invest it with something at a 10% interest rate so that $10,000 is now worth $11,000 end of year.
- The $10,000 I owe has 5% interest so I owe $10,500, not $10,000.
- If I leave the $10,000 in the bank getting 1% interest, I'm better off paying it off
- If I am able to find something with a higher return than the interest rate on the loan, I should just not pay any additional, just continue as is?
Click to expand...
That. I think.
 
Re: Rep Retirement Lodge 198 - A New Season Begins...

Scarlet said:
This is confusing. Are you saying:


- If I am able to find something with a higher return than the interest rate on the loan, I should just not pay any additional, just continue as is?
Click to expand...

Yes. If you have $10k outstanding, and you have an investment opportunity for $10k that you expect to pay greater interest to you than you pay to your outstanding loan, then you invest your money rather than pay off the debt at an advanced schedule/rate.
 
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