Quote:
Originally Posted by dewilson58
I agree with the Corporate America statements........leveraging debt works.
After adding in the Admin Fee, the effective rate on my bond was in excess of 7%. My investment return would have to be in excess of 10% (less taxes), to breakeven. So a guaranteed return of 10% (by paying off the debt), I decided to pay it off.
Every situation is different, every logic is different. Good luck to all on the chosen path.
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Quote:
Originally Posted by Villageswimmer
Look at your own Amortization Statement to see what the bond is really costing you over the 30 years. There is also an "administrative fee" tacked on annually.
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Absolutely good points.
You need to actually know both what the debt service is really costing you, as well as what your actual returns are on investments when including the expense ratio.
However, if they are almost identical there is still something to be said for maintaining a certain amount of liquidity....for an opportunity that might arise.
Conversely, the personal feeling of no longer having that debt, while hard to quantify except by each individual....is also something to consider.
dewilson nailed it with....
Quote:
Originally Posted by dewilson58
Every situation is different, every logic is different.
Good luck to all on the chosen path.
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