Quote:
Originally Posted by Arctic Fox
Yes, funny how the math changes so quickly, and that "no brainer; should get close to 8% over thirty years" suddenly isn't the panacea that it was several times earlier in this thread.
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The math has not changed at all. Let's try this again ---
the 100 year average yearly returns on investment in the stock market is just about 8%. There are up years and down years, but it is still an 8% return averaged over 100 years. If you are looking to invest for 1 or 2 years, don't count on 8%, you may be down 40%. But a thirty year investment is more than likely to approximate the last 100 years.
Next, I hope you see the huge difference between mortgaging a property you already own to put it in the market for 30 years and deciding whether or not to pay off a NEWLY INCURRED expense of a bond. A $500,000 mortgage, 30 years at 4% will cost you about $2400/month, so you would needs steady up years just to generate the cash flow to cover that. A $25,000 bond at 6% for 30 years costs $150/ month, so you are comparing apples and oranges
Now if I already had a $500,000 mortgage, was working and could easily meet the payments, was 25 years old and came into a $500,000 lottery ticket, that money would be going straight into a targeted date fund and remain untouched for 30 years.
Yes, the math is the same.