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Originally Posted by golfing eagles
A lot of "voodoo" economics floating around this thread.
First of all, I agree that everyone should do what they think is right for their situation.
I chose not to pay it off, and here is why----
My bond is $28,742 for which I pay $2,004 for 30 years = $60,120
The same $28,742 invested in the stock market for 30 years at the 100 year statistical ROI of 8% ends up being $289,221. (Do the math) Food for thought for those that claim it is a "no-brainer" to pay it off, or suggest that a financial advisor is somehow an idiot for advising a client not to pay it off. But once again, it remains a personal decision for each individual to make.
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Sorry to say I disagree with this. You have to assume if you do this that you now take the $2,004 you save by not having a bond payment and dollar cost average it into the stock market at 8% which gives you $248,900 plus the $31,378 you save paying off the bond = $280,278. So basically it does cost you a little bit. However, my experience has been that guaranteeing 8% is crazy, especially in a rising rate bond environment and the stock market at current valuation. Overall, I have to agree the decision is a wash financially, but it does come down to the fact if you pay the bond off, it is a guaranteed return.
I paid mine off right away, but I have a rental, so I can depreciate it as part of the home cost. Slightly different calculation.