Talk of The Villages Florida - View Single Post - Pay off the bond or not??
Thread: Pay off the bond or not??
View Single Post
 
Old 06-15-2009, 07:52 PM
downeaster downeaster is offline
Platinum member
Join Date: Jun 2008
Posts: 1,562
Thanks: 0
Thanked 8 Times in 5 Posts
Default
Quote:
Originally Posted by katezbox View Post
Downeaster,

I have to slightly disagree. It is not personal preference - but as Caroline points out, there are better and worse choices for individual situations from a financial point of view.

However, if the thought of debt keeps you up at night, paying it off may be the right choice and here I agree this is personal preference.

Also, you cannot compare interest rate on the bond to what your portfolio is earning. You need to compare the future value of the sum of the bond payments (principal and interest) to the future value of the investments you would liquidate - including compounded earnings. Let's hope 5 years from now we earn more than 2%.
Exactly, Kate, one should consider all aspects that are relevant to ones particular situation and make a decision one is comfortable with. It is a personal preference based on how it effects that person and not how it may effect someone in other circumstances.