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  #16  
Old 03-04-2015, 03:23 PM
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When all gets said and done most of us do not care if the banks wind up selling their loans (our mortgage). It does not change anything. The banks make a profit and there is still enough left for the new owner to make a few $$ as well.

As far as never having a mortgage or paying interest...that is fine if that is one's choice. But as some have already stated having a mortgage for less than 4% and making 8% in investments is a no brainer.

Granted there is a satisfaction in knowing one does not owe anybody anything.
I have always subscribed to the practice of using other peoples money (banks) as long as it makes more money fo me to do so.

A lot of retirees have a goal to have their house paid in full. Again fine if that is their goal.
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  #17  
Old 03-04-2015, 06:12 PM
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Originally Posted by prior poster

As far as never having a mortgage or paying interest...that is fine if that is one's choice. But as some have already stated having a mortgage for less than 4% and making 8% in investments is a no brainer.
Hmmm...I realize you pay the 4% in interest on the mortgage and then you get a tax deduction (not to be confused with a tax credit, where you would deduct the 4% paid on the tax owed), but don't you also have to pay income tax on that 8% return (income) on investments?

As long as you are sharing your financial wisdom...If your investments in the portfolio take a nose dive (lets say you invested in Seadrill and the recent crude oil prices have driven your holdings value down), would you be able to deduct those losses from your taxes? Would you have to sell the stock at the losing price to take the deduction?

Oh never mind...I could not sleep at night worrying about all that!

Last edited by dirtbanker; 03-04-2015 at 06:13 PM. Reason: forgot an "h"
  #18  
Old 03-04-2015, 07:00 PM
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Originally Posted by Challenger View Post
My guess is that if the value of the pledged stock falls past a defined percentage of the outstanding loan, the borrower will need to post additional security on pay down---- yes? no?
65% of pledged stock so if you sell some you have to pay down the loan.

We previously when we moved did what others are advising here invested the money from our sold house and took out a mortgage when we bought. The after tax effect of the investment made us money which has helped us buy now. However it is not without risk, we were both working at the time if the stock market tanks it could be a risk. As total funding for a purchase a portfolio loan would require a huge portfolio but as an augment to cash and an avoidance to liquidation of a growth position it is an option.
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  #19  
Old 03-04-2015, 07:05 PM
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Originally Posted by dirtbanker View Post
Hmmm...I realize you pay the 4% in interest on the mortgage and then you get a tax deduction (not to be confused with a tax credit, where you would deduct the 4% paid on the tax owed), but don't you also have to pay income tax on that 8% return (income) on investments?

As long as you are sharing your financial wisdom...If your investments in the portfolio take a nose dive (lets say you invested in Seadrill and the recent crude oil prices have driven your holdings value down), would you be able to deduct those losses from your taxes? Would you have to sell the stock at the losing price to take the deduction?

Oh never mind...I could not sleep at night worrying about all that!
As I understand it and I am no expert you can only take a loss by selling a stock. You can however if you wait at least 30 days to repurchase at the lower rate realize the loss for tax purposes and the basis of the new purchase is the lower price. if you sell or buy a stock within 30 days of trading it the wash sale rules apply and you don't get to deduct the loss.
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  #20  
Old 03-04-2015, 07:16 PM
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Originally Posted by Chatbrat View Post
Have never paid any interest in my life, never had a mortgage-interest keeps poor people poor and makes rich people richer. Have no pension--live off of interest & dividends.
Never borrowed? Then you have lost out on many opportunities to better your financial situation. Just a credit card, when paid in full each month, is borrowing with no interest payment. Most well off people understand that it is always better to use some else's money rather then your own. You should always do what you are comfortable with but NEVER assume that no "debt" is better than no good debt at all.

Last edited by pmbinnj; 03-04-2015 at 07:57 PM.
  #21  
Old 03-04-2015, 07:22 PM
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Originally Posted by TrudyM View Post
As I understand it and I am no expert you can only take a loss by selling a stock. You can however if you wait at least 30 days to repurchase at the lower rate realize the loss for tax purposes and the basis of the new purchase is the lower price. if you sell or buy a stock within 30 days of trading it the wash sale rules apply and you don't get to deduct the loss.
Yes, true, must sell to have a loss. But this can be a good thing. Consider the ways around a wash sale. Sell the stock for a loss, take the tax deduction, then buy a mutual fund (which holds a large amount of the stock you took the loss on) and consider this a tax loss harvesting situation. Come back later and buy the stock you assume will appreciate. Works nicely and within the irs. I'd rather have it appreciate for me than pay the tax...just saying...
  #22  
Old 03-04-2015, 07:48 PM
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We use a credit card for almost 100% of all our monthly purchasing/living expenses.
We use Citi Banks Double cash rewards card.

One percent credit for evey dollar spent. Then one more percent when it is paid off. As we never carry a balance and pay it off in full each month there is an effect of 2 percent credit per month. And unlike most other reward cards there is no limit to the accumulated credits. Which can be redeemed for cash or merchandise or other stuff.

Depending on one's monthly living expenses there is a fair amount of cash back at the end of each year. One does not spend any more than if they were paying cash for everything.

There are many other benefits like charging travel, extended warraties on merchandise paid for with the card.

I believe in the old saying pennies make dollars. And in this case dollars make more dollars.
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  #23  
Old 03-04-2015, 07:57 PM
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Originally Posted by billethkid View Post
We use a credit card for almost 100% of all our monthly purchasing/living expenses.

We use Citi Banks Double cash rewards card.



One percent credit for evey dollar spent. Then one more percent when it is paid off. As we never carry a balance and pay it off in full each month there is an effect of 2 percent credit per month. And unlike most other reward cards there is no limit to the accumulated credits. Which can be redeemed for cash or merchandise or other stuff.



Depending on one's monthly living expenses there is a fair amount of cash back at the end of each year. One does not spend any more than if they were paying cash for everything.



There are many other benefits like charging travel, extended warraties on merchandise paid for with the card.



I believe in the old saying pennies make dollars. And in this case dollars make more dollars.

The vast majority of people don't have the discipline you have. The slaveowners know this and make hundreds of billions on their indentured servants. Me, I approach these things the way Dave Ramsey does, neither a borrower or lender be.
  #24  
Old 03-04-2015, 08:32 PM
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The vast majority of people don't have the discipline you have. The slaveowners know this and make hundreds of billions on their indentured servants. Me, I approach these things the way Dave Ramsey does, neither a borrower or lender be.
There is a difference between sound financial advice and content that merely sells books to the masses. When it comes to long term, profitable investing, formal education and discipline go hand in hand. And, using knowledge to make the right investment selections can compensate for any possible lack of discipline. Consider automatic deductions to provide for dollar cost averaging = knowledge compensating for lack of discipline.

Many people rely on knowledge (really good!) or knowledge and sheer common sense (ok - nothing wrong with that). But relying on a popular author (with a Bachelors’s degree) to determine my financial future? No thanks. The person using their credit card wisely is miles ahead. People without debt always think they are better off –but those who strategically use debt to their financial advantage are actually the ones who are better off in the long run.

I thank the credit card companies every month for loaning me money at 0% interest.
  #25  
Old 03-04-2015, 08:35 PM
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Originally Posted by pmbinnj View Post
There is a difference between sound financial advice and content that merely sells books to the masses. When it comes to long term, profitable investing, formal education and discipline go hand in hand. And, using knowledge to make the right investment selections can compensate for any possible lack of discipline. Consider automatic deductions to provide for dollar cost averaging = knowledge compensating for lack of discipline.



Many people rely on knowledge (really good!) or knowledge and sheer common sense (ok - nothing wrong with that). But relying on a popular author (with a Bachelors’s degree) to determine my financial future? No thanks. The person using their credit card wisely is miles ahead. People without debt always think they are better off –but those who strategically use debt to their financial advantage are actually the ones who are better off in the long run.



I thank the credit card companies every month for loaning me money at 0% interest.

No disrespect intended, but that is a whole lot of popular crap. Remember, it was the tortoise that won the race.
  #26  
Old 03-04-2015, 08:56 PM
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Originally Posted by RickeyD View Post
No disrespect intended, but that is a whole lot of popular crap. Remember, it was the tortoise that won the race.
No disrespect taken. I don't know a thing about tortoises but I just hope the college students I taught for over 2 decades don't think that a book for the masses replaces a solid education. After all, no one can take your education away from you...but the masses are asses. Everyone has to do what they are comfortable with but smart choices are not more undesirable just because they are not your choice.
  #27  
Old 03-04-2015, 09:18 PM
dirtbanker dirtbanker is offline
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You can however if you wait at least 30 days to repurchase at the lower rate realize the loss for tax purposes and the basis of the new purchase is the lower price.
Yes, that is probably what most would like to do if they had just lost 60K in an investment 30 days prior - buy more when the value dropped further. I wonder how many took advantage of that investment opportunity October 30th, 2008...maybe many of them had capital in a savings account to fund the purchase of the beaten stock...

Some people fool themselves with funny math with regard to leverage. Tax deductions will never cover the true costs of leverage (you only save the amount you would be taxed on for the amount of the expenditure). If they were tax credits than leverage would be the way to go (you would deduct the cost of the expenditure from your owed tax).

Last edited by dirtbanker; 03-04-2015 at 09:20 PM. Reason: past tense correction
  #28  
Old 03-04-2015, 09:42 PM
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Originally Posted by pmbinnj View Post
No disrespect taken. I don't know a thing about tortoises but I just hope the college students I taught for over 2 decades don't think that a book for the masses replaces a solid education. After all, no one can take your education away from you...but the masses are asses. Everyone has to do what they are comfortable with but smart choices are not more undesirable just because they are not your choice.

I tried college for a year or so, learned nothing about life or how to make money. I'm now light years ahead of most college graduates. College teaches nothing useful, IMHO. I never read Dave Ramsey's book, but I have listened to him and I found we are very much the same when it comes to common money sense. If we're on the subject of masses are asses I couldn't agree with you more. Neither can the slaveowners. Like I said, most people don't have the discipline that you have or profess to others. Credit card points/ rewards suck in the money wise foolish that need instant gratification to fill a need that only hard work and patience can truly satisfy. When these folks finally realize the chains of debt that have weighed them down for so many of their working years can not support the years we can no longer or don't want to work, it's too late. Their golden years will not be golden. They will not live in comfort, and eventually will become a debt burden on all of us through higher taxes for social services. The banks win, we loose.
  #29  
Old 03-04-2015, 11:30 PM
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I did not buy outright. Mortgage was my way to go. No need to use my funds to pay off a home at my age.
  #30  
Old 03-05-2015, 09:44 PM
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Originally Posted by RickeyD View Post
I tried college for a year or so, learned nothing about life or how to make money. I'm now light years ahead of most college graduates. College teaches nothing useful, IMHO. I never read Dave Ramsey's book, but I have listened to him and I found we are very much the same when it comes to common money sense. If we're on the subject of masses are asses I couldn't agree with you more. Neither can the slaveowners. Like I said, most people don't have the discipline that you have or profess to others. Credit card points/ rewards suck in the money wise foolish that need instant gratification to fill a need that only hard work and patience can truly satisfy. When these folks finally realize the chains of debt that have weighed them down for so many of their working years can not support the years we can no longer or don't want to work, it's too late. Their golden years will not be golden. They will not live in comfort, and eventually will become a debt burden on all of us through higher taxes for social services. The banks win, we loose.
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