What Are You Doing Right Now
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@scottalanmiller said in What Are You Doing Right Now:
@jt1001001 said in What Are You Doing Right Now:
@coliver @scottalanmiller Good idea, see I never worked in banking so I always looked at it as debt=bad but you're right with as cheap as loans are now so long as you make you're payments take the extra couple % and put away some place
Yeah, I look at it as debt=good. It just needs to be smart debt.
Then why do financial guys always tell you to not borrow money from your home to invest into the market with? My home rate is 2.675%, If I can get a rate of 8% why wouldn't I?
Personally the risk reward for most people probably isn't worth it.
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@scottalanmiller said in What Are You Doing Right Now:
@jt1001001 said in What Are You Doing Right Now:
@coliver @scottalanmiller Good idea, see I never worked in banking so I always looked at it as debt=bad but you're right with as cheap as loans are now so long as you make you're payments take the extra couple % and put away some place
Yeah, I look at it as debt=good. It just needs to be smart debt.
Well, if you're able to get a lone at 0%, that's free money. Be silly not to take advantage of it. I'm generally debt=bad, but exceptions exist.
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I put pretty much every purchase on credit cards, took and paid off a car loan, loan on bike and my credit score continues to increase.
So i dont believe debt=bad unless your irresponsible.
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@Dashrender said in What Are You Doing Right Now:
@scottalanmiller said in What Are You Doing Right Now:
@jt1001001 said in What Are You Doing Right Now:
@coliver @scottalanmiller Good idea, see I never worked in banking so I always looked at it as debt=bad but you're right with as cheap as loans are now so long as you make you're payments take the extra couple % and put away some place
Yeah, I look at it as debt=good. It just needs to be smart debt.
Then why do financial guys always tell you to not borrow money from your home to invest into the market with? My home rate is 2.675%, If I can get a rate of 8% why wouldn't I?
I think defining "financial guys" here is important. Are you talking about real investors and experts? Or those people that trick consumers into paying them for bad advice at the local "financial advice" office down the street where they've shown that monkeys throwing darts have a better chance of success?
Of course taking money out of your house and investing well pays off. That's how investing works... borrow well, invest well. That's how you magnify your investment power.
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@Dashrender said in What Are You Doing Right Now:
Personally the risk reward for most people probably isn't worth it.
Low risk ... that's the problem, most people actually prefer high risk, as odd as that sounds.
Low debt, bonds, low average returns, inflation exposure... all high risk and all things that average people like for some reason.
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@gjacobse here is what Comodo is using that is killing us: http://www.vicidial.com/
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@scottalanmiller said in What Are You Doing Right Now:
@gjacobse here is what Comodo is using that is killing us: http://www.vicidial.com/
Fun..
Seems like there are a number of usable options thus far
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If you make less than $116k as a single person and (I think) $183k as a couple you should be putting $5500 per year into a Roth IRA and using it as a container for mutual funds. Any debt you incur to make that a reality, lowers your gains. It's not as big of a deal with a Roth IRA because your gains and dividends aren't taxed. I would rather have zero debt than have debt, but if you can't afford to invest at all then you really need to make something happen. Outside of very successful short sellers the stock market is playing for the long game. The more years you have, the more time you have to recover. Those super variable index funds become more attractive the younger you are. Anyone who isn't doing this is making a mistake. Prepare for retirement. Sometimes you don't have a choice whether or not you are retiring.
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@tiagom said in What Are You Doing Right Now:
I put pretty much every purchase on credit cards, took and paid off a car loan, loan on bike and my credit score continues to increase.
So i dont believe debt=bad unless your irresponsible.
Well, all debt isn't bad. But with the education system (at all levels), pushing the debt=good drum ad nauseam, and combined with sales minions, well, the majority of loans end up being bad.
My grandfather always used to say "If it takes you 30 years to pay for something, you can't afford it." While a terrible generality, I think the idea behind it is good. Basically, if you will be paying for it longer than it's expected to last, you can't afford it.
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@travisdh1 said in What Are You Doing Right Now:
Well, all debt isn't bad. But with the education system (at all levels), pushing the debt=good drum ad nauseam, and combined with sales minions, well, the majority of loans end up being bad.
Do they? I hear the opposite, that debt is bad and that school isn't a decision. They don't push it by claiming that debt is good, but only that other things are more important. That's very different than debt being good.
Microsoft doesn't claim that cost is good, only that their products are worth more to you than they cost.
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@travisdh1 said in What Are You Doing Right Now:
My grandfather always used to say "If it takes you 30 years to pay for something, you can't afford it." While a terrible generality, I think the idea behind it is good. Basically, if you will be paying for it longer than it's expected to last, you can't afford it.
Houses should last far longer than that, though. And they are tax shelters.
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@wirestyle22 said in What Are You Doing Right Now:
If you make less than $116k as a single person and (I think) $183k as a couple you should be putting $5500 per year into a Roth IRA and using it as a container for mutual funds.
I do neither. No mutual funds, no retirement accounts
And by doing that is how I retired at 39.
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@wirestyle22 said in What Are You Doing Right Now:
It's not as big of a deal with a Roth IRA because your gains and dividends aren't taxed.
It is, just later.
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@travisdh1 said in What Are You Doing Right Now:
@tiagom said in What Are You Doing Right Now:
I put pretty much every purchase on credit cards, took and paid off a car loan, loan on bike and my credit score continues to increase.
So i dont believe debt=bad unless your irresponsible.
Well, all debt isn't bad. But with the education system (at all levels), pushing the debt=good drum ad nauseam, and combined with sales minions, well, the majority of loans end up being bad.
My grandfather always used to say "If it takes you 30 years to pay for something, you can't afford it." While a terrible generality, I think the idea behind it is good. Basically, if you will be paying for it longer than it's expected to last, you can't afford it.
There are some things I think that are ok to get into debt for... Cars and houses... Anything else is just asking for trouble. Am there, am working on that... Still trying to find a T-Shirt in my size.
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@dafyre said in What Are You Doing Right Now:
There are some things I think that are ok to get into debt for... Cars and houses... Anything else is just asking for trouble. Am there, am working on that... Still trying to find a T-Shirt in my size.
Those things make more sense more often, but on the back end it is 100% about debt rate, and opportunity rate. If the opportunity rate is higher than the debt rate, it's good debt every time regardless of what it is that you are talking about.
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Here is the simplest example... banks borrow money from the fed at 1%. They loan that money to customers at 2%.
Debt Rate: 1%
Opportunity Rate: 2%
Profit Delta: 1%The bank earns 1% on every penny of debt that it takes on. When opportunity exceeds debt rate, it's always beneficial. The bank literally earns 1% by taking on debt.
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So for the same idea... Take out a home equity loan at 3% and put in in Vanguard where my return will be say... 5 - 10 %?
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@dafyre said in What Are You Doing Right Now:
So for the same idea... Take out a home equity loan at 3% and put in in Vanguard where my return will be say... 5 - 10 %?
Exactly. Your profit is 2-3% while getting a tax benefit too!
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Free money!
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@scottalanmiller said in What Are You Doing Right Now:
Free money!
Where does the tax benefit come in?
