Posted on 07/14/2006 5:50:11 AM PDT by libstripper
Hopefully one of their investments is Long Term Care insurance, or the state might end up getting a lot of that money if one, or both, of them has to go the Medicaid route. Not to mention that the Deficit Reduction Act of 2005 disqualifies anyone from Medicaid who has home equity greater than $500,000 (though CA and few other states can set a higher limit). Note: I'm not involved in profiting from LTC insurance sales in any way. Just glad I bought it a few years back.
There's anohter way to look at pay9ing off the house note. The interest on the note usually exceeds the rate of returnon most fixed income investments. Thus, as an element of a diversified portfolio, paying off that note can make a lot of sense instead of putting the money into stocks.
Of course, todays 25 year olds will find that a million is what they will need to live on per year in 35 years.
Your financial advisor must be Ric Edelman.
So I must agree with you here. Conversely if there are other money making goals that are entwined with the need to pay down interest and principle, I think it would depend on how insulated the person is from risk, as well as how comfortable they are with risk, as well as what there short term needs are.
Delayed gratification . . . I swear this word has been erased from the English vocabulary, but you are so right. It is critical for any sound building of anything that is of true value or substance, I swear. No where is this most externally obvious then when it comes to money (maybe when it comes to food and exercise :-).
You were so blessed to have such a role model. Thanks for the reminder.
Yup,you're right.I don't know if you've ever heard the saying "the older I get,the smarter my Dad/Mom gets" but that certainly applies to both of my folks.
But then,I'm a big believer in the concept of "The Greatest Generation".I strongly believe that the hardships they endured...the Depression,WWII,Korea *and* the Cold War allowed them (or forced them) to develop a strength of character that's all-too-rare in Boomers and subsequent generations.
But that's just my opinion.
Wise move.
Follow that approach over an entire career and you will retire a millionaire.
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And you will still be trying to figure out how to make ends meet because of inflation!
$100 placed at 7 percent interest compounded quarterly for 200 years will increase to more than $100,000,000 -- by which time it will be worth nothing.
Most likely so, or too close to it for comfort. I am amused by those who so glibly point the way for young people to raise a million over forty years as if it will still amount to something. I like to recall the ads I used to see on the back of Reader's Digest in the late fifties which offered to send info on "how to retire in fifteen years with an income of $300.00 a month". It seemed quite plausible at the time.
He had the family homestead,located in an upper middle class suburb of Boston,paid off within 8 years of having bought it...all the while supporting 4 kids and my Mom,who never worked outside the home.
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To do the same thing today, even with the most stringent scrimping and saving would require an income of how much? I am guessing at least $150,000. and I really have no idea what the house would be worth in such a location. What did your father do for a living.
Crap.
So we're getting a loan to pay off ALL our debts (except the house), paying our "stupid tax", then selling the bike and applying that toward the loan. Our total debt will drop considerably and we can actually pay it all off.
After everything is paid off we'll start saving to have a house built and put money aside for retirement.
We did get a 15 year loan that I'm stubbornly refusing to refinance no matter what. It would be nice to not have a mortgage payment when we're retired!
But they're the ones who raised us Boomers, remember? ;)
Wow, what a cautionary tale. To spend so much on a Harley and not even be able to keep it....
I did raise my eyebrows a little at "The Harley company helpfully added to the loan all of our other vehicle payments..." ALL of our others? Not sure how many vehicles, or how many payments, that is - but if it's more than one it's over my comfort level.
You're paying a high price for his little testosterone rush - good luck in the future! :)
After the bike is gone we'll be getting another, much cheaper, second-hand bike for him to ride to work. A bike like that would save so much on gas that it would pay for itself. *That* is what we should've done in the first place!
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