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Posted: 2/22/2021 12:48:58 PM EST
Lots of threads lately about whether or not to pay a mortgage off early, but let's look at it another way.

If your home was paid off, would you pull cash out of it (assuming you could do so at a low interest rate) to invest and/or upgrade your home/property, or do anything else with the cash?
Link Posted: 2/22/2021 12:55:24 PM EST
I'm not.

I could see using a heloc to cover any emergencies, but I like sitting in my paid off house.
Link Posted: 2/22/2021 12:56:29 PM EST
Pull out

Invest until real estate collapses

Become slumlord with 10 rentals

Sell to gentrifiers in 15 years
Link Posted: 2/22/2021 12:56:38 PM EST
I wouldn't gamble with my house.
Link Posted: 2/22/2021 12:57:34 PM EST
Too many variables to answer definitively, age, health, financial situation etc.

I would consider the option if I needed to buy another property or start/expand a business.
Link Posted: 2/22/2021 12:57:54 PM EST
Theoretically might be a good move - but I don't think I'd actually do it.


Link Posted: 2/22/2021 12:59:36 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By crownvic96:
I wouldn't gamble with my house.
View Quote


This. Not just no, but Fuck no.
Link Posted: 2/22/2021 1:00:32 PM EST
IBTP...



...and no
Link Posted: 2/22/2021 1:01:07 PM EST
Possibly to make improvements to my house and only if they add as much or more more value as the loan.
Link Posted: 2/22/2021 1:01:17 PM EST
Theoretically, yes. I can pay off my current house at the moment, but I will be investing in more rentals instead. Those things have been a cash cow for me in my particular area.

That said, there’s risk involved. I can absorb that risk because I’m young. I also don’t think you can discount the peace of mind in knowing that you don’t have any significant monthly payments to keep up with.

If I were 55+ sitting in a paid off house, I don’t think I’d borrow against it.
Link Posted: 2/22/2021 1:02:12 PM EST
Originally Posted By samo38:
...but I like sitting in my paid off house.
View Quote


Originally Posted By crownvic96:
I wouldn't gamble with my house.
View Quote



I'll 3rd that - I like having a paid off home and wouldn't gamble with it.  YMMV.
Link Posted: 2/22/2021 1:02:57 PM EST
[Last Edit: 2/22/2021 1:03:56 PM EST by BustinCaps]
Yup. But it would be well diversified. ~25% equity is the sweet spot to me.

My highest risk investing is reserved for spare income after tax advantaged accounts are maxed.

Pulling a mortgage so you can buy Bro dozers and boats is the opposite of a good idea, however.
Link Posted: 2/22/2021 1:03:01 PM EST
[Last Edit: 2/22/2021 1:05:51 PM EST by The_Noob_Again]
I personally wouldn't because its against my investment philosophy which is primarily focused on debt to income. Taking out money increases your debt - no matter how you want to look at it.
Buying stock with borrowed money is something I'd strongly advise against as well - with the current market even more so. If you are self-employed, depending on the size of your company, dept can be an advantage and a tax optimization tool.
Ask the orange man :-)


Link Posted: 2/22/2021 1:03:27 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By wakeboarder:
Pull out

Invest until real estate collapses

Become slumlord with 10 rentals

Sell to gentrifiers in 15 years
View Quote


I watched the nightmare of the rental properties my parents owned, FUCK THAT HASSEL.
Link Posted: 2/22/2021 1:04:59 PM EST
I have other money to play with. Although the idea of borrowing $1000000 and buying Ford at $2 looks like a great idea in retrospect.
Link Posted: 2/22/2021 1:12:11 PM EST
[Last Edit: 2/22/2021 1:12:27 PM EST by Bizzarolibe]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By DamascusKnifemaker:


I watched the nightmare of the rental properties my parents owned, FUCK THAT HASSEL.
View Quote


A properly managed rental property will almost never give you problems.

Properly managed rentals also require very little work to operate. I spend maybe 15 hours per year managing mine (currently have 3). Yes. That includes literally everything having to do with property management.
Link Posted: 2/22/2021 1:12:37 PM EST
I learned here that if you don't pull cash out of your home to invest, you are bad at math and terrible with money.  

One has to wonder why the banks even mess around with the loan business when they could make a lot more money in the stock market.  (That's a rhetorical statement).

Joking aside, my real answer is no.  Too risky.  If you feel that you need to pull cash out of your home to invest, either: (a) Your home is too big for your income, or (b) You should cut expenses and/or increase income so you have enough to invest to reach your goals without risking your home.
Link Posted: 2/22/2021 1:19:13 PM EST
I would never do that. This past week has made me look even smarter as we sat comfortably in our paid for home watching the wood ducks on our frozen lake with the fireplace roaring. We wanted for nothing and it cost nothing to want nothing. Nope. Not ever ever. I spent a n hour this morning tightening drawer pulls and knobs. Went to town and got thirty gallons of drinking water to add to the stash. I'm about to slice up a Prime Rib Eye for the wife to make a dish with tonight.
Link Posted: 2/22/2021 1:22:39 PM EST
No, make "mortgage" payments to your investment account.  

It keeps you out of debt and buying equities monthly helps dollar cost average.  

Then again, no risk, no reward and returns are multiplied via leverage...
Link Posted: 2/22/2021 1:23:29 PM EST
Nope
Link Posted: 2/22/2021 1:53:30 PM EST
So you want to pull equity out of you house and buy over priced expensive stocks?  What could go wrong?
Link Posted: 2/22/2021 3:10:27 PM EST
I wouldn't pull money out of my home to invest but I wouldn't go out of my way to pay off my mortgage any sooner either.
Link Posted: 2/22/2021 3:11:28 PM EST
Nope
Link Posted: 2/22/2021 3:15:43 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By wakeboarder:
Pull out

Invest until real estate collapses

Become slumlord with 10 rentals

Sell to gentrifiers in 15 years  
View Quote


I'm sure that worked out well for people who had 10 rentals with renters who haven't paid a penny of rent with Uncle blocking evictions for the past year.
Link Posted: 2/22/2021 3:16:22 PM EST
Originally Posted By Ironmaker:
No, make "mortgage" payments to your investment account.  

It keeps you out of debt and buying equities monthly helps dollar cost average.  

Then again, no risk, no reward and returns are multiplied via leverage...
View Quote

Originally Posted By AKSU:
Nope
View Quote

Originally Posted By shooter_from_show-me:
Nope
View Quote
Link Posted: 2/22/2021 3:18:32 PM EST
I would not.
Link Posted: 2/22/2021 3:18:34 PM EST
Originally Posted By UTex86:
Lots of threads lately about whether or not to pay a mortgage off early, but let's look at it another way.

If your home was paid off, would you pull cash out of it (assuming you could do so at a low interest rate) to invest and/or upgrade your home/property, or do anything else with the cash?
View Quote


Fuck No.


Think about it dude, you have a place that you worked your ass off to pay for and are finally at a place in life where a bank doesn’t own you and your job doesn’t own you..


And you want to throw your house on the stock market -which is a rigged game- and gamble with your home?

Fuck that. I don’t care if it’s only 10%... the money you have in the bank could be worthless, social security could go bankrupt, your 401k could be Nationalized, any number of financial devastation could fall your way but at least you have a roof over your head... why fuck with that?
Link Posted: 2/22/2021 3:20:29 PM EST
Not No but Hell No
Link Posted: 2/22/2021 3:21:10 PM EST
Lol! A dick in the hand is worth two in the bush.
Link Posted: 2/22/2021 3:21:43 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Lowcash:





I'll 3rd that - I like having a paid off home and wouldn't gamble with it.  YMMV.
View Quote


A house is supposed to be a place you put your feet up and use to store your shit, not an investment vehicle or piggy bank. Much of the COLA increases we see come from the easy money that Dumbasses who Equity Stripped their homes to buy shit they couldn’t afford and go on vacations like they are a TV family.
Link Posted: 2/22/2021 3:21:51 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By rbarry3715:
I have other money to play with. Although the idea of borrowing $1000000 and buying Ford at $2 looks like a great idea in retrospect.  
View Quote


I know a group of guys on a car forum who took that gamble.  Raided their retirement savings, 401Ks, kids college funds and it paid off handsomely for them.  Wish I'd had the free funds to join them, because all of them now hold 6 to 8 digits worth of Ford stock.
Link Posted: 2/22/2021 3:22:50 PM EST
The markets are stupidly priced right now. Buying in now is dumb.

Wait till till it all crashes - because it fucking will with democrats running everything - then buy in.

Anybody buying into this market right now except for a very few situations is more brain dead than biden.
Link Posted: 2/22/2021 3:23:47 PM EST
It really depends what you invest in.
Link Posted: 2/22/2021 3:26:48 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Recorderguy:


This. Not just no, but Fuck no.
View Quote View All Quotes
View All Quotes
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Recorderguy:
Originally Posted By crownvic96:
I wouldn't gamble with my house.


This. Not just no, but Fuck no.

Link Posted: 2/22/2021 3:28:10 PM EST
Link Posted: 2/22/2021 3:31:06 PM EST
Short answer.... No.

Long answer... I would get a HELOC and that would become my Emergency Fund. Then I would move my emergency fund money into Investments. So, a hybrid solution. Of course, my answer is based on my age, income, and job stability. Your situation may be different!

Accountant
Link Posted: 2/22/2021 3:32:36 PM EST
I would do that only if I had to.
Link Posted: 2/22/2021 3:33:00 PM EST
Absolutely not
Link Posted: 2/22/2021 3:36:27 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By FlyingGorilla:


I'm sure that worked out well for people who had 10 rentals with renters who haven't paid a penny of rent with Uncle blocking evictions for the past year.
View Quote View All Quotes
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Discussion ForumsJump to Quoted PostQuote History
Originally Posted By FlyingGorilla:
Originally Posted By wakeboarder:
Pull out

Invest until real estate collapses

Become slumlord with 10 rentals

Sell to gentrifiers in 15 years  


I'm sure that worked out well for people who had 10 rentals with renters who haven't paid a penny of rent with Uncle blocking evictions for the past year.


lol

Because it was easy to predict a fake pandemic causing massive economic hardship a d severe government intrusion
Link Posted: 2/22/2021 3:43:21 PM EST
My home is paid for.  

I have zero interest in changing that statement.
Link Posted: 2/22/2021 3:43:27 PM EST
[Last Edit: 2/22/2021 3:46:27 PM EST by grey50beast]
I had this discussion with my uncle recently in regards to risk and what I should be willing to risk for my new business.  "All of it", was his answer.

A few years back, he needed $300k to put down on 3 new locations for his biz.  His wife was 100% against a reverse mortgage on his paid off house.  He talked her into it, and last year his business was bought out by a larger corp, in which they paid him a lump sum in the "a lot of" millions, and kept him on in an executive capacity.  Risky as all hell, but to the victor goes the spoils.  He said he makes more now, working for the company that bought him out, than he ever paid himself(and I'm sure he paid himself 150-200k/a year).  They paid off the house again in a lump sum, then just sold it to move into an awesome million dollar town home.

YMMV, but risk and tenacity is what will separate the middle and upper class earners IMO.
Link Posted: 2/22/2021 3:45:32 PM EST
No, I did borrow against my brokerage account to buy 35 acres. I improved it and sold it within two years.
Link Posted: 2/22/2021 3:46:04 PM EST
Originally Posted By UTex86:
Lots of threads lately about whether or not to pay a mortgage off early, but let's look at it another way.

If your home was paid off, would you pull cash out of it (assuming you could do so at a low interest rate) to invest and/or upgrade your home/property, or do anything else with the cash?
View Quote


Absolutely not. All of the sound financial advice I have heard always involves paying off debt, not creating more of it.
Link Posted: 2/22/2021 3:48:41 PM EST
Sound like a great idea.
Link Posted: 2/22/2021 3:52:06 PM EST
Not me, but my house will be paid off the same year I retire, so by that time I won't be interested in mortgage vs investing
Link Posted: 2/22/2021 3:53:12 PM EST
No.




Link Posted: 2/22/2021 3:54:21 PM EST
[Last Edit: 2/22/2021 3:54:56 PM EST by grey50beast]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By CodeSlinger:


Absolutely not. All of the sound financial advice I have heard always involves paying off debt, not creating more of it.
View Quote

lol


That's for the layman.  If you haven't already figured out that financial advice from Dave Ramsey and the likes is tuned towards the lowest common denominator, then you might be one of them.  Depending on age, there is such thing as smart debt. For instance, I could have paid for my wife's CRV with cash in the middle of 2019 for 25k. But I had perfect credit with Honda Financial from having a company car when working for Acura.  They gave me .9% financing, I put down 6k and invested the rest.  I honestly should have put nothing down, because the cash I held and invested is up 50 ish% since then.  I sold that car recently with 30k miles on it for 23.5 to Carvana, and pulled out a ton of equity.

There is smart debt. Does it include cars with high interest, credit cards, etc?  No, but if I need a 150k credit line to buy some machinery that will produce a million dollar product, then you're damn right I am going to do anything to get my hands on that.
Link Posted: 2/22/2021 3:55:59 PM EST
NOPE
Link Posted: 2/22/2021 3:56:01 PM EST
You can see who are the degenerate gamblers in this thread.
Link Posted: 2/22/2021 3:56:39 PM EST
NO, dont risk a secure asset to gamble with
Link Posted: 2/22/2021 3:58:21 PM EST
I wouldn't.  

You work too hard to gamble that on boiled denim.
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