Posted: 11/29/2010 12:35:51 PM EDT
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I just spent the past 2 years paying off debt down to the mortage only. I just learned that a
possible 40K may come my way from an employer stock deal that went better than expected. The mortage is south of 140K...my mind is reeling with sugar plumb fairies or something. I need some hive opionions to ground me and get me thinking straight please. Thanks in advance. jb |
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Quoted: pay 20K down on your mortgage and put the rest towards savings, etc...I just spent the past 2 years paying off debt down to the mortage only. I just learned that a possible 40K may come my way from an employer stock deal that went better than expected. The mortage is south of 140K...my mind is reeling with sugar plumb fairies or something. I need some hive opionions to ground me and get me thinking straight please. Thanks in advance. jb or if savings are good to go pay all 40K down on mortgage and refinance (i am with WF and I can recast without refinancing) and watch your payment go way down. You will then be able to pay more towards principle each month but you will chop away faster at getting it paid off. You wont be able to write as much interest off but who cares. now would be a superb time to refi with rates being so low. or you could go the H&B route...but i would take the former.  Just think of the fairies in your mind when you own your home outright!!!!!!!!!!!!!!!!!!!
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First, do NOT take financial advice from ARFCOM.
If you pay down your mortgage, your payment will remain the same until it's paid off. If you refinance and add cash, the payment will go down. However, I like the 3 months emergence cash and college funds (if needed) BTW: do not put money in a child's name for college. It may make them inelligable for financial aid. Oh, and buy a new TV to satisfy your itch for something new. |
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Grow a mullet, porn stache and coke nail.
Fix up the man cave. Install urinal in living room. Rent a midget for a weekend. Put 10K on one hand of Blackjack. Get a three wolf tattoo. Attend one comic convention. Speak with a financial adviser, in no particular order. |
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Quoted:
First, do NOT take financial advice from ARFCOM. If you pay down your mortgage, your payment will remain the same until it's paid off. If you refinance and add cash, the payment will go down. However, I like the 3 months emergence cash and college funds (if needed) BTW: do not put money in a child's name for college. It may make them inelligable for financial aid. Oh, and buy a new TV to satisfy your itch for something new. That's funny I have bee checking out plasmas for months. |
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Quoted:
Well, it cant pay off enough of your mortgage (IMO) so there is no point in throwing that down the rat hole. Unless you NEED (not want) something like a new/er vehicle cuz your is on the fritz id sit on it. Thats one hell of a rainy day fund. It may not wipe it out but it will change the payoff date dramatically especially if he refinances while at it. I owe $100K and by putting an extra $300/mo towards principle I can have it paid off in 11 years. It is my only debt and I want it GONE as soon as possible. I do have 6 months of bills saved up too. |
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ROTH is just another IRA with the exception that you pay the taxes NOW, not when you retire. Think your taxes will be higher or lower when you retire? Um Hm. Higher. The ROTH has a maximum yearly contribution, IIRC about $5-6K - ???
Take as much of that money and stuff it in a ROTH. Also, hate to say this but your retirement funding needs to come before your kid's college fund. CMOS |
Don't forget... while it may not reduce your payment, a $40k pay-down of the mortgage principal will substantially reduce the term of the loan... and an actual payoff might be withing your expected lifetime. 
Refinancing will reduce the monthly payment... but you also throw money down the toilet on closing expenses... and you may be tempted to extend the term of the loan. If you pay down the principal, you are not "losing" that money... only converting it into equity... which can be returned to you when you sell. (provided the market doesn't tank any further)
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I say just sit on it.
The markets are volitile, metals arent at a good entry price.....I'd sit it in money market until a good option came along. Keep it liquid and when the right opportunity knocks, answer it. If anything, perhaps real estate....some land. Nothing wrong with sitting on cash....its well under what the FDIC will insure. Could also buy bonds and put them in the safe. Maybe a T-Bill |
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Quoted: Great discussion.I have no tuition to worry about and I have about 50K invested already. Where to go for financial advice? I've known too many of those yahoos that love getting that commission more than getting you where you should be. Go to Vanguard. They are no load and don't get commissions.  http://www.vanguard.com/
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Seriously - AMT is likely to come into play. Talk to your Accountant BEFORE you do anything so you understand what you can play with or invest. 40G's isn't much in reality. If you have debt or immediate prep needs (food, fuel, survival stash) take care of it in proportion based on what you can afford. DO NOT think of this as a windfall. It's not. |
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OP, you've already got the right ideas. After you figure out the real net from that, I'd suggest:
1) Put 80-90% toward mortgage principal. Not forward payments, but the principal. Don't refinance, just enjoy the great ROI if your rate is over 5%. 2) Piss away the rest. You're responsible and you earned it. New gun, vacation, both, whatever. |
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year's worth of foodstuffs for you and everyone in your immediate family concern.
2 yrs worth of sturdy clothes. reliable used truck. more ammo. precious metals other than gold. whatever you do, don't pour it into your mortgage now. In fact the way things are shaping up, buy metals (which you'll HOLD IN YOUR HANDS / SAFE) and when hyperinflation kicks in you can convert a bit and pay your entire mortgage off for steep discount. |
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Since everyone is throwing in their 2 cents:
It depends on your mortgage rate. If it is FIXED and in LOW INTEREST, then I wouldn't pay it down a dime more than the regular payment. My priorities would be: 1) High Interest Debt / Variable Rate Debt / Short Term Debt 2) Emergency Fund - 6 Months 3) Max IRA contribution 4) Savings Goals above and beyond IRA cap 5) Pay Down Mortgage That's pretty much how my priority list goes. I'll need a pretty big pile put aside before I consider wrapping up #4 and moving on to #5. I'm not a big fan of putting a high percentage of my worth into a single asset. I'm also not a fan of spending a dollar making 8% to pay off a dollar of debt costing me 4.3%. That's just not logical. |
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Quoted: Since everyone is throwing in their 2 cents: It depends on your mortgage rate. If it is FIXED and in LOW INTEREST, then I wouldn't pay it down a dime more than the regular payment. My priorities would be: 1) High Interest Debt / Variable Rate Debt / Short Term Debt 2) Emergency Fund - 6 Months 3) Max IRA contribution 4) Savings Goals above and beyond IRA cap 5) Pay Down Mortgage That's pretty much how my priority list goes. I'll need a pretty big pile put aside before I consider wrapping up #4 and moving on to #5. I'm not a big fan of putting a high percentage of my worth into a single asset. I'm also not a fan of spending a dollar making 8% to pay off a dollar of debt costing me 4.3%. That's just not logical. You forgot the #1 before the #1. Be sure he puts enough aside to pay off any tax issues arising from this lump sum payment, provided they didn't withhold taxes out of it. Otherwise your list gets an A+. |