Let's say I've got 150k cash that I want to park, long-term, no plan to access within a few years. But I want "no risk", so we're not talking stocks or bonds. Can I do better than 1.15% interest bank account?
And don't tell me gold or silver or whatever? That's an investment and it can do down. I realize the dollar can devalue, etc. I'm not talking about that. I'm just saying where can I earn the most interest without risk to principal?
To remove first post, remove entire topic.
Let's say I've got 150k cash that I want to park, long-term, no plan to access within a few years. But I want "no risk", so we're not talking stocks or bonds. Can I do better than 1.15% interest bank account?
And don't tell me gold or silver or whatever? That's an investment and it can do down. I realize the dollar can devalue, etc. I'm not talking about that. I'm just saying where can I earn the most interest without risk to principal?
there's no such thing as a riskless investment. Supposedly, treasuries would have the best yield, but i think even those of you that won't admit to what is going on in the real world, know that the currency will devalue faster then those piddly returns
you were just talking about refinancing a mortgage. 4% money you are renting from the bank to pay for your primary residence
why not just knock 150k off the principal of your 4+% loan?????
i mean, i know some people are duped by the MID, but get friggin real, you are looking to get 1.25% ROI on some cash, while looking to borrow money to rent a house from the bank/gov complex, at250% the cost
it's no wonder, we find ourselves where we are today
there's no such thing as a riskless investment. Supposedly, treasuries would have the best yield, but i think even those of you that won't admit to what is going on in the real world, know that the currency will devalue faster then those piddly returns
you were just talking about refinancing a mortgage. 4% money you are renting from the bank to pay for your primary residence
why not just knock 150k off the principal of your 4+% loan?????
i mean, i know some people are duped by the MID, but get friggin real, you are looking to get 1.25% ROI on some cash, while looking to borrow money to rent a house from the bank/gov complex, at250% the cost
it's no wonder, we find ourselves where we are today
be easy, I don't agree with your analysis and here's why...
First, it's 3.375% (not 4%) and then if you consider the tax benefits it's effectively more like around 2.5%. And I don't want to have a paid off mortgage and $0 in the bank. It's good to have that flexibility with cash. Moreover, while you maybe can't earn risk free better than 1.25% interest today, that doesn't mean that will remain the case over the next 15 years -- e.g. 2, 5 or 10 years from now. Just a few years ago checking accounts were paying 5%. With inflation, I think that's pretty likely to happen again and probably more. If I pay off the mortgage, then poof, that cash is gone, interest rates go back up and if I find myself in a bind I'm screwed or I have to borrow at much much higher rates, or maybe can't borrow at all.
So in all, considering that things change both in terms of the economy and personally, I'd rather have a 15-year 150k mortgage @ 3.375% with $150k in the bank as opposed no mortgage and no money in the bank.
I think your analysis is flawed and doesn't account for important issues.
be easy, I don't agree with your analysis and here's why...
First, it's 3.375% (not 4%) and then if you consider the tax benefits it's effectively more like around 2.5%. And I don't want to have a paid off mortgage and $0 in the bank. It's good to have that flexibility with cash. Moreover, while you maybe can't earn risk free better than 1.25% interest today, that doesn't mean that will remain the case over the next 15 years -- e.g. 2, 5 or 10 years from now. Just a few years ago checking accounts were paying 5%. With inflation, I think that's pretty likely to happen again and probably more. If I pay off the mortgage, then poof, that cash is gone, interest rates go back up and if I find myself in a bind I'm screwed or I have to borrow at much much higher rates, or maybe can't borrow at all.
So in all, considering that things change both in terms of the economy and personally, I'd rather have a 15-year 150k mortgage @ 3.375% with $150k in the bank as opposed no mortgage and no money in the bank.
I think your analysis is flawed and doesn't account for important issues.
You say, ""most interest without risk to principal"" ?? You already know the answer to this.. CDs, Money Market, etc. Enjoy the puny returns.
You gotta be able to take some risk, Depeche. The question is how much are you comfortable with. Lots of people are overlooking quality blue chip stocks that are paying a solid dividend. Get paid while you wait.
AT&T, Unilever, etc. People use what these companies sell in good times and bad.
There's no magic bullet, here.
You say, ""most interest without risk to principal"" ?? You already know the answer to this.. CDs, Money Market, etc. Enjoy the puny returns.
You gotta be able to take some risk, Depeche. The question is how much are you comfortable with. Lots of people are overlooking quality blue chip stocks that are paying a solid dividend. Get paid while you wait.
AT&T, Unilever, etc. People use what these companies sell in good times and bad.
be easy, I don't agree with your analysis and here's why...
First, it's 3.375% (not 4%) and then if you consider the tax benefits it's effectively more like around 2.5%. And I don't want to have a paid off mortgage and $0 in the bank. It's good to have that flexibility with cash. Moreover, while you maybe can't earn risk free better than 1.25% interest today, that doesn't mean that will remain the case over the next 15 years -- e.g. 2, 5 or 10 years from now. Just a few years ago checking accounts were paying 5%. With inflation, I think that's pretty likely to happen again and probably more. If I pay off the mortgage, then poof, that cash is gone, interest rates go back up and if I find myself in a bind I'm screwed or I have to borrow at much much higher rates, or maybe can't borrow at all.
So in all, considering that things change both in terms of the economy and personally, I'd rather have a 15-year 150k mortgage @ 3.375% with $150k in the bank as opposed no mortgage and no money in the bank.
I think your analysis is flawed and doesn't account for important issues.
You are the one who started this thread - so don't bash the ideas that come from it... that's kinda rude. Why would you pay a bank interest if you have the money to pay off the note. Obviously you don't - but just for fun. The tax advantages are not 1% off if you pay mortgage interest. IF you PAY interest, then you lose your capital!!
Are you really that stupid? That's like saying you should buy something because it's "tax deductible". That's freakin stupid. You STILL HAVE TO SPEND THE MONEY!!!!!!!!
Quote Originally Posted by depeche2:
be easy, I don't agree with your analysis and here's why...
First, it's 3.375% (not 4%) and then if you consider the tax benefits it's effectively more like around 2.5%. And I don't want to have a paid off mortgage and $0 in the bank. It's good to have that flexibility with cash. Moreover, while you maybe can't earn risk free better than 1.25% interest today, that doesn't mean that will remain the case over the next 15 years -- e.g. 2, 5 or 10 years from now. Just a few years ago checking accounts were paying 5%. With inflation, I think that's pretty likely to happen again and probably more. If I pay off the mortgage, then poof, that cash is gone, interest rates go back up and if I find myself in a bind I'm screwed or I have to borrow at much much higher rates, or maybe can't borrow at all.
So in all, considering that things change both in terms of the economy and personally, I'd rather have a 15-year 150k mortgage @ 3.375% with $150k in the bank as opposed no mortgage and no money in the bank.
I think your analysis is flawed and doesn't account for important issues.
You are the one who started this thread - so don't bash the ideas that come from it... that's kinda rude. Why would you pay a bank interest if you have the money to pay off the note. Obviously you don't - but just for fun. The tax advantages are not 1% off if you pay mortgage interest. IF you PAY interest, then you lose your capital!!
Are you really that stupid? That's like saying you should buy something because it's "tax deductible". That's freakin stupid. You STILL HAVE TO SPEND THE MONEY!!!!!!!!
You are the one who started this thread - so don't bash the ideas that come from it... that's kinda rude. Why would you pay a bank interest if you have the money to pay off the note. Obviously you don't - but just for fun. The tax advantages are not 1% off if you pay mortgage interest. IF you PAY interest, then you lose your capital!!
Are you really that stupid? That's like saying you should buy something because it's "tax deductible". That's freakin stupid. You STILL HAVE TO SPEND THE MONEY!!!!!!!!
You really don't get it? Really? What if I believe in 2 years that rates are going to shoot higher and I'll be able to earn 6% on my cash (and will no longer be able to borrow at 3.375%)? If I've drained all my cash by paying off the 3.375% note then I can't get that, can I? That's just one possible reason. I mean, do you think that everyone who has an outstanding loan should use every last dollar in their account every month toward paying off the note? There are many good reasons to hold cash, especially when the loan is 3.375% and tax deductible.
Then there is what if I pay off the note with all my cash and I lose my job the next day. Then I'm broke and since I've got no job I can't borrow. Oops. If I had kept the cash I'd have an emergency fund to last for years while trying to get back on my feet.
Quote Originally Posted by DAWGPRINT:
You are the one who started this thread - so don't bash the ideas that come from it... that's kinda rude. Why would you pay a bank interest if you have the money to pay off the note. Obviously you don't - but just for fun. The tax advantages are not 1% off if you pay mortgage interest. IF you PAY interest, then you lose your capital!!
Are you really that stupid? That's like saying you should buy something because it's "tax deductible". That's freakin stupid. You STILL HAVE TO SPEND THE MONEY!!!!!!!!
You really don't get it? Really? What if I believe in 2 years that rates are going to shoot higher and I'll be able to earn 6% on my cash (and will no longer be able to borrow at 3.375%)? If I've drained all my cash by paying off the 3.375% note then I can't get that, can I? That's just one possible reason. I mean, do you think that everyone who has an outstanding loan should use every last dollar in their account every month toward paying off the note? There are many good reasons to hold cash, especially when the loan is 3.375% and tax deductible.
Then there is what if I pay off the note with all my cash and I lose my job the next day. Then I'm broke and since I've got no job I can't borrow. Oops. If I had kept the cash I'd have an emergency fund to last for years while trying to get back on my feet.
This question was asked to make sure you didn't miss anything like 1.25% at another institution other than yours? As in shopping for a better rate at some regional or local bank in Nowhere, Idaho?
This question was asked to make sure you didn't miss anything like 1.25% at another institution other than yours? As in shopping for a better rate at some regional or local bank in Nowhere, Idaho?
Or looking for another play thats almost zero risk? Or your requirements are zero risk period? You need FDIC to back your money up if your bank goes south?
Or looking for another play thats almost zero risk? Or your requirements are zero risk period? You need FDIC to back your money up if your bank goes south?
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