I can't imagine 3 years would do it. And by the way, this isn't necessarily true. They still track things like utility accounts and anything else that you give your social for. It's hard to stay away from everything a credit report tracks. What does this mean?
Over the length of the mortgage, almost certainly. My mortgage was 4 percent. Over the 15 years my investments averaged 12 percent.
Well there's an in depth analysis. I'm just curious as to what his house being an appreciating asset has to do with it, how the risk factor on his investments can pull down returns to presumably 3%-4% and with that all in mind, how he'll return enough to retire by 45.
He said he paid cash for his house so he isn't paying interest on a mortgage. He has no interest to subtract from his investment income. That, plus the house accrues in value over time. To retire at 45 you need to mot only be a smart financial planner, you need to earn gobs and gobs of money that you don't spend on upgrading your lifestyle
His house will increase in value regardless of whether he has a mortgage or not so it has nothing to do with whether or not it is prudent to have a mortgage. Like you said, to retire by 45, he has to make gobs and gobs of money but he says that it doesn't make sense to borrow at 4.5% with an interest deduction. if it doesn't make sense to borrow somewhere between a 3%-4% net of taxes cost, then how does he intend to retire by 45? I assume he has some "investments" that aren't really investments but small businesses he is growing that don't require a lot of capital but have some potential earnings upside in the future.
If it was me I would take out a low interest mortgage even if I had the money to pay cash. That would allow me to use the money to grow my business. From what I gather supafan sells collectables on eBay. That would require purchasing your inventory in bulk so as to lower the cost per unit. But he does it his way and whatever his way is must be damn good if he can retire at 45.
Another good reason for paying cash for a house if you can is the total amount you will have to pay back over 15 or 30 years. My Dad payed $25k for the house I grew up in. By the time he paid it off he had paid over $100k. I don't know how they calculate interest rates but to me that seems like 300% interest.
If your numbers are right, that's 13.19%. I would say that's a loan you want to avoid if at all possible.
