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Sheri257

Sheri257

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  1. Low interest rates were supposed to help people afford homes. Instead, they just used the lower interest rates to bid up prices so ... there really was no savings at all. And with no accompanying increase in income ... that's how we ended up with the diaster we have now. Prices are now down 20 percent in my area, even 40 percent in some cases. Oh well ... at least people who didn't go nuts overpaying and borrowing will be able to buy homes now.
  2. Yeah ... I'm in the same boat, sort of. We're not splitting up but, hubby wants to move. So yeah ... we're going to be looking for great foreclosure deals but, our house won't be worth that much when we sell it. Luckily we bought our house dirt cheap so we should be able to make a decent profit on it but, no where near what we could have made a couple of years ago.
  3. Why pay less up front? Because it ALL depends on the interest rate ... it's actually NOT an advantage under certain circumstances ... and, in fact, can be quite a disadvantage. Perhaps your banker father would agree. Since I got 2.9 percent financing on my Tundra it makes absolutely no sense to make a big down payment because that's probably the cheapest interest you can find. Why pay down $5,000 on a 2.9 percent deal since that would only save you $145 a year on interest? For one thing, it would only save you $725 on a five year car loan ... not much. For example, it would be much better to take that $5K and pay down a 6 percent 30 year mortgage instead. That would save you $9,000 over the life of the loan ... a lot more than just $725. Or, even better ... take the $7K you would have to make before taxes to actually bank $5K after tax, and put it in the retirement account instead. Not only would you be able to defer $2K in taxes but you can take that tax money plus the $5K and make 10 percent on that ... The numbers look phenomenal here ... after 20 years you'd bank about $30K after tax ... all with just an initial $7K investment. $30K more for retirement is hellava lot better than just saving $725 on car loan interest.
  4. True but, even if the rate of return is a relatively low seven percent ... you could still come out ahead Because you'd at least be earning 7 percent on tax money that would otherwise go to the government. If 30-40 percent of your income is going to taxes, 7 percent of that 30-40 percent could really add up over 20 years, especially if it's compounded. When you pay down a mortgage, you have to pay taxes first which basically ends up being a 30-40 percent fee before you get the cash to pay it down. Sure, you save money on the mortgage interest but, if you have a low interest rate to begin with then, it may not be that much of a savings. And ... even though the mortgage interest deduction isn't what it used to be ... there still are some tax benefits that reduce the overall "real" interest rate even further like the deductibility of property taxes. For example, my "real" interest rate drops down to 4 percent or so when I factor in the total tax benefit. As far as fees, I definitely see your point. I have three tax deferred plans with my employer and I'm currently trying out all of them with small amounts just to see how it all breaks down before I put major money into any of them. One of them is our pension fund that invests your money at reduced fees compared with the Wall Street firms and ... our pension fund also tends to do better than a lot of the Wall Street funds so I'm hoping that will also make a difference in the rate of return.
  5. I'd be interested in everyone's thoughts on this question ... I agree that the home interest deduction isn't what it used to be. Especially since the standard deduction is so high now, especially if you're married ... it can pretty much wipe out most of the tax advantages of mortgage interest. But there's another tax situation to consider ... Because I just got out of school, we're carrying a little more debt than I would like ... but none of our debt is that expensive ... our highest interest rate is five percent. I do want to pay more of it down but, we're also in a much higher tax bracket now with nearly 40 percent of our income going to taxes so ... I'm thinking it might be better to put more money in the retirement accounts rather than paying off more of what is, essentially, cheap debt. Just as an example ... If you take $5K and use that to pay down five percent debt, that only saves you $250 a year. But if you put that $5K into a retirement account, that saves you (at least in my case) $2000 a year in taxes ... Plus, you can invest that money and hopefully get at least a five percent rate of return or better ... essentially getting the interest you're paying on the debt back and, hopefully, then some ... especially as the money compounds over 20 years. Sure ... you've got to pay taxes when you take the money out in 20 years but, it certainly seems like you would come out more ahead with the retirement account. Especially if you end up getting a 10-20 percent rate of return on that money over 20 years. Or ... am I missing something.
  6. Yeah ... you really do need a major vehicle for mountain snow driving ... definitely. If I lived in Europe where everybody drives small cars and the odds would be more even in a crash then ... I'd be happy to drive a small car. But, the fact is, I just can't take any chances with the nut job drivers on California freeways. Especially big rig truck drivers.
  7. Well ... I didn't put any money down on my new Toyota Tundra because they didn't require it and were offering 2.9 percent interest at the time so ... I'm probably going to put my spare cash in retirement accounts instead. The tax savings far exceeds any interest I'd save by paying off the truck early (see post below).
  8. I recently bought a gas guzzler ... intentionally ... because I'm sick of getting rear ended by idiots on the road. It completely changed my perspective on small cars. The ONLY reason I survived those accidents, especially when I was hit by a big rig ... was because I was driving an SUV. My new Toyota Tundra gets about 18 miles per gallon which isn't too bad considering the size of the truck ... Yes ... I would love to save on gas but, I'd rather be alive the next time some idiot decides to hit my car. Saving money isn't going to do me much good if I'm dead. This time, I got side air bags in addition to the regular bags in case I get T boned also.
  9. Actually ... I hope you're right. I'm ready for a good crash so I can start making some money again ... It was great when stocks like Corning got down to a dollar a share. Minimal downside when a stock gets that cheap ... and great upside at 20+ dollars a share.
  10. Well ... now the market's only up 100 points or so ... The Fed did the same thing back in 2001 when the market started going down yet, it still took six years for the market to get back to its previous levels ... even with lots of liquidity and low interest rates so ... There's only so much the Fed can do, even when they try to bail out the markets. I guess we'll see if this is just a correction or a real crash. If it's a real (albeit controlled) bear market with a 30 percent or more drop over the next year or two, then I'll start buying stocks again. It's funny because I had a gut feeling this was coming ... especially when I heard people bragging about how they were going to become millionaires in the stock market. When there's too much euphoria, it seems like some kind of correction is inevitable. Personally, I like to get in near the bottom when everybody is really pessimistic and says everything is horrible ... that's actually when you pick up the best bargains and make the most money. I'll probably invest in some real estate too but, right now ... it's too soon. I don't think we're anywhere near the bottom yet in either the stock or real estate market. Usually it takes at least a couple of years for the whole thing to shake out.
  11. Excuse my rant but ... anybody could have seen this coming. It never ceases to amaze me how people make the same mistakes, over and over again. I suffered through the real estate crash of '92 so, when I bought my house four years ago ... I learned from my previous mistakes. I bought a cheap house that we could afford on one income if necessary, nothing fancy ... and I locked in a fixed interest rate because I had been burned by adjustables before. But I couldn't believe the number of people who told me I was crazy ... what was really amazing was people who were burned by the '92 crash like I was were still buying into the hype. Buy more house, they said, you can afford it ... get an adjustable rate mortgage ... you'll lose money with the supposedly higher fixed interest rate. They were getting mortgages that ate up 50 percent of their income ... crazy. And, of course, their adjustable interest rates are now going through the roof. I also can't believe the banks were making these loans ... like duh ... this crash was inevitable. What were they thinking? I guess they weren't thinking at all ... History repeats itself ... over and over again.
  12. Sheri257

    Nurses show your personality, what kind of car do you drive?

    I just got a brand new Toyota Tundra with the works ... Blue Tooth technology so I can talk on the cell with no phone or head set ... GPS ... four disc CD player, satellite radio, MP3 player hook up, precise temp control, etc. But I'm not sure it totally reflects my personality ... I really got it for safety. Sure, I'd love to save on gas but, I do have a long commute (hence all the entertainment devices) and with all of the lunatic drivers out there ... especially big rig truck drivers ... anything else wouldn't be safe, IMHO. My Tundra also has side air bags just in case one of those big rigs T bones me. I just can't drive one of those tiny cars that I see squashed on the freeway every time there's a bad accident. I figured what I'd save in gas money wouldn't matter much if I ended up dead. :typing
  13. Sheri257

    Alec Baldwin rant to 11 y/o daughter

    As celebrities, they probably do believe the world revolves around them.
  14. Sheri257

    My Dog Is Sick from the Pet Food Recall !!!

    oops, double post.
  15. Sheri257

    My Dog Is Sick from the Pet Food Recall !!!

    Yeah ... for my four remaining dogs the insurance would probably cost $4-5K a year but, for us, that wouldn't be much of a cost savings. And there are so many exceptions in the policies ... like congenital conditions which cost a lot with one of my dogs a couple of years ago. Every time we've looked at it ... it didn't seem to be worth it. :typing
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