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[MtnHusker]

 

[1HuskerDad]

 

[1HuskerDad]

 

[1HuskerDad]

 

[1HuskerDad]

 

[1HuskerDad]

 

[Jim14510]

No, at 15 years you don't automatically win. That's nonsense.

A person taking your advice in January 2000 averages a 2.5% return over the next 15 years. So you've made 2.5% while the person paying off debt made 3.5%. Now he gets to invest 50% more in a market making 11% the next 10 years. You win if there's not those economic downturns that happen with some regularity.

You can check my math/assumptions.

Buy a house with a loan of 100k 12/1/93.

I do a 30 year loan at 3.5%. My payment is $449.

You do a 15 year loan at 3%. Your payment is $691.

So I'm investing $242 per month for 30 years. You're investing nothing for 15 years and then $691 per month for 15 years.

Your example was 12/1/00-12/1/15. S&P 500 return was 2.3%. Obviously 2030 isn't here yet so instead going backward from 12/1/23. 12/1/93-12/1/08 return was 3%. 12/1/08-12/1/23 13%.

So again I invest $242 every month for 30 years. Average return is 3% for the first 15 and 13% for the next 15. At 12/1/23 my house is paid off and I have 517k in investments.

You pay on your house for the first 15 years and start investing $691 per month. At 30 years you have 384k.

Yes at the 15 year mark you have your house paid off. I have a balance on my loan of 63k and investments of 55k so I am temporarily behind you. But I have 55k already invested when the market turns.

Over a 30 year loan I am going to win. I risk having periods of time in the middle that I'm slightly behind but it's not far. Not when rates are that low. I will leverage every bit of the house at 3.5% assuming I'm not retirement age. I don't care about having debt during retirement but I'm not taking additional debt at that point even if it does make sense.

Granted I'm doing something more fun than invest it in the market. Trying to flip houses and eventually vacation homes but this is all for arguments sake.

2.3% return for the first 15 changes the 15 year mark by a couple thousand and 30 year mark by about 10k. Still well over your measly 384k. I'm sure there's a 30 year example that's closer but I can't see losing.

 

[1HuskerDad]

 

[1HuskerDad]

 

[Red Finger]

 

[1HuskerDad]

 

[Mavsker]

You can check my math/assumptions.

Buy a house with a loan of 100k 12/1/93.

I do a 30 year loan at 3.5%. My payment is $449.

You do a 15 year loan at 3%. Your payment is $691.

So I'm investing $242 per month for 30 years. You're investing nothing for 15 years and then $691 per month for 15 years.

Your example was 12/1/00-12/1/15. S&P 500 return was 2.3%. Obviously 2030 isn't here yet so instead going backward from 12/1/23. 12/1/93-12/1/08 return was 3%. 12/1/08-12/1/23 13%.

So again I invest $242 every month for 30 years. Average return is 3% for the first 15 and 13% for the next 15. At 12/1/23 my house is paid off and I have 517k in investments.

You pay on your house for the first 15 years and start investing $691 per month. At 30 years you have 384k.

Yes at the 15 year mark you have your house paid off. I have a balance on my loan of 63k and investments of 55k so I am temporarily behind you. But I have 55k already invested when the market turns.

Over a 30 year loan I am going to win. I risk having periods of time in the middle that I'm slightly behind but it's not far. Not when rates are that low. I will leverage every bit of the house at 3.5% assuming I'm not retirement age. I don't care about having debt during retirement but I'm not taking additional debt at that point even if it does make sense.

Granted I'm doing something more fun than invest it in the market. Trying to flip houses and eventually vacation homes but this is all for arguments sake.

2.3% return for the first 15 changes the 15 year mark by a couple thousand and 30 year mark by about 10k. Still well over your measly 384k. I'm sure there's a 30 year example that's closer but I can't see losing.

Yeah if you bump it back to 1993 you win. My point is, starting at 2000, you can't win. You've already lost.

 

[1HuskerDad]

 

[MtnHusker]

 

[MtnHusker]

 

[MtnHusker]

 

[MtnHusker]

 

[MtnHusker]

 

[MtnHusker]

 

[MtnHusker]