TPB X thread (16 Viewers)

[Stan Raymond]

I liked my cheeseburger plain. On the rare occasion we went to McDonalds we'd have to pull over and wait for my cheeseburger. My dad would get pissed off. Mom is yelling at dad for getting mad. Dad is yelling at me for being a pain in the ass. It wasn't enjoyable.

LOL, me too, same exact situation.

 

[1HuskerDad]

I liked my cheeseburger plain. On the rare occasion we went to McDonalds we'd have to pull over and wait for my cheeseburger. My dad would get pissed off. Mom is yelling at dad for getting mad. Dad is yelling at me for being a pain in the ass. It wasn't enjoyable.

Special orders didn’t upset the help at Burger King at least..😂😉

 

[Stan Raymond]

Special orders didn’t upset the help at Burger King at least..😂😉

That's why as a kid during the Grand Island trips, I'd vote for Arby's. McDonald's wasn't worth getting Dad mad.

 

[Mavsker]

No I was just using an example that spanned 30 years. It's the same concept.

If we started it at 1/1/2000 I'm behind in 2015 but I passed you a few years ago because I had 52k invested in 2015 and took advantage of the

Using the same numbers as before but changing the 13% to an average of 11% (the return from 1/1/15 to 7/1/24) As of 7/1/24 I have 195k and a loan of 27k for a net of 168k. You have 138k.

Alright
Assumptions: house never appreciates (doesn't matter because both own same asset), 2.5% return 2000-2014 (actual return), 11% return 2015-2029 (actual return for 2015-2024 YTD). Average mortgage rates were 8% in 2000, I'm using 7.5% because I'm feeling generous and we both have good credit scores.

250k mortgage at 7.5%
15-year payment: $2,318
30-year payment: $1,748
Difference: $570

Both people have $2,318 to work with every month. 15 year mortgage guy obviously puts it all towards the mortgage beginning January 1, 2000 and pays it off December 31, 2014. From January 1, 2015 through December 31, 2023 he invests all $2,318 in the market.
The 30 year mortgage guy puts $1,748 towards his mortgage every month and the remaining $570 in the market for all 30 years.

On January 1, 2015
- 15 year mortgage guy has a paid off $250k house, $0 debt, and $0 in investments (+$250,000)
- 30 year mortgage guy has $61,433 in equity and $124,330 in investments (+$185,763)

On January 1, 2030
- 15 year mortgage guy still has paid off $250k house, $0 debt, and $1,053,970 in investments ($1,303,970)
- 30 year mortgage guy now has paid off $250k house as well, $0 debt, and $901,709 in investments ($1,151,709)

I think this breaks even somewhere around a 5.5% mortgage interest rates. Your strategy obviously works better when interest rates are low. You usually win out mathematically, perhaps even 90% of the time, but not always.

 

[1HuskerDad]

 

[1HuskerDad]

 

[Jim14510]

Alright
Assumptions: house never appreciates (doesn't matter because both own same asset), 2.5% return 2000-2014 (actual return), 11% return 2015-2029 (actual return for 2015-2024 YTD). Average mortgage rates were 8% in 2000, I'm using 7.5% because I'm feeling generous and we both have good credit scores.

250k mortgage at 7.5%
15-year payment: $2,318
30-year payment: $1,748
Difference: $570

Both people have $2,318 to work with every month. 15 year mortgage guy obviously puts it all towards the mortgage beginning January 1, 2000 and pays it off December 31, 2014. From January 1, 2015 through December 31, 2023 he invests all $2,318 in the market.
The 30 year mortgage guy puts $1,748 towards his mortgage every month and the remaining $570 in the market for all 30 years.

On January 1, 2015
- 15 year mortgage guy has a paid off $250k house, $0 debt, and $0 in investments (+$250,000)
- 30 year mortgage guy has $61,433 in equity and $124,330 in investments (+$185,763)

On January 1, 2030
- 15 year mortgage guy still has paid off $250k house, $0 debt, and $1,053,970 in investments ($1,303,970)
- 30 year mortgage guy now has paid off $250k house as well, $0 debt, and $901,709 in investments ($1,151,709)

I think this breaks even somewhere around a 5.5% mortgage interest rates. Your strategy obviously works better when interest rates are low. You usually win out mathematically, perhaps even 90% of the time, but not always.

We're talking about 3.5% mortgage rates. [ bought a house in 2001 and the rate was about 6%. Regardless we were talking about 3.5% so what the rates were in 2000 are irrelevant.

 

[Papa...Football]

Only betas don’t know how to plug a tire

 

[Mavsker]

We're talking about 3.5% mortgage rates. [ bought a house in 2001 and the rate was about 6%. Regardless we were talking about 3.5% so what the rates were in 2000 are irrelevant.

OK well idk why we were talking about 3.5%. Maybe I mentioned it, don't remember. But you couldn't get 3.5% in 2000 and you can't get it now. It's obviously not irrelevant to a discussion about mortgages in the year 2000 to use the average mortgage rate in the year 2000.

 

[Huskerforlife]

 

[Huskerforlife]

 

[MtnHusker]

 

[MtnHusker]

 

[1HuskerDad]

 

[1HuskerDad]

 

[1HuskerDad]

 

[1HuskerDad]

 

[MtnHusker]

 

[MtnHusker]

 

[Jim14510]

OK well idk why we were talking about 3.5%. Maybe I mentioned it, don't remember. But you couldn't get 3.5% in 2000 and you can't get it now. It's obviously not irrelevant to a discussion about mortgages in the year 2000 to use the average mortgage rate in the year 2000.

It's not relevant to use the mortgage rates from 2000 when the argument started because I said if the interest rates are 3.5% you shouldn't be paying extra and investing that money.

You are correct that if the interest rates are 7% or higher you shouldn't try to beat that rate with investing.

The only relevance of 2000 was it was one of the worst 15 year returns in history when we're trying to find a period where investing couldn't beat 3.5% over 30 years.