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#22
01-08-2007, 06:28 PM
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Re: Brag: Debt Free!
[ QUOTE ]
was gonna make a joke about hoe your net worth is zero but thats clearly not the case since you almost own the entire house and all the rest. [/ QUOTE ] I have a lot of liquid investments, 401K, IRA, etc. I am clearly not rich, yet, but probably in the 200k to 300k range. 
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#23
01-08-2007, 06:40 PM
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Re: Brag: Debt Free!
If you could buy bonds that are yielding x% and you can pay off your debt service at x-something%, you get to keep that extra something %.
The interest rate environment may not stay constant, either. So if you leverage up with a loan at 6% today, with a debt service constant of 6.5%, you may not be able to achieve greater than 6.5% today, but you may be able to achieve that in the future. There are some tax benefits for mortgages vs. other debt, but that only covers some of the interest expense. You could also invest in other things that have more risk and more return. Debt free does not mean optimal financial planning, though it may pay other returns in terms of peace of mind or flexibility.
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#24
01-08-2007, 07:21 PM
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Re: Brag: Debt Free!
[ QUOTE ]
If you could buy bonds that are yielding x% and you can pay off your debt service at x-something%, you get to keep that extra something %. The interest rate environment may not stay constant, either. So if you leverage up with a loan at 6% today, with a debt service constant of 6.5%, you may not be able to achieve greater than 6.5% today, but you may be able to achieve that in the future. There are some tax benefits for mortgages vs. other debt, but that only covers some of the interest expense. You could also invest in other things that have more risk and more return. Debt free does not mean optimal financial planning, though it may pay other returns in terms of peace of mind or flexibility. [/ QUOTE ] peace of mind is the nuts.
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