FEHB Premiums Increase 13.5%

Status
Not open for further replies.
PooseMaGoose said:
If you buy a 500k house with 0% down vs the traditional down payment, you will pay approximately 250k more over the life of the loan in interest payments.. yes it’s possible to outperform your interest rate, but that doesn’t take into consideration risk. Nothing financial is guaranteed.

Fact: financing a higher amount means you pay significantly more over the life of the loan.

Fact: there is no guarantee that you will outperform your interest rate and in reality, most people wouldnt even be investing the 100k they keep on a no down payment mortgage loan.

Going into debt to make money is the dumbest shit that younger people have been sold on.. mind you the people selling you on it are the ones profiting off of your debt. The problem is everyone has an opinion on making money (including broke people) but taking advice from broke people is like taking advice on weight loss from your fat fuck cousin.
Click to expand...
You realize some people don't pay cash for a house because they will make more from that cash in the stock market? If my mortgage rate is 4% over 30 years and average stock market return over 30 is 10% what do you think is the better place for your cash?
 
VikingsFan85 said:
You realize some people don't pay cash for a house because they will make more from that cash in the stock market? If my mortgage rate is 4% over 30 years and average stock market return over 30 is 10% what do you think is the better place for your cash?
Click to expand...
i dont think you understand
 
VikingsFan85 said:
You realize some people don't pay cash for a house because they will make more from that cash in the stock market? If my mortgage rate is 4% over 30 years and average stock market return over 30 is 10% what do you think is the better place for your cash?
Click to expand...
That and the gains on your (presumably S&P500 index fund) are compounding while the interest on the note is simple.
 
VikingsFan85 said:
You realize some people don't pay cash for a house because they will make more from that cash in the stock market? If my mortgage rate is 4% over 30 years and average stock market return over 30 is 10% what do you think is the better place for your cash?
Click to expand...

You guys aren’t reading. I’ll say it again… yes on paper, it can make sense but what none of you are considering is risk. When you calculate risk into the equation, that spread virtually disappears.

If you go into debt, you are guaranteed to pay significantly more than the value of the asset over the life of the loan. You are never guaranteed to outperform the interest rate. If this was so simple and straightforward, everybody who was in debt would have high net worths. Turns out, to the average person, debt is suffocating.
 
PooseMaGoose said:
You guys aren’t reading. I’ll say it again… yes on paper, it can make sense but what none of you are considering is risk. When you calculate risk into the equation, that spread virtually disappears.

If you go into debt, you are guaranteed to pay significantly more than the value of the asset over the life of the loan. You are never guaranteed to outperform the interest rate. If this was so simple and straightforward, everybody who was in debt would have high net worths. Turns out, to the average person, debt is suffocating.
Click to expand...
By that logic renting is the superior investment
 
VikingsFan85 said:
By that logic renting is the superior investment
Click to expand...

Mmm no. Not what I’m getting at. All I’m saying is people who say “debt is good” and “debt is an investment” are generally not financially successful. Those sentiments sound good on paper, but in practice it’s different.

All I know is that not having debt on your shoulders allows you to stand taller. Knowing no matter how bad things get, a bank can’t come along and take your shit is a great feeling.

You do your thing though because I’m sure having debt hanging over your head is worth the few points you’ll theoretically make while watching the unpredictable market move because you’ve subscribed to a strategy where you not only want it to perform, but you NEED it to.

AB19 said:
Average Dave Ramsey follower
Click to expand...

Average American drowning in debt payments.
 
PooseMaGoose said:
Mmm no. Not what I’m getting at. All I’m saying is people who say “debt is good” and “debt is an investment” are generally not financially successful. Those sentiments sound good on paper, but in practice it’s different.

All I know is that not having debt on your shoulders allows you to stand taller. Knowing no matter how bad things get, a bank can’t come along and take your shit is a great feeling.

You do your thing though because I’m sure having debt hanging over your head is worth the few points you’ll theoretically make while watching the unpredictable market move because you’ve subscribed to a strategy where you not only want it to perform, but you NEED it to.
Click to expand...
There is no scenario where a VA loan is worse than a conventional.
 
PooseMaGoose said:
Fact: there is no guarantee that you will outperform your interest rate and in reality, most people wouldnt even be investing the 100k they keep on a no down payment mortgage loan.

Going into debt to make money is the dumbest shit that younger people have been sold on.. mind you the people selling you on it are the ones profiting off of your debt. The problem is everyone has an opinion on making money (including broke people) but taking advice from broke people is like taking advice on weight loss from your fat fuck cousin.
Click to expand...

You can argue behavior all day. Most people who are in debt aren't better off with the debt. But also, most people aren't in debt because they were 'sold on doing it to make money'.

Now obviously we're in a different position today than we were 5 years ago with interest rates, so I'm not about to say everybody should be investing in the market instead of paying down/off their home.

BUT: when the discussion is about long term investing (a-la index funds/TSP), the near universal consensus is that you'll get somewhere in the realm of 8-12% return. So when you have a 3-4% interest rate, mathematically speaking, you are nearly certain to outperform your mortgage interest by investing.

And since yeah, the discussion is basically Dave Ramsey.... Dave always talked about 10-12% returns like it was gospel. It was only when people called to ask about keeping their 3-4% mortgages that he would suddenly be interested in "risk".

As for me, I've always been Davish in all the wrong ways--- shouldn't have paid off the home, should've cut up the credit cards.
 
ATCJoe85 said:
You can argue behavior all day. Most people who are in debt aren't better off with the debt. But also, most people aren't in debt because they were 'sold on doing it to make money'.

Now obviously we're in a different position today than we were 5 years ago with interest rates, so I'm not about to say everybody should be investing in the market instead of paying down/off their home.

BUT: when the discussion is about long term investing (a-la index funds/TSP), the near universal consensus is that you'll get somewhere in the realm of 8-12% return. So when you have a 3-4% interest rate, mathematically speaking, you are nearly certain to outperform your mortgage interest by investing.

And since yeah, the discussion is basically Dave Ramsey.... Dave always talked about 10-12% returns like it was gospel. It was only when people called to ask about keeping their 3-4% mortgages that he would suddenly be interested in "risk".

As for me, I've always been Davish in all the wrong ways--- shouldn't have paid off the home, should've cut up the credit cards.
Click to expand...
I mean this also assumes that the person that puts zero down with a VA loan puts the 20% in the market and doesn't use it to just spend. I don't know that the majority of people would put it in the market but maybe I'm wrong.

If you do invest then you'll almost definitely put earn your interest though.

VikingsFan85 said:
There is no scenario where a VA loan is worse than a conventional.
Click to expand...
Also a VA loan can be worse in a competitive market where you are likely to lose out to other offers because you're using a VA loan. It happened all the time when the market was going crazy. In general though it is a great tool
 
Gauff said:
I mean this also assumes that the person that puts zero down with a VA loan puts the 20% in the market and doesn't use it to just spend. I don't know that the majority of people would put it in the market but maybe I'm wrong.

If you do invest then you'll almost definitely put earn your interest though.
Click to expand...
Like I said, you can argue behavior all day. What the majority of people will do isn't as meaningful to me as what the majority of people with intention will do.

So sure, most people won't invest the money, because they didn't set out with that intention in mind anyways.

But will most people who make the decision with the intent to invest the difference follow through?
 
PooseMaGoose said:
Mmm no. Not what I’m getting at. All I’m saying is people who say “debt is good” and “debt is an investment” are generally not financially successful. Those sentiments sound good on paper, but in practice it’s different.

All I know is that not having debt on your shoulders allows you to stand taller. Knowing no matter how bad things get, a bank can’t come along and take your shit is a great feeling.

You do your thing though because I’m sure having debt hanging over your head is worth the few points you’ll theoretically make while watching the unpredictable market move because you’ve subscribed to a strategy where you not only want it to perform, but you NEED it to.
Click to expand...
Not all debt is equal. Credit card debt is a special kind of stupid. Car loans are consistent with your position. Mortgages are a different animal.
 
KP-ATC said:
Not all debt is equal. Credit card debt is a special kind of stupid. Car loans are consistent with your position. Mortgages are a different animal.
Click to expand...

I totally agree with that. I’m just personally of the view that not having debt is an amazing feeling. Anybody I’ve ever talked to who has had the pleasure of paying their mortgage off early just describes a freedom they didn’t know they would feel.

What’s worth more to each individual? The few points you may or may not gain on the market, or the feeling of knowing things are truly yours and nobody has their hand out for what’s owed?

I guess we can all chalk it up to personal preference. I choose debt free and less risk.
 
PooseMaGoose said:
Average American drowning in debt payments.
Click to expand...
The average American doesn't have $100k to play the invest vs down payment game. That's what you're missing. These people were poor before and they're now poor and in debt.

They never had the $100k in cash to invest in the first place.

You have six figures in liquid assets for a down payment and you're already much better off than most.

Debt doesn't give you wealth but people who ARE wealthy can leverage debt to make more wealth.
 
Status
Not open for further replies.

Similar threads

T
What do you want to see in the next contract and beyond?
9 10 11
Replies
218
Views
19K
Mike Kilo
Mike Kilo
S
NEW Unpaid Wages/Overtime Lawsuit - Taddeo v. United States
Replies
5
Views
4K
Papacharlie327
P
Z
Scott AFB 2152 Vacancy
2
Replies
24
Views
6K
CharlieBravo
CharlieBravo
GulfCharlie
Job Listing ST-11636079-22-LG (NAS Key West) Repost
2
Replies
20
Views
3K
GulfCharlie
GulfCharlie
Back
Top Bottom