Comments on: How I Lost A Fortune Getting Out of Debt

By: J. Money

J. Money — Thu, 19 Apr 2012 17:42:21 +0000

Awesome, thanks for the follow up man :) Funny where conversations can take you sometimes, eh? Hope you guys are well!

By: Todd Tresidder

Todd Tresidder — Wed, 18 Apr 2012 16:06:25 +0000

Follow Up To This Post: I wrote this post based on a conversation J.Money and I had. It was designed to be fun and get people thinking differently about paying off their mortgage. However, the comments caused me to realize I needed to provide a serious guide to really help people sort these complex issues and balance all the misinformation and half-baked reasoning. Here is the definitive guide follow-up post to paying off your mortgage or investing (for anyone interested)…

http://financialmentor.com/financial-advice/pay-off-mortgage-early-or-invest/7478

Thanks J for helping me see the need to produce this guide. Hope you like it!

By: J. Money

J. Money — Fri, 06 Jan 2012 23:02:34 +0000

Glad you liked it :) Have a great weekend!

By: Louise

Louise — Fri, 06 Jan 2012 21:35:01 +0000

I love this entry and reposted to my blog… There is always the “devil’s advocate” approach where you can counter that those high yielding investments were (in the majority of American’s cases) going to tank and that at the end of the daythe security of the house would have brought peace in a time of true stress!

By: J. Money

J. Money — Tue, 27 Dec 2011 17:31:31 +0000

Thanks again for guest posting while I was away, Todd! Loved the convos it sparked :) Even if they all weren’t 100% favorable, haha… that’s the beauty of personal finance though, eh? We all have our own opinions and ways of doing things. I think what I loved most about this though was that it was a complete different way of thinking of things – which is great to remind ourselves that not everything is black and white sometimes.

So thanks so much for sharing your story with us! Hope you had a blessed holiday my man, and let’s catch up soon :)

By: Todd Tresidder

Todd Tresidder — Sun, 25 Dec 2011 06:20:15 +0000

B Johnson – I couldn’t have said it better myself… Thanks for the insightful comment.

The story is like a parable. It illustrates a point. That is all.

Don’t assume conventional thinking is correct. There are many dimensions to most financial decisions – even when they appear obviously true. There are tradeoffs that must be considered.

This story acts like a mirror where we can see our stuff in it. If you land with both feet inflexibly on one side of the fence then that is your stuff. You are seeing your issues head-on.

For example, when commenters lampoon me with personal attacks for sharing my story then that is their stuff. When they can’t see past getting out of debt to see where it might be advantageous to carry long term mortgage debt in certain situations then that is their stuff.

There is no universal truth. The future cannot be predicted. I certainly got it wrong, so be careful what you assume to be true. That was the mistake I made.

After all, if paying off your mortgage and getting debt free isn’t a universal truth then what about all the other assumptions you hold true in your mind? Buy and hold, asset allocation, or maybe even the value of financial freedom?? These subjects are multi-faceted and deeply fascinating.

Things aren’t always as they appear…

By: guest

guest — Sat, 24 Dec 2011 21:32:41 +0000

At least no one can take away your home now since it’s paid off. Honestly I would have paid off the home too. You have the rest of your life now to make investments and save for retirement. It’s really not that huge of a problem. Dave Ramsey says to pay off your mortgage and I agree with him. You need a place to live after all.

I wouldn’t want to rent for the rest of my life, I do that now and I hate renting. Honestly I don’t see how this was a problem or mistake at all. Its not as if the market won’t double again in your life. There are trade-offs for everything you do in life, what’s wrong with that?

IMO it was not a mistake paying off the house. So you made a trade off. That’s how life works. It’s the grown up world we live in. Personally I think it was a great thing, but if you don’t think it was, you can sell it, rent or buy a 90,000 dollar house and put the rest of the money back into the stock market.

If there’s anything I learned from the great recession is that if you have a mortgage, then the bank could come in anytime and take it away from you if you hit hard times. So I’m on the Dave Ramsey camp of paying off your debt including your mortgage. I mean seriously you have the rest of your life to invest.

If I were you I would be happy that I had a paid off home and I had the rest of my life to invest and win in the stock market.

By: Romeo

Romeo — Sat, 24 Dec 2011 18:53:10 +0000

I’m with you, Todd, though I’d rather keep my money liquid and pay my home in full once the mortgage balance is saved, as opposed to putting $2000 towards a mortgage every month.

By: J Thompson

J Thompson — Sat, 24 Dec 2011 14:30:08 +0000

Everyone knows that you should pay off your highest interest debt first, but then the next thing to consider is whether you can save at a higher rate than your highest interest debt. So other than credit card debt, it’s almost always more worth it to invest rather than to make prepayments on debt. You guys are right, noone knew the market was going to double (so quickly at least) after the financial crisis. The author still makes a good point. Most mutual funds doubled in the past 10 years, so getting somewhere around 7% annual interest which will still puts you well above 5% after taxes even if you’re in the highest tax bracket.

By: B Johnson

B Johnson — Sat, 24 Dec 2011 05:33:41 +0000

Sadly, many of you that read this article have missed the point. It isn’t about payoff your mortgage or not payoff your house and invest in the market. In my simple opinion, he is trying to point out that people sometimes get so wrapped up in a thought, goal, strategy that they lose sight of the big picture. There is an oppurtunity cost for each financial decision that you make and this is something that needs to be considered relative to the big picture.