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Old 04-20-2007, 09:01 AM   #21
atizzle
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which is exactly why most regular working people like us will never become wealthy.
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Old 04-20-2007, 09:24 AM   #22
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Where are you going to get all this money to invest?

Here is another example for you:

The rule of 72: Take the interest rate of an investment and divide it into 72 and that is how many years it would take to double your money. So if you found an investment vehicle that yeilded a 7.2% annual return, you would double your money in 10 years. Lets say you take an interest only home equity loan for $100k. You invest that $100k, and it turns into $200k in 10 years (at 7.2% interest rate). If the interest rate on the interest only home equity loan is 6%, you would pay $6000 per year for the loan. But remember that is tax deductible. Assume 33.3% (or 1/3) tax rate, so it ends up that the actualy cost of the loan is only $4000 per year, the other $2000 being your tax savings. So after 10 years, you paid $40k in interest payments, but you also doubled your $100k, so now you have $200k.

$200k - $100k initial investment - $40k interest = $60k. You just made $60k.

There are 4 ways to make money:
people at work (jobs)
money at work (interest)
opm (other people's money)
charity

Truly wealthy people make money from opm aka borrowing. Look at banks and credit companies. They borrow your money an invest it at a higher rate of return than the rate to borrow it.

It's a tough mindset to get out of, but having a paid off house is not really all that useful unless you leverage your equity in the house.
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Old 04-20-2007, 11:51 AM   #23
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Quote:
Originally Posted by bigcomfynumero2
Head down to the used car department at Momentum BMW on the SW freeway. Talk to Brent Hawthorn and tell him martin sent you. I've purchased a couple of cars from him NP. The CPO is a must.

I've talked to Brent too I believe.....sounds familiar....if its the same guy, good guy.
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Old 04-20-2007, 11:52 AM   #24
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Quote:
Originally Posted by atizzle
Rushing to pay off a house is old-school, and not the smartest thing to do. For one, you no longer get the tax break. Take your time paying off your house, and when it is paid off (or almost paid off), take a home equity loan and invest. Otherwise, you are basically sitting in a pile of money.

+1

most investement advisors will tell you NOT to pay off your house....
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