paying off house

Gold has never been worth nothing- EVER. It is the base currency of the planet. If you have gold, you will ALWAYS have that wealth. Paper currencies have come and gone. Gold has always been used to conduct business. You're right, you can't eat it, but when TSHTF at least you will have something with which to barter for food/shelter/water... Money in the bank, or stocks/bonds...? I call your attention to the year 1929.

I agree with having the goods to make your own way; chain saw chains, equipment, MRE's, medicines... being able to ride out the first 30 days of a disaster (natural, economic, militant...) is paramount to your survival.

For the reasons I stated in my first post, gold is not going to fall appreciably in the future. Sure it will go +/- $10-15, but it will trend up as the economy becomes less stable. We can continue to pretend it's "not that bad", but with the private sector shrinking, and the governement employed growing- it's an unsustainable direction.

"Other, higher intrest debt, should be paid off first."

NO! PLEASE RESEARCH DAVE RAMSEY'S website! Other debts are unsecured loans, but your investment in your house (at least in Florida) is protected by homestead statutes.

Keep an emergency fund equal to a few months of your bill amounts, then use Dave Ramsey's "snowball method" PAY THE HOUSE OFF ASAP, then apply whatever amount the mg payments were to the smallest monthly unsecured debt bill until it is paid off completely. Pay the minimum amount due on all other bills while doing that. Do not worry about which is the "higher interest debt" because you are going to be knocking it all out pretty quickly.

After you pay off the smallest monthly unsecured debt bill, take that amount plus the minimum of the next smallest bill and apply all those funds to it until it is paid off, then repeat until all the bills are paid off.

It could go down $200-300 over the next year too, 25% or more. It has happened before.

As well there are people who held on to stocks from before the depression, or bought during it, that did very very well over time.

Why do you think all of the sudden all the gold companies are plastering the airwaves solid with ads to buy their gold and buy it now? Buy low, sell high, and that's exactly what they are doing..

I read all his with great interest. Boy, what a nice day dream, what to do with $50,000! Don't I wish I had some of that. But what really struck me is that Agmantoo is the ONLY practical entrepreneur amongst all the HT persons who posted here. He and TnAndy who builds beautiful rental houses sure do stand out like shining stars on this forum. Now, if I had that much money, I wouldn't in my area be able to find two mobile homes on nice acreage for $20,000 each but the principle is sound. No matter what, people need somewhere to live. Many cannot get a conventional loan. If they rent but can't afford the rent, they can move others in to cover the rent. If I were OP I'd ask DH for his reasons before turning to strangers but maybe DH read the parable in the Bible about stewardship? To me, Agmantoo's post is about stewardship and the best way to INCREASE the $50,000 which is a fine rephrasing of OP's original question. He is saying how OP can pay off her house and have her money, too. If he can do it, why can't you???

I received a sum of money, put it in CDs at a fair interest rate, when the CD matured, interest was less than 1%, interest on mortgage was 8+%, paying off the mortgage saved me 7+% . That is a lot of money saved. House is paid. Can live on reduced income easier since retirement.

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"Agriculture is our wisest pursuit, because it will in the end contribute most to real wealth, good morals, and happiness."
Thomas Jefferson to George Washington 1787

Sure, many different things COULD happen in the near future. There is a large difference between what is POSSIBLE and what is PROBABLE. I am retired, 100% debt-free, at 41 because of gold- and sound management of my life.

Gold companies are plastering their ad's to buy gold so they can make money. Thing is, they make their profit on the margins, not on priciple. They know gold is going UP, that's why they're hot to advertise. People will BUY from them, realize a profit and SELL back to them. They will in-turn SELL that same gold to another buyer. The delta between their buy-sell rates is not very large, about $4.

Also agree that those who hold stock in bad times can see a profit on the market up-swing; provided they can wait 10-20 years. That's provided that the companies you hold stock in don't tank. When that happens, you're done. Plain and simple, ALL your investment is gone. You cannot go to, say, IBM and demand office furniture as a return on your money. With gold, you don't face that risk. No one else controls your access to the investment,l you can reach out and touch it anytime. As for those who bought DURING the depression- they were not the average folks. Average folks had no cash, they were standing in soup lines becasue they had nothing.

This has bent a bit from the OP's question, but it's germane to the forum, as most of us seek a way to have control over more of our lives. By controlling your tangible wealth yourself, you remove the loss-risk of a stock market crash, or the death of the dollar. Both of which will send gold into the $2000+ range.

That's the way to do it! Pay it off, and continue to make your mortgage payment...to yourself! What a concept!

How did you get the $50,000--an estate or from savings of income over expenses...

While in normal times considering tax consequences, interest/profits you could make on alternative investments vs the cost of the mortgage was reasonable we no longer have normal economic times and these aren't relevant.

I think a substantial emergency fund is the top priority. I think the mortgage should be the second priority, if you can pay it off totally. If not, pay off high interest rate credit cards. The only thing which hasn't been mentioned is I think fast payoff energy savings investments (insulation, replacing old furnace...) is a very good idea as I expect energy costs to explode.

That wouldn't amount to as much as mortgage interest would be anyway. Offsetting the mortgage interest is the best value.

In my case, I bought a home at the Las Vegas trustee sale for $30K. Rent for a home like mine would be no less than $800/month, or around $10K/year. That means that I get a 33% return on my investment each year just in offsetting rent. Where else are you going to find 33%?

The issue here is in the availability of money in the event of an emergency. I suspect that you will always be able to get an equity loan of some sort on real estate. I would go ahead and put it towards paying off the house.

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You haven't provided enough information to make a meaningful suggestion.

There are lots of things to consider before you can come to a decision or for any of us to make a solid recommendation.

Take the interest savings comments that people have made. We don't know how long you have owned your house and what the interest rate is that you are paying.

If you are relatively early in the mortgage term, have a somewhat higher interest rate than now and currently have a 30 year mortgage I might suggest that you refinance down to a 15 year mortgage at a sub 4% rate (assuming you have good credit). Take the $50k and invest it. It is possible to get 3% or better dividends from solid companies and have potential upside in the market over time.

If you are risk tolerent you could take the money and invest it in a business.

If you are towards the end of your mortgage then you have already paid most of the interest (rule of 72s). In this case, paying off the mortgage implies that you cannot find a higher return for the money than the nominal interest rate (even though you have already paid most of the interest).

Your screenname implies you have two children. You might consider funding a 529 if you think they might go to college.

Paying off the mortgage means you only have to worry about property taxes, Insurance (Assuming you don't want to carry the risk yourself) and maintenance on your home. As some have pointed out, this can be a wonderful feeling.

On the other hand, a home is a relatively illiquid asset and as many have found out to their dismay, it can go down in price as well as up. In time of emergency you may have to go to a lender to ask for a loan at whatever the current rate is. Despite low rates today, many are concerned about inflation and higher rates down the road.

The bottom line is that many of the factors that will guide your choice are specific to your circumstances.

Mike

Mike in Ohio

Your statement "On the other hand, a home is a relatively illiquid asset and as many have found out to their dismay, it can go down in price as well as up." IMO we all have been sold a "Bill of Goods" in that a home is an ASSET. In actuality a home is a liability IMO. It is taxed, has lots of maintenance issues, makes no money for us and is a necessity. To become an asset we have to sell it. We cannot have the benefits from it and still own it and we all need shelter. A home is really more a "White Elephant" than anything else. As a reminder of the definition of a White Elephant here it is

1. A rare, expensive possession that is a financial burden to maintain.
2. Something of dubious or limited value.

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Agmantoo
If they can do it,
you know you can!

Momof2kids

As to the WHY?

It gives purpose for many folks to go to work each day!

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Agmantoo
If they can do it,
you know you can!

My point is that while it may be a depreciating asset and one may question the wisdom of owning a house but it is technical an asset. My point was that if it has to be sold it cannot always be sold quickly, easily nor for the amount of money that one might hope for.

I guess I'm an odd ball, but whenever I see archeological discoveries of gold coins I think of those gold advertisements. The savers in antiquity completely lost their savings, they got buried for thousands of years. While I'm at it, can we say for sure that gold has never been worthless. How would we know such a thing?

It has been fascinating to read through these posts. Congratulations to those that have paid off their mortgages! I am envious.

Perhaps the gold discussion could be started in another thread? Seems unfair to the OP that the thread gets hijacked and I'm sure eventually locked just because people want to debate gold.

Gold is an abundant resource across the globe. There's lots of it just sitting around, so the value has increased hardly at all over a very long period. It's not considered a good investment if what you want is growth of the principle.

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"Perhaps I'll have them string a clothesline from the hearse I am in, with my underwear waving in the breeze, as we drive to the cemetary. People worry about the dumbest things!"
by Wendy

Friday gold was at $1246. I bought quite a bit at $32-$39.
I am well satisfied with the increase in value.

I bought my house at a bank foreclosure sale many years ago. Paid cash. I had to do a lot of work(did all the work myself) to make it habitable. Paid for everything cash. Once I had the house finished and moved in, I was pretty well broke. BUT, because the house now appraised for a whole lot more than I had put into it, I had access to my money again, because I could take out a mortgage, if I so needed. For years I got junk mail every week, different companies wanting to loan me money against my home.

pancho
Regarding gold......If I had "quiet a bit at $32-$39 I would sell! A old saying "pigs get fatter and hogs get slaughtered" may be applicable here.

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Agmantoo
If they can do it,
you know you can!

How about if you were buying today at $1246, would you think thats such a good deal?