DON'T Pay Your Mortgage Off Early!!!

getmore4less

smudgemanc26 wrote: »

The thing is now hopefully i will get a voluntary severance payout from work once i have cleared my exisiting debts loan and credit card i will have money left over.

I have a pension at work which my employer contributes to and hope to continue this if i can as i have had this since i was 21.

Currently dont have any savings a such by have the necessary life insurance incase anything happens to me.

Whats the life insurance for? do you have partner or dependants.

Do you have a job? (severence) and what happens to the pension scheme if you are laid off?

All the statagies in this thread are based on having income so untill you have restored the income stream make sure that all the cash you have is available to pay the bills/living costs then invest* the spare after that keeping an emergency fund.

I would also seriously look at your budget to make sure that you don't get into debt again.

*what to invest in pension,ISA,mortgage will depend on your particular circumstances.

keeperbear

After the continuing stock market crashes, it is very funny to resurrect this thread. All these "don't pay off your mortgage, invest the funds in the stock market" people have completely disappeared from the mortgage free forums. I bet they wish they had sold their shares and paid off their mortgages now.

I am happy to live in my mortgage free property and couldn't care less about falls in the stock market. My property price may fall, but I really don't care as I am rent free for the rest of my life.

getmore4less

The current drops have just put me back to where I was at the begining of the year and reduced the anualised return rate down to 11% still well above the mortgage rate.

Recent purchases have divis 6%+ which I expect will grow with inflation and would cover the payments on the any mortgage and beyond, so the equivilent to rent free AND an income in the future.

If prices drop further I will be taking funds out of my offset to buy more since the divis will be approaching 7%+.

boadicea_2

I would love to be in the position to be squabbling over which is the best place to invest your spare money.

I don't have any. I work a 50-hour week at two jobs and manage to earn just enough to support myself and mum, who is ill (she became ill when I was 22 and I'm now almost 29). That's with having a university degree (very little student debt - I worked my way through university) and speaking several languages.

I bought a small, rentable property on a 40-year mortgage which I can just about afford to pay for even if interest rates rise. It's rented out and I cover the shortfall between the rent and the actual mortgage. It was the only vehicle I could find whereby I could generate money from having nothing, no savings at all (and NOT because I !!!!ed it away on holidays/clothes/general cr*p). At least it will someday be mine...

Because I'm an optimist and believe things get better, I've been trying to find out about investing in the stock markets for years (not easy when you have little free time and cash) - just so that when I do have a little spare money, I'll know what to do with it.

But please - don't flame those of us that choose to invest in property and don't have any other investments. We're not all completely dumb - just not everyone is in the position of having a highly-paid job and being able to generate spare cash to throw at investing!

Mogz

Sloppy_Saver wrote: »

You can have that now, not when you're too worn out and old from overpaying your mortgage so that drunken debauchery consists of a "glass of sherry and lie down".

Spend, Save and Overpay in equal amounts. You could scrimp for years, stay in every night eating porridge and then when you finally pay off your mortgage, drop dead and have missed your life.

Come on, lets all get pensions. Come to the "Pensions & Annuities" stream, that's where the cool people hang out!

Agreed on the principle.

I have debts im paying off, after ive cleared them all ill be around £300 per month better off overall. £100 extra goes on the mortgage, £75 in a savings account, and the rest is to improve my quality of life!

As for a pension, I don't really believe in them so much.... I do have a pension, but I'm planning on "mkaing some money"before I need it.

The way things are going, I think i'll be alright - a few years ago I wasnt much cop at business life, but I'm getting the hang of what i'm doing now, and in the future I would hope that the wealth of experience I am getting now, will realise itself financially.

Hope.......and faith.... perhaps not the best way to plan, but the only way to live. I'm only 28 now so if things dont head that way in 6 years or so, I'll change my perspective...

boadicea_2

Thanks for the reply DD. Apologies for the word squabbling - shall we agree on "heated debate"?

I do actually have a small pension which I have been paying into since I was 24. It's not a massive amount of money, but a small amount I can afford without it being a huge financial commitment. I also have another one with small contributions from my employer. The thing is, neither of these has given anywhere near the returns that property has over the last few years. While I accept that we are now almost at the top of the cycle, and quite possibly the whole thing is going to come crashing down, bricks and mortar are a physical, tangible thing that I can still use (either to live in or to generate money by having someone else do so) even should its value decrease. Which is not so for stocks and shares...

Also, I did say it was a mortgage I could pay even if interest rates went up.

I could never have invested the same amount of money otherwise - there would always be something that swallowed it, be it medication I had to pay for, unexpected bills, various emergencies, whatever. Yes, these do happen - but having a solid commitment to pay an amount I cannot duck out of means that if there is an emergency, I need to use my brains to generate money elsewhere (be it a few more shifts at work, translating, whatever) - and as I am multi-skilled, I can manage.

Believe me I wouldn't have chosen it this way, but I am doing the best I can with what I've got.

auntie_brenda

boadicea wrote: »

I am doing the best I can with what I've got.

That should sum up the attitude of everyone on here - so let's stop squabbling! We all make choices based on what is best for us at the time - that may be financially best, or may be 'happy with that level of risk' best, or 'happy to take a reduced return cos at least I understand it' best.

The point is, we're all doing SOMETHING. Which has to be better than p*ss*ng it up against the wall every Sat night, surely?

boadicea_2

The point is, we're all doing SOMETHING. Which has to be better than p*ss*ng it up against the wall every Sat night, surely?

Thanks Auntie Brenda - entirely agree, I know plenty of people that p*ss it up against the wall...

Also forgot to add - my (albeit quite possibly screwed) logic is - if I do wind up going bankrupt, better before I'm 30 - at least I'll still have time to start over :rotfl:

jessicamb

After discussions with MSE Towers I have deleted most of the latter half of this thread and reopened it for on topic discussions to continue.

If I have missed any posts that are arguing/abusive please send me a pm so I can delete them too.

Please be nice to all moneysavers

irishwench69

Hey guys,

Saw this article, and just had to share, given all the discussions here!!

http://www.everyinvestor.co.uk/everyinvestor/personal-finance/why-i-plan-never-to-pay-off-my-mortgage/e/149-1182

FWIW, I do think a balanced portfolio is the answer - being relatively young and a higher rate taxpayer, I still have enough time to take advantage of compound interest, so whack a fair amount into a company pension, a ISA and other savings, as well as money to go towards the mortgage (otherwise debt free)........

I'm not sure putting *everything* towards the mortgage would be the answer for me or other people, but can understand why people here do it - added security, reassurance etc.....
Would be boring if we all agreed right?! :T :beer:

IW x