Search found 7539 matches

by KlangFool
Tue Jan 23, 2018 12:14 am
Forum: Investing - Help with Personal Investments
Topic: What First Steps to Take to Help Me Become Financially Independent
Replies: 13
Views: 1227

Re: What First Steps to Take to Help Me Become Financially Independent

I'll echo what others have said about expenses. Really critical to cut those down if you're gunning for FIRE. While it doesn't look like you'll have any income coming in, you can progress by not compiling your debt. Anyway, now I'm going to revert to my student adviser role. I'm not sure you're goi...
by KlangFool
Mon Jan 22, 2018 8:49 am
Forum: Investing - Theory, News & General
Topic: The Power of Working Longer
Replies: 33
Views: 3867

Re: The Power of Working Longer

OP,

2 words response -> Age Discrimination.

For many folks, at a certain age, due to Age Discrimination, they are either unemployed or under-employed. So, working longer bring minimal extra income.

KlangFool
by KlangFool
Sun Jan 21, 2018 11:19 pm
Forum: Investing - Theory, News & General
Topic: Lower tax rates for 7 yrs.-Are you switching to Roth 401K
Replies: 61
Views: 4790

Re: Lower tax rates for 7 yrs.-Are you switching to Roth 401K

I figure there's a good chance that my lower tax rate will only be good for 3 years so I plan to convert most if not all our 401k's to ROTH 401k's in the next 3 years up to the top of the 28.8% bracket (25+3.8). Previously if I wanted to do any significant conversions our margin tax bracket was 53....
by KlangFool
Sun Jan 21, 2018 11:00 pm
Forum: Investing - Help with Personal Investments
Topic: Pull back on retirement saving to increase savings for kids' college?
Replies: 31
Views: 2266

Re: Pull back on retirement saving to increase savings for kids' college?

Delamer: currently our income is about $250-300k per year; all of the figures I've quoted here are based upon the salary component of our income (which is about $200k), and not the bonus (which is usually between $50-100K a year...although of course not guaranteed). We live overseas, in a very HCOL...
by KlangFool
Sun Jan 21, 2018 10:46 pm
Forum: Personal Finance (Not Investing)
Topic: Discussing a 529 with your kids
Replies: 74
Views: 4494

Re: Discussing a 529 with your kids

OP, 1) My son wants to study Physic. I told him flatly that I am not paying. He could double major Engineering and Physic. But, if he is going to major in Physic only, I am not paying. After one year in college, he dropped his physic major. He found out that he is not suitable for a scientist type o...
by KlangFool
Sun Jan 21, 2018 10:02 pm
Forum: Personal Finance (Not Investing)
Topic: Going to one income-seeking testimonials
Replies: 97
Views: 4148

Re: Going to one income-seeking testimonials

That's assuming no other above the line deductions such as healthcare or carryover capital losses. With healthcare costs alone, OP could be in 12% bracket making 105 or 107k per year. Would that effect your advice if so? Olemiss540, << OP could be in 12% bracket making 105 or 107k per year. >> As p...
by KlangFool
Sun Jan 21, 2018 9:46 pm
Forum: Personal Finance (Not Investing)
Topic: Going to one income-seeking testimonials
Replies: 97
Views: 4148

Re: Going to one income-seeking testimonials

Klangfool, Being in (most likely) the 12% fed bracket and probably paying very little taxes given the 4k in tax credits, are you certain this kind of blanket advice is appropriate given the new tax law and the OP's situation? Olemiss540, <<Being in (most likely) the 12% fed bracket >> OP has low si...
by KlangFool
Sun Jan 21, 2018 8:44 pm
Forum: Personal Finance (Not Investing)
Topic: Going to one income-seeking testimonials
Replies: 97
Views: 4148

Re: Going to one income-seeking testimonials

Could you please educate me on why it’s not smart? Is it because pre-tax may put me in a better bracket? I hate to be thick about things, my strength is saving a penny, but I am clueless on tax strategy. BradJ, The short answer is you are paying a lot more taxes by contributing to Roth 401K. The lo...
by KlangFool
Sun Jan 21, 2018 8:27 pm
Forum: Personal Finance (Not Investing)
Topic: Going to one income-seeking testimonials
Replies: 97
Views: 4148

Re: Going to one income-seeking testimonials

My current investments/savings are: 8% pre tax in 401k 4% post tax in Roth 401 4% in ROTH IRA +40k in emergency fund BradJ. If you have 6 figures income, it rarely makes any sense to contribute to Roth 401K. A) Max up your Trad. 401K B) Put your tax savings into the Roth IRAs. KlangFool Could you p...
by KlangFool
Sun Jan 21, 2018 8:05 pm
Forum: Personal Finance (Not Investing)
Topic: Going to one income-seeking testimonials
Replies: 97
Views: 4148

Re: Going to one income-seeking testimonials

My current investments/savings are: 8% pre tax in 401k 4% post tax in Roth 401 4% in ROTH IRA +40k in emergency fund BradJ. If you have 6 figures income, it rarely makes any sense to contribute to Roth 401K. A) Max up your Trad. 401K B) Put your tax savings into the Roth IRAs. KlangFool Could you p...
by KlangFool
Sun Jan 21, 2018 7:57 pm
Forum: Personal Finance (Not Investing)
Topic: Going to one income-seeking testimonials
Replies: 97
Views: 4148

Re: Going to one income-seeking testimonials

BradJ wrote:
Sun Jan 21, 2018 7:18 pm
My current investments/savings are:
8% pre tax in 401k
4% post tax in Roth 401
4% in ROTH IRA
+40k in emergency fund
BradJ.

If you have 6 figures income, it rarely makes any sense to contribute to Roth 401K.

A) Max up your Trad. 401K

B) Put your tax savings into the Roth IRAs.

KlangFool
by KlangFool
Sun Jan 21, 2018 7:10 pm
Forum: Personal Finance (Not Investing)
Topic: Going to one income-seeking testimonials
Replies: 97
Views: 4148

Re: Going to one income-seeking testimonials

Thank you for your replies, all advice is appreciated. I am a Dave Ramsey follower through and through,besides his investing advice, which is surface level stuff. As far as the 15%, that is honestly a target that becomes harder and harder to hit. That doesn’t count my company match, or the pension ...
by KlangFool
Sun Jan 21, 2018 6:52 pm
Forum: Personal Finance (Not Investing)
Topic: Going to one income-seeking testimonials
Replies: 97
Views: 4148

Re: Going to one income-seeking testimonials

OP, 1) Single income household. Lifetime 30+% gross income saver. Northern Virginia area. "Cash Flow" 2 kids through college now. 2) At your income level, it is very simple to find out whether you can make it. What is the price of your house? You can downsize everything easily except the house. <<No...
by KlangFool
Sun Jan 21, 2018 2:00 pm
Forum: Investing - Help with Personal Investments
Topic: A 4-5% rebalance to bonds barely budges risk/return
Replies: 43
Views: 3241

Re: A 4-5% rebalance to bonds barely budges risk/return

I'm not sure why you say that 30% vs 40% of a portfolio loss would be just as painful. If I had a million dollars (cue the music), and then during a crash it fell to $600k, I'm sure I'd much rather have $700k. When the next bear hits, I don’t think being 70/30 versus 80/20 would matter for me. It w...
by KlangFool
Sun Jan 21, 2018 1:56 pm
Forum: Investing - Help with Personal Investments
Topic: Should I buy a business or suck it up at a job(s) with a pension.
Replies: 82
Views: 5417

Re: Should I buy a business or suck it up at a job(s) with a pension.

"...stay at my current job till I’m 55 and then retire with full medical and that would also allow my wife to retire at 50 and call it a day......but that’s another 8 years. Which I could contribute to my 457 and Roth IRA.... . . . . run from the car wash idea . . . . as fast as you would run from ...
by KlangFool
Sun Jan 21, 2018 12:55 pm
Forum: Investing - Help with Personal Investments
Topic: A 4-5% rebalance to bonds barely budges risk/return
Replies: 43
Views: 3241

Re: A 4-5% rebalance to bonds barely budges risk/return

OP, What is the point of having a plan that you cannot execute? A) If your plan call for rebalancing at 5%, do it. B) If you are not willing to commit to a 5% rebalancing plan, switch to a plan with a bigger band. C) One of the reasons why I put 40% of my portfolio into Wellington fund is it rebalan...
by KlangFool
Sun Jan 21, 2018 11:47 am
Forum: Personal Finance (Not Investing)
Topic: We need more space!
Replies: 24
Views: 1954

Re: We need more space!

OP, 1) What is the age range of your kids? 2) Please note that when the kids grow up, they will leave and go to college. So, this may be a temporary condition. Aka, you need more space. 3) Why do you assume you need more space at home for teenagers? They may spend more time outside the house sociali...
by KlangFool
Sat Jan 20, 2018 8:57 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage Payoff Advice with Appreciated Securities
Replies: 17
Views: 860

Re: Mortgage Payoff Advice with Appreciated Securities

KlangFool - thanks for the continued follow-up. My view is that a recession is an ordinary part of the business cycle. It is why I stay at 60/40 - to allow me to sleep at night. I consider a dramatic change as a once in every 30-50 year event (depression/major market crash; large scale war; other b...
by KlangFool
Sat Jan 20, 2018 6:40 pm
Forum: Investing - Theory, News & General
Topic: Fear of dying with too much money?
Replies: 137
Views: 7731

Re: Fear of dying with too much money?

Dying with residual money ... success. Dying after having run out of money ... failure. Excepting heirs, I have little concern about how successfully that might have been achieved. While not as severe as running out of money before running out of life, I don't how I would classify someone with a $1...
by KlangFool
Sat Jan 20, 2018 6:05 pm
Forum: Investing - Theory, News & General
Topic: Fear of dying with too much money?
Replies: 137
Views: 7731

Re: Fear of dying with too much money?

Dying with residual money ... success. Dying after having run out of money ... failure. Excepting heirs, I have little concern about how successfully that might have been achieved. While not as severe as running out of money before running out of life, I don't how I would classify someone with a $1...
by KlangFool
Sat Jan 20, 2018 5:53 pm
Forum: Personal Finance (Not Investing)
Topic: What's your annual cost of living (expenses)?
Replies: 40
Views: 3083

Re: What's your annual cost of living (expenses)?

OP,

Married with 2 kids in college.

1) Northern VA/DC Metro area

2) Annual expense without college cost -> 60K with the mortgage. 45K without the mortgage

3) College cost for 2 kids ~ 50K to 60K per year.

KlangFool
by KlangFool
Sat Jan 20, 2018 4:57 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage Payoff Advice with Appreciated Securities
Replies: 17
Views: 860

Re: Mortgage Payoff Advice with Appreciated Securities

KlangFool - house value is $500K. I indicated "almost" worst case scenario which assumes no dramatic change in the overall economic environment. There are all kinds of really bad things (black swans, etc) that could happen and I understand that but at the end of the day we can't plan for them. jr68...
by KlangFool
Sat Jan 20, 2018 3:25 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage Payoff Advice with Appreciated Securities
Replies: 17
Views: 860

Re: Mortgage Payoff Advice with Appreciated Securities

Thank you for the replies. The gain on sale is approximately $150K (cost basis is ~$175K) so the capital gains rate will be 15%. [The 15% rate for capital gains applies for total taxable income below $480K for married filing jointly.] I do have approximately $35K in taxable bonds with limited gain ...
by KlangFool
Sat Jan 20, 2018 10:27 am
Forum: Personal Finance (Not Investing)
Topic: Mortgage Payoff Advice with Appreciated Securities
Replies: 17
Views: 860

Re: Mortgage Payoff Advice with Appreciated Securities

OP,

1) What is your current annual expense?

2) Is 1.4 million equal to 25 times your current annual expense?

KlangFool
by KlangFool
Thu Jan 18, 2018 6:07 pm
Forum: Investing - Help with Personal Investments
Topic: Looking for multiple sets of eyes to review
Replies: 51
Views: 4492

Re: Looking for multiple sets of eyes to review

coachd50, Is that annual or one time fee when you purchase the fund? KlangFool From all I can tell it is a yearly fee. The way it is written in the contract is as follows: "Each variable investment account is assessed a mortality and expense risk charge. It is a daily charge assessed in an amount e...
by KlangFool
Thu Jan 18, 2018 5:47 pm
Forum: Investing - Help with Personal Investments
Topic: Looking for multiple sets of eyes to review
Replies: 51
Views: 4492

Re: Looking for multiple sets of eyes to review

High fee 457 or 403b plans that when I looked last time, didn't have any real attractive options. Are you sure there isn't a relatively cheap S&P 500 fund? +1. It might be worthwhile for the OP to contribute to 457/403b in order to get Earned Income Tax Credit or Saver's Credit. KlangFool Klangfool...
by KlangFool
Wed Jan 17, 2018 9:52 pm
Forum: Investing - Theory, News & General
Topic: [n X expenses + r] instead of [n X expenses]
Replies: 27
Views: 1095

Re: [n X expenses + r] instead of [n X expenses]

visualguy, I am a lifetime 30+% gross income saver. I kept 1 year of annual expense as the emergency fund.I handle all those "lumpy" expenses without a problem. I do not budget. So, I failed to understand why folks try to budget for the life unexpected emergency. KlangFool You're basically picking ...
by KlangFool
Wed Jan 17, 2018 9:10 pm
Forum: Investing - Theory, News & General
Topic: [n X expenses + r] instead of [n X expenses]
Replies: 27
Views: 1095

Re: [n X expenses + r] instead of [n X expenses]

visualguy, Come on. Are you saying those stuff do not happen before you retire? I have old parents and young child to take care of before I retire. Anyone with any level of family responsibility will experience those kinds of surprise through the years before retirement. KlangFool Sure, you can get...
by KlangFool
Wed Jan 17, 2018 8:19 pm
Forum: Investing - Theory, News & General
Topic: [n X expenses + r] instead of [n X expenses]
Replies: 27
Views: 1095

Re: [n X expenses + r] instead of [n X expenses]

OP, I tracked my expenses across the last 10 to 20 years. My annual expense essentially stayed about the same through the years. So, I do not need to guess what my future expense will be, KlangFool Right, but things change for people and their families over the years , particularly with aging. That...
by KlangFool
Wed Jan 17, 2018 6:57 pm
Forum: Investing - Theory, News & General
Topic: [n X expenses + r] instead of [n X expenses]
Replies: 27
Views: 1095

Re: [n X expenses + r] instead of [n X expenses]

OP,

I tracked my expenses across the last 10 to 20 years. My annual expense essentially stayed about the same through the years. So, I do not need to guess what my future expense will be,

KlangFool
by KlangFool
Wed Jan 17, 2018 1:38 pm
Forum: Personal Finance (Not Investing)
Topic: Friend Got Laid Off - Advice Needed
Replies: 46
Views: 4980

Re: Friend Got Laid Off - Advice Needed

His specialty was data storage embedded systems, hence the cloud comment. He is intelligent and hardworking and is planning to look for jobs. OldSport, There are cloud-based storage systems out there. He just to update his knowledge to the cloud-based solution. https://www.netapp.com/us/index.aspx ...
by KlangFool
Tue Jan 16, 2018 11:47 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

A) Invest in your portfolio aka in my case (60/40) When you invest $100, are you not buying $40 in bonds? inbox788, I am investing $100 in my 60/40 portfolio. I believe that my 60/40 risk-adjusted return is better than my mortgage rate. KlangFool So you're not buying $60 in equities and $40 in bond...
by KlangFool
Tue Jan 16, 2018 9:25 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

inbox788 wrote:
Tue Jan 16, 2018 9:21 pm
KlangFool wrote:
Tue Jan 16, 2018 9:19 pm
A) Invest in your portfolio aka in my case (60/40)
When you invest $100, are you not buying $40 in bonds?
inbox788,

I am investing $100 in my 60/40 portfolio. I believe that my 60/40 risk-adjusted return is better than my mortgage rate.

KlangFool
by KlangFool
Tue Jan 16, 2018 9:19 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

For whatever reason, you choose to insist that extra money from not paying the mortgage can only be invested and compared with the bond fund. My point is you do not have to. It could be invested in a 60/40 portfolio. Again, that's not what I'm saying. I hope others aren't coming to the same misunde...
by KlangFool
Tue Jan 16, 2018 8:48 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

[/u][/b] Is it not true that "Bond funds returns are not guaranteed"? Is $100 invested in equities the same as $100 invested in equities? Is $60 invested in equities the same as $60 invested in equities? Is $60 invested in equities the different from $100 invested in equities? inbox788, Bingo! For ...
by KlangFool
Mon Jan 15, 2018 11:01 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

Do you remember 2008/2009 recession? Aka, the house price drop by 50% in many places. The difference of 2 years is significant in a recession. This is on top of your main portfolio. One could take this as an argument for prepaying a mortgage as much as possible. The less you owe on your house, in a...
by KlangFool
Mon Jan 15, 2018 10:57 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

Do you remember 2008/2009 recession? Aka, the house price drop by 50% in many places. The difference of 2 years is significant in a recession. This is on top of your main portfolio. I know I can last 5 years without selling my stock in a recession. Many folks will not survive or suffer the permanen...
by KlangFool
Mon Jan 15, 2018 8:28 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

For B, you can last 3.5 years, but you have a bigger mortgage at the end. A only owes the bank $150K when he runs out of money. B still owes maybe $275K. If you lose your job in a recession, it doesn't matter to me whether you have to sell the house in 1.5 years or 3.5 years. It is true that B can ...
by KlangFool
Mon Jan 15, 2018 7:39 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

There are 2 issue at play, changing AA and comparing bond return vs mortgage. You don't have to think about mortgage as a negative bond to improve your situation. Instead of borrowing $300k at 3.49% and investing $180k inequities hoping for 9.67% and $120k in bonds for 3%, just borrow the 180k to i...
by KlangFool
Mon Jan 15, 2018 7:37 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

I have a 400K house with a 300K mortgage. So, it is between A) 180K 100% stock with 120K mortgage which does not change my mortgage payment unless I recast the loan B) 300K 60/40 portfolio with the 300K mortgage. In a recession, the stock crash 50% and the bond stay flat. My annual expense is 60K p...
by KlangFool
Mon Jan 15, 2018 7:35 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

A) 180K 100% stock with 120K mortgage which does not change my mortgage payment unless I recast the loan B) 300K 60/40 portfolio with the 300K mortgage. In a recession, the stock crash 50% and the bond stay flat. My annual expense is 60K per year. For (A), I can only last 90K/60K = 1 1/2 years. For...
by KlangFool
Mon Jan 15, 2018 12:54 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

I borrow 300K from my mortgage to be invested in a 60/40 portfolio. And, if and when I pay off my mortgage, I will move 300K from my 60/40 portfolio to pay off the mortgage. Now, some other folks want to think about the negative bond or whatever does not make any sense to me. There are 2 issue at p...
by KlangFool
Sun Jan 14, 2018 10:00 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

I borrow 300K from my mortgage to be invested in a 60/40 portfolio. And, if and when I pay off my mortgage, I will move 300K from my 60/40 portfolio to pay off the mortgage. Now, some other folks want to think about the negative bond or whatever does not make any sense to me. There are 2 issue at p...
by KlangFool
Sun Jan 14, 2018 9:41 pm
Forum: Personal Finance (Not Investing)
Topic: Budgeting Vs Savings Rate
Replies: 65
Views: 4402

Re: Budgeting Vs Savings Rate

After I max out all my tax-advantaged accounts, the additional savings are debited into my Vanguard taxable account. This brings the amount up to my 30+% gross saving rate goal. Yeah, right now my problem is that I seem to be saving about 20% (maybe a bit less), and I'd be much happier if I was sav...
by KlangFool
Sun Jan 14, 2018 6:07 pm
Forum: Personal Finance (Not Investing)
Topic: Budgeting Vs Savings Rate
Replies: 65
Views: 4402

Re: Budgeting Vs Savings Rate

OP, 1) I have a saving goal. I save X% of my gross income. Then, I spend the rest. 2) I tracked my expense via Quicken. I know where my money goes. But, I do not budget. I do not use that tracking to control my expenses. 3) After my "Pay Yourself First" savings, I debit the rest of my income into m...
by KlangFool
Sun Jan 14, 2018 5:45 pm
Forum: Personal Finance (Not Investing)
Topic: Budgeting Vs Savings Rate
Replies: 65
Views: 4402

Re: Budgeting Vs Savings Rate

OP, 1) I have a saving goal. I save X% of my gross income. Then, I spend the rest. 2) I tracked my expense via Quicken. I know where my money goes. But, I do not budget. I do not use that tracking to control my expenses. 3) After my "Pay Yourself First" savings, I debit the rest of my income into m...
by KlangFool
Sun Jan 14, 2018 5:15 pm
Forum: Personal Finance (Not Investing)
Topic: Budgeting Vs Savings Rate
Replies: 65
Views: 4402

Re: Budgeting Vs Savings Rate

When someone says they “ spend way too much” to me that is another way of saying they aren’t meeting their savings goals and/or have too much debt. So I am curious as to what exactly your issue is. As I said, I max out all of my tax-advantaged accounts, but that ends up being only about 20% of our ...
by KlangFool
Sun Jan 14, 2018 5:12 pm
Forum: Personal Finance (Not Investing)
Topic: Budgeting Vs Savings Rate
Replies: 65
Views: 4402

Re: Budgeting Vs Savings Rate

OP, 1) I have a saving goal. I save X% of my gross income. Then, I spend the rest. 2) I tracked my expense via Quicken. I know where my money goes. But, I do not budget. I do not use that tracking to control my expenses. 3) After my "Pay Yourself First" savings, I debit the rest of my income into my...
by KlangFool
Sun Jan 14, 2018 4:59 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

My 60/40 portfolio return on the average of 7% over the last 10 years. I have a 300K 30 years fixed 3.49% mortgage and 1.2 million 60/40 portfolio. The choice is between A) 1.2 million 60/40 portfolio and 300K 3.49% mortgage versus B) 900K 60/40 portfolio with no mortgage The mortgage plus property...
by KlangFool
Sun Jan 14, 2018 4:53 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17469

Re: Why Buy Bonds If You Have A Mortgage?

1) If you pay off the whole mortgage, you no longer need to pay your mortgage. You improve your monthly cash flow. 2) If you pre-pay a portion of your mortgage, you still need to pay the same amount of mortgage every month. Hence, you do not improve your monthly cash flow. Furthermore, you tied up ...