Is 25 too young for paid off house?!

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Topic Author
Unbrokenspark
Posts: 49
Joined: Thu Nov 21, 2019 5:29 pm

Is 25 too young for paid off house?!

Post by Unbrokenspark » Thu Jul 30, 2020 7:59 pm

Emergency Fund: 3 months of expenses.
Debt: None House is Paid off (65K)
Filing Status: married filing jointly
Tax Rate: 12% Fedral 9% state
State: Iowa
Age: 25 wife 27
AA: 100/0
income 50K
Right now we have roughly 82K invested between work traditional/Roth 401k and Roth's and HSA

I will be investing 20K+ for the forseable future a year


I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.. now interest rates are low. im contimplating kicking the tires and looking into getting a mortgage..to invest...let me know what you guys think! either way!
Last edited by Unbrokenspark on Thu Jul 30, 2020 8:54 pm, edited 1 time in total.

Triple digit golfer
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Re: Is 25 too young for paid off house?!

Post by Triple digit golfer » Thu Jul 30, 2020 8:02 pm

You are 25 and own your home and have a six figure net worth. Invest and forget about it!

Nice job!

sad2
Posts: 107
Joined: Mon Feb 16, 2015 1:55 pm

Re: Is 25 too young for paid off house?!

Post by sad2 » Thu Jul 30, 2020 8:05 pm

Is that a typo?

Are you missing a digit in the price of your house? $65k?

If not, I need to try some geographic arbitrage and move to Iowa.

I've heard of $10,000 houses in Detroit and other areas, but not in Iowa, which I heard is a nice place to live.

Time to move!

mcraepat9
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Joined: Thu Jul 16, 2015 11:46 am

Re: Is 25 too young for paid off house?!

Post by mcraepat9 » Thu Jul 30, 2020 8:08 pm

This seems like one of those situations where if the lack of a mortgage makes you sleep well at night, then you did fine. You are young enough to have a lifetime of investing ahead of you. I would not worry about re-mortgaging your house just because rates are low.
Amateur investors are not cool-headed logicians.

000
Posts: 802
Joined: Thu Jul 23, 2020 12:04 am

Re: Is 25 too young for paid off house?!

Post by 000 » Thu Jul 30, 2020 8:08 pm

No, you're not too young for a paid off house.

If you think stocks will outperform your house in the long run and understand the risks of leverage, you could get a mortgage for investing.

Warning: insatiable greed has been the downfall of many, many people.

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Brianmcg321
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Re: Is 25 too young for paid off house?!

Post by Brianmcg321 » Thu Jul 30, 2020 8:10 pm

If you like the house its fine.

Now you can stash all you cash and get insanely rich. :beer

Don't upgrade until you're 40.
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.

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CyclingDuo
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Re: Is 25 too young for paid off house?!

Post by CyclingDuo » Thu Jul 30, 2020 8:42 pm

Unbrokenspark wrote:
Thu Jul 30, 2020 7:59 pm
Emergency Fund: 3 months of expenses.
Debt: None House is Paid off (65K)
Filing Status: married filing jointly
Tax Rate: 12% Fedral 9% state
State: Iowa
Age: 25 wife 27
AA: 100/0
income 50K
Right now we have roughly 82K invested between work Roth 401k and Roth's and HSA

I will be investing 20K+ for the forseable future a year


I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.. now interest rates are low. im contimplating kicking the tires and looking into getting a mortgage..to invest...let me know what you guys think! either way!
Well done on paying off your mortgage. :beer

We also live in Iowa.

Do NOT, I repeat - do not get another mortgage so you can invest. That would be insane and an entrance ticket to the NUT HOUSE material.

Don't sweat it being paid off as now the money from your monthly income that was previously going for the mortgage principal payment can go into your investments for the longer term. Stuff it into your retirement accounts, taxable accounts and emergency fund.

You are way ahead of the game at your ages for having $82K in your Roth IRA, Roth 401k and HSA and a paid off mortgage on an annual income of $50K. That's unicorn status for sure. :beer

Investing $20K per year for the foreseeable future is going to take you from current rare Unicorn status to Godzilla status.

Keep on doing whatever it is you are doing (and do not get sucked into any car loans or credit card debt).

You should be advising all of us!

CyclingDuo
"Everywhere is within walking distance if you have the time." ~ Steven Wright

Monsterflockster
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Re: Is 25 too young for paid off house?!

Post by Monsterflockster » Thu Jul 30, 2020 8:45 pm

Unbrokenspark wrote:
Thu Jul 30, 2020 7:59 pm
Emergency Fund: 3 months of expenses.
Debt: None House is Paid off (65K)
Filing Status: married filing jointly
Tax Rate: 12% Fedral 9% state
State: Iowa
Age: 25 wife 27
AA: 100/0
income 50K
Right now we have roughly 82K invested between work Roth 401k and Roth's and HSA

I will be investing 20K+ for the forseable future a year


I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.. now interest rates are low. im contimplating kicking the tires and looking into getting a mortgage..to invest...let me know what you guys think! either way!
Humble brag? As others have said... good job. Keep investing, saving and upgrade that house in a few years baller! :beer

Topic Author
Unbrokenspark
Posts: 49
Joined: Thu Nov 21, 2019 5:29 pm

Re: Is 25 too young for paid off house?!

Post by Unbrokenspark » Thu Jul 30, 2020 8:50 pm

Thanks for the kind words and advice! Yes Thats why I posted this so i dont enter the nuthouse!! I feal like weve built a nice foundation and any big moves or small i like to get some boglehead advice! Thankyou!

lakpr
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Re: Is 25 too young for paid off house?!

Post by lakpr » Thu Jul 30, 2020 9:28 pm

sad2 wrote:
Thu Jul 30, 2020 8:05 pm
Is that a typo?

Are you missing a digit in the price of your house? $65k?

If not, I need to try some geographic arbitrage and move to Iowa.

I've heard of $10,000 houses in Detroit and other areas, but not in Iowa, which I heard is a nice place to live.

Time to move!
I am thinking the same thing here! A home for the price of a Tesla!! wow!

IowaFarmWife
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Re: Is 25 too young for paid off house?!

Post by IowaFarmWife » Thu Jul 30, 2020 10:20 pm

sad2 wrote:
Thu Jul 30, 2020 8:05 pm
Is that a typo?

Are you missing a digit in the price of your house? $65k?

If not, I need to try some geographic arbitrage and move to Iowa.

I've heard of $10,000 houses in Detroit and other areas, but not in Iowa, which I heard is a nice place to live.

Time to move!
Iowa is a wonderful place to live, and our cost of living is pretty low.

OP, I think you are in a great position for being 25 years old and having a paid off house. Congratulations!
“The quickest way to double your money is to fold it in half and put it in your back pocket.” —Will Rogers

annu
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Re: Is 25 too young for paid off house?!

Post by annu » Thu Jul 30, 2020 11:56 pm

1) To appreciate happiness, you need pain
2) To appreciate peace in life, you need chaos.

I will suggest, do a HELOC, as not only they are higher rate, but can be called back any time, so will help with both 1 and 2.
Also invest in leverage equity options, and maybe even options, as they will help with 1 and 2 as well.


Or, like you avoid that girl who sure seems lots of fun, but drama and chaos always follows her, you avoid all of above and enjoy. :sharebeer

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geerhardusvos
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Location: heavenlies

Re: Is 25 too young for paid off house?!

Post by geerhardusvos » Fri Jul 31, 2020 12:06 am

Unbrokenspark wrote:
Thu Jul 30, 2020 7:59 pm
Emergency Fund: 3 months of expenses.
Debt: None House is Paid off (65K)
Filing Status: married filing jointly
Tax Rate: 12% Fedral 9% state
State: Iowa
Age: 25 wife 27
AA: 100/0
income 50K
Right now we have roughly 82K invested between work traditional/Roth 401k and Roth's and HSA

I will be investing 20K+ for the forseable future a year


I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.. now interest rates are low. im contimplating kicking the tires and looking into getting a mortgage..to invest...let me know what you guys think! either way!
You are doing really well. Keep it up! May I ask what your annual expenses are?
VTSAX and chill

Topic Author
Unbrokenspark
Posts: 49
Joined: Thu Nov 21, 2019 5:29 pm

Re: Is 25 too young for paid off house?!

Post by Unbrokenspark » Fri Jul 31, 2020 6:54 am

geerhardusvos wrote:
Fri Jul 31, 2020 12:06 am
Unbrokenspark wrote:
Thu Jul 30, 2020 7:59 pm
Emergency Fund: 3 months of expenses.
Debt: None House is Paid off (65K)
Filing Status: married filing jointly
Tax Rate: 12% Fedral 9% state
State: Iowa
Age: 25 wife 27
AA: 100/0
income 50K
Right now we have roughly 82K invested between work traditional/Roth 401k and Roth's and HSA

I will be investing 20K+ for the forseable future a year


I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.. now interest rates are low. im contimplating kicking the tires and looking into getting a mortgage..to invest...let me know what you guys think! either way!
You are doing really well. Keep it up! May I ask what your annual expenses are?
Thanks i would say roughly 20K things can always fluctuate tho..

worthit
Posts: 235
Joined: Tue Jun 19, 2018 2:10 pm

Re: Is 25 too young for paid off house?!

Post by worthit » Fri Jul 31, 2020 7:06 am

Unbrokenspark wrote:
Thu Jul 30, 2020 7:59 pm
Emergency Fund: 3 months of expenses.
Debt: None House is Paid off (65K)
Filing Status: married filing jointly
Tax Rate: 12% Fedral 9% state
State: Iowa
Age: 25 wife 27
AA: 100/0
income 50K
Right now we have roughly 82K invested between work traditional/Roth 401k and Roth's and HSA

I will be investing 20K+ for the forseable future a year


I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.. now interest rates are low. im contimplating kicking the tires and looking into getting a mortgage..to invest...let me know what you guys think! either way!
Let me see - A 25 year old with a paid off house, nearly $100k net worth and, sensible and smart enough to reach out to Bogleheads for financial advice? This in itself puts you in the top 1% of the population in my book in terms of knowledge and wealth building. With this kind of discipline, determination and prudence, you can be helping others including some of us here as CyclingDuo suggests.

Man you are killing it!

260chrisb
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Re: Is 25 too young for paid off house?!

Post by 260chrisb » Fri Jul 31, 2020 7:13 am

Triple digit golfer wrote:
Thu Jul 30, 2020 8:02 pm
You are 25 and own your home and have a six figure net worth. Invest and forget about it!

Nice job!
Yes, this!! You've not missed out on anything at the ripe old age of 25!! Well done.

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Cheez-It Guy
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Re: Is 25 too young for paid off house?!

Post by Cheez-It Guy » Fri Jul 31, 2020 7:23 am

Good job. I much prefer the no-debt approach myself. No one knows what the future holds. The combination of a good salary and a low cost of living has you well-positioned, and because it was so quick and easy to pay off the house, you really haven't missed much on investment gains.

I did something very similar when starting my career. My house was about $80,000 with close to an acre of land, and it's been solid and all I've needed for nearly 15 years. Apologies to you VHCOL folks.

flaccidsteele
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Re: Is 25 too young for paid off house?!

Post by flaccidsteele » Fri Jul 31, 2020 8:04 am

It appears that the consumer item makes up a significant portion of your net worth. It’s not what I would do at a young age

I was able to retire early because I focused more on buying investments instead of consumer items

Time in the market is king, and the more capital I allocated to the market in my 20s was better for my financial situation
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat

dziuniek
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Location: Corrupticut

Re: Is 25 too young for paid off house?!

Post by dziuniek » Fri Jul 31, 2020 8:19 am

Oh please, many people don't get out of school before 25.... or 30. Eeeeh.

Good job :)

Edit: Great, now I'm looking at properties in IA.

hnd
Posts: 94
Joined: Mon Jun 22, 2020 11:43 am

Re: Is 25 too young for paid off house?!

Post by hnd » Fri Jul 31, 2020 8:22 am

not for that paid off house. paying off our 58k home when we first got married laid a foundation for our freedom of choices investment wise down the road and i would do it again if given the choice.

Mr.Chlorine
Posts: 86
Joined: Fri Sep 13, 2019 9:17 am

Re: Is 25 too young for paid off house?!

Post by Mr.Chlorine » Fri Jul 31, 2020 8:26 am

Never too young to have a paid off anything. And at $65k (1.3 times current income) I would say you are a couple years ahead of schedule. Congrats!

Topic Author
Unbrokenspark
Posts: 49
Joined: Thu Nov 21, 2019 5:29 pm

Re: Is 25 too young for paid off house?!

Post by Unbrokenspark » Fri Jul 31, 2020 8:30 am

flaccidsteele wrote:
Fri Jul 31, 2020 8:04 am
It appears that the consumer item makes up a significant portion of your net worth. It’s not what I would do at a young age

I was able to retire early because I focused more on buying investments instead of consumer items

Time in the market is king, and the more capital I allocated to the market in my 20s was better for my financial situation
Yup i totally get where your comin from. Congrats on early retirement! is it everything its cracked up to be?

Silverado
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Re: Is 25 too young for paid off house?!

Post by Silverado » Fri Jul 31, 2020 8:33 am

Brianmcg321 wrote:
Thu Jul 30, 2020 8:10 pm
If you like the house its fine.

Now you can stash all you cash and get insanely rich. :beer

Don't upgrade until you're 40.
+1 stay where you are for at least a decade

caffeperfavore
Posts: 342
Joined: Thu Aug 06, 2015 11:45 am

Re: Is 25 too young for paid off house?!

Post by caffeperfavore » Fri Jul 31, 2020 8:39 am

lakpr wrote:
Thu Jul 30, 2020 9:28 pm
sad2 wrote:
Thu Jul 30, 2020 8:05 pm
Is that a typo?

Are you missing a digit in the price of your house? $65k?

If not, I need to try some geographic arbitrage and move to Iowa.

I've heard of $10,000 houses in Detroit and other areas, but not in Iowa, which I heard is a nice place to live.

Time to move!
I am thinking the same thing here! A home for the price of a Tesla!! wow!
This is the norm in much of Iowa, most of Illinois outside of Chicago, Indiana, Missouri, etc. etc. Pretty much anywhere beyond the coasts that's somewhat rural.

In my hometown you can snap up gorgeous old Victorians (that need some work, but labor there is cheap too) for $40k. The downside is that you need to drive an hour to shop at something beyond a small grocery store or Dollar General.

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JupiterJones
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Re: Is 25 too young for paid off house?!

Post by JupiterJones » Fri Jul 31, 2020 8:40 am

Mr.Chlorine wrote:
Fri Jul 31, 2020 8:26 am
Never too young to have a paid off anything.
This ^^^
Not owing money is sort of like a nice suit. It looks good on you no matter how old you are. :sharebeer
Last edited by JupiterJones on Fri Jul 31, 2020 1:08 pm, edited 2 times in total.
Stay on target...

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8foot7
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Re: Is 25 too young for paid off house?!

Post by 8foot7 » Fri Jul 31, 2020 9:03 am

There are about 7 gazillion 25 year olds who would trade places with you. Nice work.

Glockenspiel
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Re: Is 25 too young for paid off house?!

Post by Glockenspiel » Fri Jul 31, 2020 9:09 am

sad2 wrote:
Thu Jul 30, 2020 8:05 pm
Is that a typo?

Are you missing a digit in the price of your house? $65k?

If not, I need to try some geographic arbitrage and move to Iowa.

I've heard of $10,000 houses in Detroit and other areas, but not in Iowa, which I heard is a nice place to live.

Time to move!
In Minnesota, if you want to live in either a small town with few jobs, or out in the middle of nowhere, you can find plenty of old, small homes in need of repair for $65k. I’m sure that’s what this is, small older home in a small rural town, or a rural homestead. I’d argue Minnesota is nicer :D

Topic Author
Unbrokenspark
Posts: 49
Joined: Thu Nov 21, 2019 5:29 pm

Re: Is 25 too young for paid off house?!

Post by Unbrokenspark » Fri Jul 31, 2020 9:12 am

Glockenspiel wrote:
Fri Jul 31, 2020 9:09 am
sad2 wrote:
Thu Jul 30, 2020 8:05 pm
Is that a typo?

Are you missing a digit in the price of your house? $65k?

If not, I need to try some geographic arbitrage and move to Iowa.

I've heard of $10,000 houses in Detroit and other areas, but not in Iowa, which I heard is a nice place to live.

Time to move!
In Minnesota, if you want to live in either a small town with few jobs, or out in the middle of nowhere, you can find plenty of old, small homes in need of repair for $65k. I’m sure that’s what this is, small older home in a small rural town, or a rural homestead. I’d argue Minnesota is nicer :D
Minesooooooooota!!!! HA I would have to agree lol

Glockenspiel
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Re: Is 25 too young for paid off house?!

Post by Glockenspiel » Fri Jul 31, 2020 9:15 am

Glockenspiel wrote:
Fri Jul 31, 2020 9:09 am
sad2 wrote:
Thu Jul 30, 2020 8:05 pm
Is that a typo?

Are you missing a digit in the price of your house? $65k?

If not, I need to try some geographic arbitrage and move to Iowa.

I've heard of $10,000 houses in Detroit and other areas, but not in Iowa, which I heard is a nice place to live.

Time to move!
In Minnesota, if you want to live in either a small town with few jobs, or out in the middle of nowhere, you can find plenty of old, small homes in need of repair for $65k. I’m sure that’s what this is, small older home in a small rural town, or a rural homestead. I’d argue Minnesota is nicer :D
Here’s a nice small home in a small town only 1 hour drive from the Twin Cities Metro area for only $59k.

https://www.realtor.com/realestateandho ... ide#photo0

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Toons
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Re: Is 25 too young for paid off house?!

Post by Toons » Fri Jul 31, 2020 9:19 am

Mental Accounting
You are investing
The "Mortgage"
Now.
That is the way I treated it when I paid off the mortgage.
The next months "payment"
purchased shares of a Vanguard mutual fund,
Continued to do so for 10 years.
:mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

lakpr
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Re: Is 25 too young for paid off house?!

Post by lakpr » Fri Jul 31, 2020 10:07 am

JupiterJones wrote:
Fri Jul 31, 2020 8:40 am
Not owing money is sort of like a nice suit. It looks good on you no matter how old you are. :sharebeer
Beautiful word-smithy! I would like permission to steal your line above and reuse it, sir!

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JoeRetire
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Re: Is 25 too young for paid off house?!

Post by JoeRetire » Fri Jul 31, 2020 10:12 am

Unbrokenspark wrote:
Thu Jul 30, 2020 7:59 pm
I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.
Why stress out over something that's already over and done with? Assuming there is some reason you chose to pay off your mortgage, what has changed?
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.

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HueyLD
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Re: Is 25 too young for paid off house?!

Post by HueyLD » Fri Jul 31, 2020 10:15 am

Do not tell anyone (coworkers, friends, family, etc.) about your paid off home. It will invite undesirable comments and may even get you into being asked to donate to all kinds of causes that you do not want to be involved in.

Congrats for being prudent and successful. Keep up with the good work!

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geerhardusvos
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Re: Is 25 too young for paid off house?!

Post by geerhardusvos » Fri Jul 31, 2020 10:20 am

Unbrokenspark wrote:
Fri Jul 31, 2020 6:54 am
geerhardusvos wrote:
Fri Jul 31, 2020 12:06 am
Unbrokenspark wrote:
Thu Jul 30, 2020 7:59 pm
Emergency Fund: 3 months of expenses.
Debt: None House is Paid off (65K)
Filing Status: married filing jointly
Tax Rate: 12% Fedral 9% state
State: Iowa
Age: 25 wife 27
AA: 100/0
income 50K
Right now we have roughly 82K invested between work traditional/Roth 401k and Roth's and HSA

I will be investing 20K+ for the forseable future a year


I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.. now interest rates are low. im contimplating kicking the tires and looking into getting a mortgage..to invest...let me know what you guys think! either way!
You are doing really well. Keep it up! May I ask what your annual expenses are?
Thanks i would say roughly 20K things can always fluctuate tho..
Wow, that’s fantastic. You are in a great position. You are on track to retire by age 45. If you were to increase your income and keep your standard of living low, you could retire in your 30s. Keep up the great work, and my biggest advice is don’t inflate your life. Keep it simple, keep costs low, stay 100% equities like you are, don't desire a bigger or different house, and just enjoy your life and your family. Best wishes!
VTSAX and chill

Topic Author
Unbrokenspark
Posts: 49
Joined: Thu Nov 21, 2019 5:29 pm

Re: Is 25 too young for paid off house?!

Post by Unbrokenspark » Fri Jul 31, 2020 11:40 am

JoeRetire wrote:
Fri Jul 31, 2020 10:12 am
Unbrokenspark wrote:
Thu Jul 30, 2020 7:59 pm
I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.
Why stress out over something that's already over and done with? Assuming there is some reason you chose to pay off your mortgage, what has changed?
We drank the dave ramsey cool aid..Nothing has changed really, Just want to be effecient as possible with our money I guess.

Topic Author
Unbrokenspark
Posts: 49
Joined: Thu Nov 21, 2019 5:29 pm

Re: Is 25 too young for paid off house?!

Post by Unbrokenspark » Fri Jul 31, 2020 11:45 am

geerhardusvos wrote:
Fri Jul 31, 2020 10:20 am
Unbrokenspark wrote:
Fri Jul 31, 2020 6:54 am
geerhardusvos wrote:
Fri Jul 31, 2020 12:06 am
Unbrokenspark wrote:
Thu Jul 30, 2020 7:59 pm
Emergency Fund: 3 months of expenses.
Debt: None House is Paid off (65K)
Filing Status: married filing jointly
Tax Rate: 12% Fedral 9% state
State: Iowa
Age: 25 wife 27
AA: 100/0
income 50K
Right now we have roughly 82K invested between work traditional/Roth 401k and Roth's and HSA

I will be investing 20K+ for the forseable future a year


I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.. now interest rates are low. im contimplating kicking the tires and looking into getting a mortgage..to invest...let me know what you guys think! either way!
You are doing really well. Keep it up! May I ask what your annual expenses are?
Thanks i would say roughly 20K things can always fluctuate tho..
Wow, that’s fantastic. You are in a great position. You are on track to retire by age 45. If you were to increase your income and keep your standard of living low, you could retire in your 30s. Keep up the great work, and my biggest advice is don’t inflate your life. Keep it simple, keep costs low, stay 100% equities like you are, don't desire a bigger or different house, and just enjoy your life and your family. Best wishes!
Thanks for the kind words, Plan is to stay in this house for the time being fix some stuff and invest. :sharebeer

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JoeRetire
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Re: Is 25 too young for paid off house?!

Post by JoeRetire » Fri Jul 31, 2020 11:51 am

Unbrokenspark wrote:
Fri Jul 31, 2020 11:40 am
JoeRetire wrote:
Fri Jul 31, 2020 10:12 am
Unbrokenspark wrote:
Thu Jul 30, 2020 7:59 pm
I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.
Why stress out over something that's already over and done with? Assuming there is some reason you chose to pay off your mortgage, what has changed?
We drank the dave ramsey cool aid..Nothing has changed really, Just want to be effecient as possible with our money I guess.
Dave Ramsey, huh? Okay. Hopefully that craze is over for you. It can be hard to separate the wheat from the chaff with radio finance folks, and to realize when the extremely generalized advice applies to you personally and when it doesn't. Dave says some good things that help some people, but much of it is irrelevant (or even bad advice) for others.

Paying off a low-rate mortgage is not something I'd usually advise, but many folks find it helps them sleep better at night. Not something to stress out over either way.

I might advise bumping up your emergency fund in these turbulent times though...
Last edited by JoeRetire on Fri Jul 31, 2020 11:55 am, edited 2 times in total.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.

Priam
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Re: Is 25 too young for paid off house?!

Post by Priam » Fri Jul 31, 2020 11:52 am

You’ve done amazing and I also say don’t get a loan. Instead be proud that you own your house free and clear. God forbid someone lost their job or something else (granted you have an emergency fund) you at least don’t have to worry about losing your house because you can’t make mortgage payments. That in itself is worth a good nights sleep.

Topic Author
Unbrokenspark
Posts: 49
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Re: Is 25 too young for paid off house?!

Post by Unbrokenspark » Fri Jul 31, 2020 12:00 pm

JoeRetire wrote:
Fri Jul 31, 2020 11:51 am
Unbrokenspark wrote:
Fri Jul 31, 2020 11:40 am
JoeRetire wrote:
Fri Jul 31, 2020 10:12 am
Unbrokenspark wrote:
Thu Jul 30, 2020 7:59 pm
I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.
Why stress out over something that's already over and done with? Assuming there is some reason you chose to pay off your mortgage, what has changed?
We drank the dave ramsey cool aid..Nothing has changed really, Just want to be effecient as possible with our money I guess.
Dave Ramsey, huh? Okay. Hopefully that craze is over for you. It can be hard to separate the wheat from the chaff with radio finance folks, and to realize when the extremely generalized advice applies to you personally and when it doesn't. Dave says some good things that help some people, but much of it is irrelevant (or even bad advice) for others.

Paying off a low-rate mortgage is not something I'd usually advise, but many folks find it helps them sleep better at night. Not something to stress out over either way.

I might advise bumping up your emergency fund in these turbulent times though...
Yeah it does take some time to find out who to listen too but im glad i stumbled upon jack bogle/ bogleheads last year and started low cost indexing and getting my investments squared away. FYi i had an 5/1 arm adjustable not a good loan so that did help sway to pay it off.

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JoeRetire
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Re: Is 25 too young for paid off house?!

Post by JoeRetire » Fri Jul 31, 2020 12:07 pm

Unbrokenspark wrote:
Fri Jul 31, 2020 12:00 pm
FYi i had an 5/1 arm adjustable not a good loan so that did help sway to pay it off.
Had you asked, I would have advised getting a "good" loan rather than just paying it off. Oh well, don't stress out about it either way.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.

barnaclebob
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Re: Is 25 too young for paid off house?!

Post by barnaclebob » Fri Jul 31, 2020 12:24 pm

taking out a HELOC isn't worth it for a $65k house for leverage. Just keep investing and sleep well at night knowing you have good cashflow.

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JupiterJones
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Re: Is 25 too young for paid off house?!

Post by JupiterJones » Fri Jul 31, 2020 1:09 pm

lakpr wrote:
Fri Jul 31, 2020 10:07 am
JupiterJones wrote:
Fri Jul 31, 2020 8:40 am
Not owing money is sort of like a nice suit. It looks good on you no matter how old you are. :sharebeer
Beautiful word-smithy! I would like permission to steal your line above and reuse it, sir!
Granted. 8-)
Stay on target...

Humility101
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Re: Is 25 too young for paid off house?!

Post by Humility101 » Fri Jul 31, 2020 1:32 pm

As someone in a relatively similar situation (paid off home, six figure savings, six figure income, married 32, looked at a refi to invest., started a Bogleheads thread on it, lol) I would recommend keeping it the same as your username (unbroken).

It took me a few extra years and a few mistakes (ie fancy car), but it’s so worth it not having the extra stress and knowing you can set Financial success on cruise control. Don’t forget about spending money on things you are truly passionate about though. You’ve done well and should reward yourself. Don’t become frugal to the point of misery. Just don’t get caught up with the Joneses either.

Cheers,

Humility101

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JupiterJones
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Re: Is 25 too young for paid off house?!

Post by JupiterJones » Fri Jul 31, 2020 1:35 pm

Unbrokenspark wrote:
Fri Jul 31, 2020 11:40 am
We drank the dave ramsey cool aid..Nothing has changed really, Just want to be effecient as possible with our money I guess.
Ah, well then you also know what Dave always says to callers (and I often repeat here) about paying off their mortage: If you decide you don't like it, you can always get another mortgage. But I suspect the thought of going back into home debt after finally getting out of it would bother you a lot more than the second-guessing you're doing now. I suppose that's the point of the thought experiment. :D

Anyway, I get how it is to want to do the right thing when it comes to your money. But I would argue that "efficiency" is not the only thing that matters. Or if it is, there is more than one area in which to gain that efficiency.

An analogy I use sometimes is that of a plane taking off. There are all sorts of angles and airspeeds a pilot can use when taking off. Some might be more fuel-efficient. Some might use less runway or have a better chance of avoiding an obstacle at the end of it. Some might get you to your destination fastest.

But what pilots use most of the time is the airspeed that gets you as much altitude as you can, as quickly as possible (best rate-of-climb). For a plane, altitude equals safety, because the higher you are when something goes wrong, the more time and options you have. This prioritizes risk-reduction, perhaps at the expense of groundspeed and fuel efficiency, but I think you'd agree that the trade-off is worth it!

Same with your finances. Many people will argue that any scheme that doesn't eke out the highest possible monetary gain is inferior and left to those who let their emotions get the better of what's rational and "mathematically correct". But the way I see it, doing something like paying down low-interest debt instead of making leveraged investments is just as rational and mathematically correct.

It's merely optimizing something different. Not necessarily worse or better. Just different.
Stay on target...

IowaFarmBoy
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Re: Is 25 too young for paid off house?!

Post by IowaFarmBoy » Fri Jul 31, 2020 1:49 pm

sad2 wrote:
Thu Jul 30, 2020 8:05 pm
Is that a typo?

Are you missing a digit in the price of your house? $65k?

If not, I need to try some geographic arbitrage and move to Iowa.

I've heard of $10,000 houses in Detroit and other areas, but not in Iowa, which I heard is a nice place to live.

Time to move!
Puts me in mind of the famous line from Field of Dreams, "Is this Heaven? No, Iowa." Favorite movie line of many Iowans.

My parents retired from the farm to a small town in a pretty remote part of northern Iowa- not a lot of employment available in the area. About thirty years ago, the two BR 1920's style bungalow next door sold for $5-6,000 (yes cheaper than most used cars that BH buy). It was very dated and could use some modernization but it was structurally sound and very livable- nothing wrong with it. Maybe 1200 sq ft plus the basement. No idea what prices have done since.

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KingRiggs
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Re: Is 25 too young for paid off house?!

Post by KingRiggs » Fri Jul 31, 2020 1:53 pm

JupiterJones wrote:
Fri Jul 31, 2020 1:35 pm
Unbrokenspark wrote:
Fri Jul 31, 2020 11:40 am
We drank the dave ramsey cool aid..Nothing has changed really, Just want to be effecient as possible with our money I guess.
Ah, well then you also know what Dave always says to callers (and I often repeat here) about paying off their mortage: If you decide you don't like it, you can always get another mortgage. But I suspect the thought of going back into home debt after finally getting out of it would bother you a lot more than the second-guessing you're doing now. I suppose that's the point of the thought experiment. :D

Anyway, I get how it is to want to do the right thing when it comes to your money. But I would argue that "efficiency" is not the only thing that matters. Or if it is, there is more than one area in which to gain that efficiency.

An analogy I use sometimes is that of a plane taking off. There are all sorts of angles and airspeeds a pilot can use when taking off. Some might be more fuel-efficient. Some might use less runway or have a better chance of avoiding an obstacle at the end of it. Some might get you to your destination fastest.

But what pilots use most of the time is the airspeed that gets you as much altitude as you can, as quickly as possible (best rate-of-climb). For a plane, altitude equals safety, because the higher you are when something goes wrong, the more time and options you have. This prioritizes risk-reduction, perhaps at the expense of groundspeed and fuel efficiency, but I think you'd agree that the trade-off is worth it!

Same with your finances. Many people will argue that any scheme that doesn't eke out the highest possible monetary gain is inferior and left to those who let their emotions get the better of what's rational and "mathematically correct". But the way I see it, doing something like paying down low-interest debt instead of making leveraged investments is just as rational and mathematically correct.

It's merely optimizing something different. Not necessarily worse or better. Just different.
This post should be sticky-ed to the first page of the Bogleheads Forum...Bravo!
Advice = noun | Advise = verb | | Roth, not ROTH

MathWizard
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Re: Is 25 too young for paid off house?!

Post by MathWizard » Fri Jul 31, 2020 2:13 pm

sad2 wrote:
Thu Jul 30, 2020 8:05 pm
Is that a typo?

Are you missing a digit in the price of your house? $65k?

If not, I need to try some geographic arbitrage and move to Iowa.

I've heard of $10,000 houses in Detroit and other areas, but not in Iowa, which I heard is a nice place to live.

Time to move!
Note that salary is also $50K.

MathWizard
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Re: Is 25 too young for paid off house?!

Post by MathWizard » Fri Jul 31, 2020 2:18 pm

OP,

You are doing great.

Congratulations, you are way ahead of the game.
Don't let what might have been get in your way.

I could have invested in Apple when Jobs came back in 1996, when it's market cap was $3billion . Last I checked Apple was worth over a Trillion dollars.

Lots of opportunities that could have been, but I am doing well.

I think you are too.

GlacierRunner
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Re: Is 25 too young for paid off house?!

Post by GlacierRunner » Fri Jul 31, 2020 2:24 pm

Congratulations on the paid off house! This will enable you and your spouse to have flexibility going forward.

I would recommend not getting a mortgage on the house, build up your emergency fund (or source alternatives e.g. does your employer allow you to cash out leave?), and invest. It's a good idea to invest in yourself or your spouse too. Working on your professional development now may allow your to grow your income faster enabling you to invest even more.

hnd
Posts: 94
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Re: Is 25 too young for paid off house?!

Post by hnd » Fri Jul 31, 2020 2:30 pm

Unbrokenspark wrote:
Fri Jul 31, 2020 11:40 am
JoeRetire wrote:
Fri Jul 31, 2020 10:12 am
Unbrokenspark wrote:
Thu Jul 30, 2020 7:59 pm
I'm kind of stressing out on this subject, as if i missed out on funding more into my retirement accounts vs paying my house off last march.
Why stress out over something that's already over and done with? Assuming there is some reason you chose to pay off your mortgage, what has changed?
We drank the dave ramsey cool aid..Nothing has changed really, Just want to be effecient as possible with our money I guess.
the dave ramsey get out of debt advice is sound. You've turned to, imo, the most sound investing path. But with so little debt and expenses, you could maintain a 100/0 AA for years and reasonably justify it.

my dad is a marriage counselor. debt/money issues is one of the number 1 causes of marital issues. there are other things more important than returns in life.

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