Grant Robinson wrote:
The mortgage calculator I was using puts that loan at $1073 a month P&I, but for the sake of argument, let's just assume that works out to be $1000 a month. Now, lets assume you take that $500 a month pre-payment, and invest it instead. Let's assume a modest growth rate of 10%, over the life of the loan (which now is ~15 years). At the end of 15 years, if you invest $500 a month earning 10% a year, your investment will be worth ~$210,000.00
Annual growth of 10% is a big assumption. How do you do that? Over the past five years, I've lost a little money in retirement investments and gained nothing substantial. My savings accounts and CDs have done better! I even got help from a financial advisor.
From what I can tell, making money as an investor requires a large time commitment. I know some investors, and reallocating investments is their full time job. They spend their time reading about their favorite companies and guess at the market's reaction to announcements. They look for ways to outsmart the market. If they skip a beat, they could lose a lot.
I couldn't match that kind of commitment without giving up things I like to do. Thus investing doesn't look like a productive use of my time, and paying off my house in a creative way looks like a very foolish idea.
Shane /* PLUG: http://plug.org, #utah on irc.freenode.net Unsubscribe: http://plug.org/mailman/options/plug Don't fear the penguin. */
