Financial question...

"Eisboch" <nothere.RemoveThis@nowhere.com> wrote in message
news:AbGdnYTdTPZMFDHVnZ2dnUVZ_tTinZ2d@giganews.com...
>
> "Vic Smith" <thismailautodeleted.RemoveThis@comcast.net> wrote in message
> news:o90pa4hc4t59oemqokugo5i2imt73tll51@4ax.com...
>> On Wed, 20 Aug 2008 16:33:11 -0400, John H.
>> <salmonremovebait@gmaildotcom> wrote:
>>
>>>On Wed, 20 Aug 2008 15:28:48 -0500, Vic Smith
>>><thismailautodeleted.RemoveThis@comcast.net> wrote:
>>>
>>>>On Wed, 20 Aug 2008 16:16:32 -0400, John H.
>>>><salmonremovebait@gmaildotcom> wrote:
>>>>
>>>>>Would it be a wise move to take out a loan on your home to buy stocks?
>>>>>
>>>>>Would it be a wise move to sell stocks to pay off a loan on your home?
>>>>
>>>>A lot has to do with your personal view on risk and holding debt.
>>>>Personally I hate any debt.
>>>>Since *nobody* can accurately predict what the stocks will do, it
>>>>comes down to that.
>>>>Well, I guess that was no help at all.
>>>>
>>>>--Vic
>>>
>>>When I bought the house, I was holding a lot of debt. I'm still holding
>>>some debt on the house.
>>
>> Taxes are tricky. I'd love to knock off the rest of my house debt,
>> but the tax hit in cashing in a CD doesn't give advantage.
>> If it was less than a grand costs I'd do it anyway, just to clear the
>> debt. Like I said, personal view.
>>
>> --Vic
>
>
> Having spent most of my life in debt, I don't understand why anyone wants
> or needs it (except banks) once they are in a position of paying it off.
>
> We own three houses and hold a mortgage for a forth (sold it and are
> acting as the "bank").
>
> We don't have any mortgage payments or debt. We pay credit card balances
> off every month.
>
> I've been advised that's bad because we don't get any tax advantages.
>
> But, to me, it isn't worth it. Why pay somebody interest, just to get a
> write off on income taxes that does not equal the interest paid?
>
> Eisboch
>
>
I made sure our house and vehicle were paid for before retiring.
The old van is gone now and I'll look carefully before buying new in March
when the Ranger pickup goes back off lease.
We don't get any type of tax shelter on our house mortgages, so it tends to
be a long tough slog.
 >> Stay informed about: Financial question... 

On Wed, 20 Aug 2008 18:39:32 -0400, BAR <screw DeleteThis @you.com> wrote:

>John H. wrote:
>> On Wed, 20 Aug 2008 17:30:52 -0400, "D.Duck" <Don DeleteThis @ld.duck> wrote:
>>
>>> "John H." <salmonremovebait@gmaildotcom> wrote in message
>>> news:jq2pa4d8shpinknirv7n8a5n1ji9itv7j4@4ax.com...
>>>> On Wed, 20 Aug 2008 17:11:53 -0400, "Eisboch" <nothere DeleteThis @nowhere.com> wrote:
>>>>
>>>>> "Vic Smith" <thismailautodeleted DeleteThis @comcast.net> wrote in message
>>>>> news:o90pa4hc4t59oemqokugo5i2imt73tll51@4ax.com...
>>>>>> On Wed, 20 Aug 2008 16:33:11 -0400, John H.
>>>>>> <salmonremovebait@gmaildotcom> wrote:
>>>>>>
>>>>>>> On Wed, 20 Aug 2008 15:28:48 -0500, Vic Smith
>>>>>>> <thismailautodeleted DeleteThis @comcast.net> wrote:
>>>>>>>
>>>>>>>> On Wed, 20 Aug 2008 16:16:32 -0400, John H.
>>>>>>>> <salmonremovebait@gmaildotcom> wrote:
>>>>>>>>
>>>>>>>>> Would it be a wise move to take out a loan on your home to buy stocks?
>>>>>>>>>
>>>>>>>>> Would it be a wise move to sell stocks to pay off a loan on your home?
>>>>>>>> A lot has to do with your personal view on risk and holding debt.
>>>>>>>> Personally I hate any debt.
>>>>>>>> Since *nobody* can accurately predict what the stocks will do, it
>>>>>>>> comes down to that.
>>>>>>>> Well, I guess that was no help at all.
>>>>>>>>
>>>>>>>> --Vic
>>>>>>> When I bought the house, I was holding a lot of debt. I'm still holding
>>>>>>> some debt on the house.
>>>>>> Taxes are tricky. I'd love to knock off the rest of my house debt,
>>>>>> but the tax hit in cashing in a CD doesn't give advantage.
>>>>>> If it was less than a grand costs I'd do it anyway, just to clear the
>>>>>> debt. Like I said, personal view.
>>>>>>
>>>>>> --Vic
>>>>>
>>>>> Having spent most of my life in debt, I don't understand why anyone wants
>>>>> or needs it (except banks) once they are in a position of paying it off.
>>>>>
>>>>> We own three houses and hold a mortgage for a forth (sold it and are
>>>>> acting
>>>>> as the "bank").
>>>>>
>>>>> We don't have any mortgage payments or debt. We pay credit card balances
>>>>> off every month.
>>>>>
>>>>> I've been advised that's bad because we don't get any tax advantages.
>>>>>
>>>>> But, to me, it isn't worth it. Why pay somebody interest, just to get a
>>>>> write off on income taxes that does not equal the interest paid?
>>>>>
>>>>> Eisboch
>>>>>
>>>>>
>>>> I've never understood the advice to pay interest for the tax break. Where
>>>> is the break in giving away $1 to get 30 cents back? Seems like 70 cents
>>>> got lost there somewhere.
>>>>
>>>> I can understand holding debt while building a savings account, but once
>>>> the cushion exists, I can't see the reason for it.
>>>> --
>>>> ** Good Day! **
>>>>
>>>> John H
>>> You're on the right track. When your nest egg is secured payoff all debt as
>>> soon as possible.
>>>
>>> The only debt I have now is to Circuit City for the HDTV we recently
>>> purchased. Reason, interest free for two years. The money stays in the
>>> money market account (earning interest) and is extracted 100 bux at a time
>>> each month.
>>>
>>
>> That's the way to do it. Hell, I put our travel trailer on VISA because I
>> get a 1.25% rebate on the purchases. The dealer didn't like it a bit,
>> 'cause I didn't tell him until after we'd negotiated a price, signed the
>> papers, and he said, "How would you like to finance this?"
>
>I have a credit card that has a 5.5% interest rate. Same rate as my home
>equity line of credit.

I don't know what the rate is on my card. Never paid any interest on it.
 >> Stay informed about: Financial question... 

On Wed, 20 Aug 2008 16:16:32 -0400, John H.
<salmonremovebait@gmaildotcom> wrote:

>Would it be a wise move to take out a loan on your home to buy stocks?

No.

>Would it be a wise move to sell stocks to pay off a loan on your home?

No.
 >> Stay informed about: Financial question... 

On Wed, 20 Aug 2008 20:34:15 GMT, Short Wave Sportfishing
<email.TakeThisOut@swsportsremove.org> wrote:

>On Wed, 20 Aug 2008 16:16:32 -0400, John H.
><salmonremovebait@gmaildotcom> wrote:
>
>>Would it be a wise move to take out a loan on your home to buy stocks?
>
>No.
>
>>Would it be a wise move to sell stocks to pay off a loan on your home?
>
>No.

You're sounding too much like McCain. A little explanation would be muchly
appreciated.

When I think of the future, re: the stock market, I see doom and gloom
because of rising oil demand and reduced oil supply. I see very few
businesses that aren't affected by oil costs. The market has not been
performing all that well, and I don't see anything on the horizon that may
help it. It's for damn sure the election of Obama wouldn't be a help to it.
--
** Good Day! **

John H
 >> Stay informed about: Financial question... 

On Aug 20, 8:27 pm, John H. <salmonremovebait@gmaildotcom> wrote:
> On Thu, 21 Aug 2008 00:18:07 GMT, Short Wave Sportfishing
>
>
>
> <em... RemoveThis @swsportsremove.org> wrote:
> >On Wed, 20 Aug 2008 16:40:58 -0400, John H.
> ><salmonremovebait@gmaildotcom> wrote:
>
> >>On Wed, 20 Aug 2008 20:34:15 GMT, Short Wave Sportfishing
> >><em... RemoveThis @swsportsremove.org> wrote:
>
> >>>On Wed, 20 Aug 2008 16:16:32 -0400, John H.
> >>><salmonremovebait@gmaildotcom> wrote:
>
> >>>>Would it be a wise move to take out a loan on your home to buy stocks?
>
> >>>No.
>
> >>>>Would it be a wise move to sell stocks to pay off a loan on your home?
>
> >>>No.
>
> >>You're sounding too much like McCain. A little explanation would be muchly
> >>appreciated.
>
> >>When I think of the future, re: the stock market, I see doom and gloom
> >>because of rising oil demand and reduced oil supply. I see very few
> >>businesses that aren't affected by oil costs. The market has not been
> >>performing all that well, and I don't see anything on the horizon that may
> >>help it. It's for damn sure the election of Obama wouldn't be a help to it.
>
> >Economies run in cycles and this is a cycle is which the wise choice
> >is to just sit on what you have and accept that things will improve in
> >time.
>
> >Europe is tanking, there are signs that India and China are on the
> >cusp of a major recession cycle and the only economy that still can
> >hold it's own against changing economic climates as evidenced by the
> >fact that we're still not bottoming out with a relatively strong GDP
> >compared to historical economic patterns.  This economy is positioned
> >to take advantage of the global down turn in economic activity.
>
> >Oil is still unsupportable at this level and will return to a more
> >rational and malleable $70-80/bbl range - perhaps not as quickly as I
> >thought, but certainly by December rather than October.  
>
> >The dollar has shown signs of strength against the Euro and the Pound
> >- it will quickly return to the harbor of refuge status because
> >Europe's economies are in a bind and cannot lower interest rates which
> >would cause major fluctuation with upward inflationary pressure if
> >they tried - and their inflation rate is currently hovering around 11%
> >in aggregate.  Twenty five point basis cut results in another 1.6%
> >rise in inflation year-over-year.  Can't do it.
>
> >Which means that we're in good shape nominally.
>
> >In uncertain times, at 5.18% compared to the running daily average as
> >of today of 6.93%, you've got a loan with cheap money at a rate that
> >won't be seen for another 15/20 years.
>
> >This does not mean that you should not take profits where you can and
> >if inclined, instead of investing them back, take a portion and pay
> >down house principle - that is always a smart idea. The rest can be
> >reinvested short term outside of securities. The key is to do it over
> >time with a long range goal rather than dumping everything.  Be
> >selective.
>
> >Lastly, understand that the big money is still sitting on the
> >sidelines neither selling or buying and holding what they have.  That
> >should tell you something.  Keeping yourself positioned and your
> >powder dry is the best bet.
>
> >Help out any?  :>)
>
> As a matter of fact, it does. I appreciate your reply very much. I must
> admit, you sound much like my broker. His advice is to leave the stocks
> alone. He says if I sell now, I'll really be sorry in a year. We'll see.
>
> Thanks again, Tom.

So let me get this straight......

You received advice from your broker about not cashing in your stocks
to pay off the house or refinancing your house to buy stocks. (sound
advice)

Most mature and educated adults would know the same.

You, however then questioned his/her advice by posting questions
regarding it on a boating NG.

A boating NG.

Eh?
 >> Stay informed about: Financial question... 

On Aug 20, 9:12 pm, Short Wave Sportfishing <em... DeleteThis @swsportsremove.org>
wrote:
> On Wed, 20 Aug 2008 20:27:53 -0400, John H.
>
> <salmonremovebait@gmaildotcom> wrote:
> >Thanks again, Tom.
>
> Anytime.
>
> My bill is in the mail - cash will be fine.  :>)

Make sure you get a receipt!
 >> Stay informed about: Financial question... 

On Wed, 20 Aug 2008 17:28:03 -0400, John H.
<salmonremovebait@gmaildotcom> wrote:

>I've never understood the advice to pay interest for the tax break. Where
>is the break in giving away $1 to get 30 cents back? Seems like 70 cents
>got lost there somewhere.
>
>I can understand holding debt while building a savings account, but once
>the cushion exists, I can't see the reason for it.

It's all a business decision. The interest you pay on a loan is the
cost of renting money. For certain types of loans like a home
mortgage or a broker's margin loan, you get to deduct the interest
payments. How much that deduction is worth depends on your tax
situation but the net effect is to reduce the effective cost of your
money "rental".

The next part of the equation is how much you can reasonably expect to
earn with the rented money. That depends on your skill as an investor
and what happens to the economy going forward. If you can reliably
make an annual return from your investments greater than youur
effective (after tax) cost of borrowing, then you come out ahead. The
downside is that if your investments don't work out you still owe the
money that you borrowed. That's the magic world of leverage,
wonderful on the way up, miserable going the other way.
 >> Stay informed about: Financial question... 

"D.Duck" <Don.DeleteThis@ld.duck> wrote in message
news:hcKdnVfUevI_ADHVnZ2dnUVZ_rHinZ2d@giganews.com...
>
> "John H." <salmonremovebait@gmaildotcom> wrote in message
> news:je6pa4pjra4mh3i64jpe2l7876uh2sdo6e@4ax.com...
>> On Wed, 20 Aug 2008 16:26:27 -0500, Vic Smith
>> <thismailautodeleted.DeleteThis@comcast.net> wrote:
>>
>>>On Wed, 20 Aug 2008 17:11:31 -0400, John H.
>>><salmonremovebait@gmaildotcom> wrote:
>>>
>>>
>>>>
>>>>I'm not talking about taking money out of savings (CDs), but about
>>>>selling
>>>>stocks. I believe the interest earned on CDs is taxable in the year
>>>>earned,
>>>>not when the CD matures.
>>>
>>>Yeah, but you have cap gains taxes on stock, no?
>>>I' was talking IRA CD's, which are taxed as current year income.
>>>Anyway, on the CD's, once you figure the tax hit and interest lost,
>>>and figure the interest saved on the home note, there you are.
>>>Easy.
>>>With your situation, there's the potential of the stocks to increase
>>>or decrease in value, and any known dividends. Future valuation
>>>can't be determined.
>>>One piece of advice I can give is "psychological."
>>>If you sell the stocks, don't bother checking their performance
>>>afterwards. It could hurt, or it could make you smile, but it doesn't
>>>matter. Every day is a new day.
>>>
>>>--Vic
>>
>> If stocks rise more than 5 1/8% per year, then selling would be a bad
>> idea.
>> (Actually, since the tax on capital gains is less than the tax on earned
>> interest, the % could be a little less.) The CDs I have are currently
>> doing
>> better than the interest rate I'm paying, so they won't be used.
>>
>> The decision is very dependant on what the future may hold for the stock
>> market.
>> --
>> ** Good Day! **
>>
>> John H
>
> Don't bet your farm on the Market. It runs in cycles and historically
> returns an *average* of about 10%/year. No one knows when the next
> up-cycle will begin.
>
> Not to worry though, according the Mayan calendar these problems will all
> be a mute point in 2012. 8>)

Dec 21 2012... and not only the myans came up with that time period.
The Chinese, a Sybol? in Greece etc.
We have four years and 4 months exactly.
 >> Stay informed about: Financial question... 

On Wed, 20 Aug 2008 20:48:11 -0400, Wayne.B
<waynebatrecdotboats RemoveThis @hotmail.com> wrote:

>On Wed, 20 Aug 2008 17:28:03 -0400, John H.
><salmonremovebait@gmaildotcom> wrote:
>
>>I've never understood the advice to pay interest for the tax break. Where
>>is the break in giving away $1 to get 30 cents back? Seems like 70 cents
>>got lost there somewhere.
>>
>>I can understand holding debt while building a savings account, but once
>>the cushion exists, I can't see the reason for it.
>
>It's all a business decision. The interest you pay on a loan is the
>cost of renting money. For certain types of loans like a home
>mortgage or a broker's margin loan, you get to deduct the interest
>payments. How much that deduction is worth depends on your tax
>situation but the net effect is to reduce the effective cost of your
>money "rental".
>
>The next part of the equation is how much you can reasonably expect to
>earn with the rented money. That depends on your skill as an investor
>and what happens to the economy going forward. If you can reliably
>make an annual return from your investments greater than youur
>effective (after tax) cost of borrowing, then you come out ahead. The
>downside is that if your investments don't work out you still owe the
>money that you borrowed. That's the magic world of leverage,
>wonderful on the way up, miserable going the other way.

Well yeah, but what do you see in the economy going forward?
 >> Stay informed about: Financial question... 

Clear the debt, use your fromer house payments to rebuild your stocks.

"John H." wrote:

> On Wed, 20 Aug 2008 15:45:17 -0500, Vic Smith
> <thismailautodeleted.RemoveThis@comcast.net> wrote:
>
> >On Wed, 20 Aug 2008 16:33:11 -0400, John H.
> ><salmonremovebait@gmaildotcom> wrote:
> >
> >>On Wed, 20 Aug 2008 15:28:48 -0500, Vic Smith
> >><thismailautodeleted.RemoveThis@comcast.net> wrote:
> >>
> >>>On Wed, 20 Aug 2008 16:16:32 -0400, John H.
> >>><salmonremovebait@gmaildotcom> wrote:
> >>>
> >>>>Would it be a wise move to take out a loan on your home to buy stocks?
> >>>>
> >>>>Would it be a wise move to sell stocks to pay off a loan on your home?
> >>>
> >>>A lot has to do with your personal view on risk and holding debt.
> >>>Personally I hate any debt.
> >>>Since *nobody* can accurately predict what the stocks will do, it
> >>>comes down to that.
> >>>Well, I guess that was no help at all.
> >>>
> >>>--Vic
> >>
> >>When I bought the house, I was holding a lot of debt. I'm still holding
> >>some debt on the house.
> >
> >Taxes are tricky. I'd love to knock off the rest of my house debt,
> >but the tax hit in cashing in a CD doesn't give advantage.
> >If it was less than a grand costs I'd do it anyway, just to clear the
> >debt. Like I said, personal view.
> >
> >--Vic
>
> I'm not talking about taking money out of savings (CDs), but about selling
> stocks. I believe the interest earned on CDs is taxable in the year earned,
> not when the CD matures.
> --
> ** Good Day! **
>
> John H
 >> Stay informed about: Financial question... 

On Wed, 20 Aug 2008 21:53:28 GMT, Bullschitter <Bullschitter.RemoveThis@hotmail.com>
wrote:

> Clear the debt, use your fromer house payments to rebuild your stocks.
That would be the idea. Or start giving the money to grandkids.
--
** Good Day! **

John H
 >> Stay informed about: Financial question... 

Blood suckers all of them. If your are smart enough to earn or otherwise
accumulate the dollars, why would you let a commissioned self serving leech spend
your money.

"John H." wrote:

> On Wed, 20 Aug 2008 17:02:22 -0400, "Eisboch" <nothere.DeleteThis@nowhere.com> wrote:
>
> >
> >"John H." <salmonremovebait@gmaildotcom> wrote in message
> >news:fb0pa49gljs7ocoo6p2bkpiahsadeam4f5@4ax.com...
> >> On Wed, 20 Aug 2008 16:34:07 -0400, "Eisboch" <nothere.DeleteThis@nowhere.com> wrote:
> >>
> >>>
> >>>"John H." <salmonremovebait@gmaildotcom> wrote in message
> >>>news:4quoa41puuqbj994ku7odcagectau76o3n@4ax.com...
> >>>
> >>>
> >>>
> >>>> Would it be a wise move to take out a loan on your home to buy stocks?
> >>>
> >>>Hell no!
> >>>
> >>>> Would it be a wise move to sell stocks to pay off a loan on your home?
> >>>
> >>>Possibly. Depends on the details of your situation.
> >>>
> >>>Eisboch
> >>>
> >>
> >> What details would be necessary? Perhaps a better idea of the details to
> >> consider would be of big help.
> >>
> >
> >Other than the cursory opinion I offered, I am in no position to advise
> >anybody on their personal finances.
> >
> >If you are serious, you should talk to a certified financial planner.
> >
> >Me? I avoid them at all "costs".
> >
> >Eisboch
> >
> The trouble with the certified financial planners all have something they
> want to sell.
>
> What I'm looking for are the criteria by which such a decision should be
> made, or even ideas.
> --
> ** Good Day! **
>
> John H
 >> Stay informed about: Financial question... 

On Wed, 20 Aug 2008 21:50:35 -0400, John H.
<salmonremovebait@gmaildotcom> wrote:

>Well yeah, but what do you see in the economy going forward?

No one knows for sure. Long term it always recovers but the timing is
uncertain as is the sector rotation. The keys to investment success
are not really a secret:

1. Good solid companies that have been around a while and pay
dividends.

2. A widely diversified portfolio.

3. A track record of competent management and building shareholder
value.

4. Good value vs assets and future income stream.

Trying to time market tops and bottoms is a risky game. Picking good
companies at a good value is easier. I continue to like the big
integrated oils over the long term as well as some of the exploration
and drilling companies. None of them will double your money in 6
months but you really shouldn't be trying to do that.
 >> Stay informed about: Financial question...