Chapter 19: Paying “Extra” On Your Loan – Mortgage Rigormortis!
Beware… This could be your biggest financial mistake!
Accelerated Loss of Your Tax Deduction
Loss of Your Liquidity
What is “Cheap Debt?”
The Realities of Retirement Can Be Negatively Affected By Paying Extra on Your Mortgage
- Establish an Emergency Fund. Have three to six months of income stashed in a savings account in case of ill-health, job loss, or disaster. We understand that it seems like a lot, but it’s an essential part of a fundamentally sound plan.
- Use time and consistency as your mantra for retirement savings. Substantial wealth can be accumulated over time with consistency in your investment habits. Start early and invest every month. It’s not a matter of where you invest, it’s that you make a habit—a discipline—of investing. You need to make a commitment to regular, monthly, investing. It’s not difficult. We can show you how. That’s how you win over time!
- Take advantage of the benefits of home ownership. There are many! (See the previous chapter, The Rational Renter vs. The Bold Buyer for more details.)
A Case Study
- Actually INCREASE the tax deduction (due to new amortization)
- Maintain exceptional liquidity.
- Dramatically lower her payments
- Increase her portfolio through additional return on investment