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Post by Erich on Apr 24, 2008 10:26:34 GMT -5
As indicated this board is new and will be used for sharing anything worthwhile that we've come across in our lives.
I am going to start it off by sharing info that I was given by a very successful business person...
NEVER PAY OFF YOUR MORTGAGE... Here is why:
A high mortgage protects you from lawsuits and other creditors- they cannot take your home if the bank really owns it AND... Borrow your equity and reinvest it. Chances are your investments can earn you more than the additional cost of your mortgage, putting more cash in your pocket. The tax advantages are worth the risk....
Another tip for Online Income Earners...
You can pay your child or children up to $4400 per year without the child owing any taxes... and without you having to withhold.. Use $2000 of this every year to invest in a ROTH IRA for your child. No taxes will be due when withdrawn, either. Use the other $2400 to cover school clothing or other items your child needs anyway. Meanwhile, you take a $4400 deduction off your taxes for the salary to your child...
Erich
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Post by Sandi Moses on Apr 25, 2008 8:59:30 GMT -5
As indicated this board is new and will be used for sharing anything worthwhile that we've come across in our lives. I am going to start it off by sharing info that I was given by a very successful business person... NEVER PAY OFF YOUR MORTGAGE... Here is why: A high mortgage protects you from lawsuits and other creditors- they cannot take your home if the bank really owns it AND... Borrow your equity and reinvest it. Chances are your investments can earn you more than the additional cost of your mortgage, putting more cash in your pocket. The tax advantages are worth the risk.... Erich Interesting.
A local Christian financial advisor takes a different approach. He advises to get completely and totally out of debt ASAP - including your mortgage. Have only expenses to pay - never debts. His reasoning is that if you are in the 28% tax bracket, for every dollar of interest you pay the mortgage company and can write off, you get 28 cents back from the IRS. If you pay off the loan, yes you owe the IRS the 28 cents, but you get to keep the other 72 cents. Which would you rather have? 28 cents or 72 cents? Who will put it to better use? You, or the mortgage company? Use the 72 cents to invest or donate to charity or just enjoy life.
If you have investments or other assets that require protection from lawsuits, there are ways to do that without being in debt. If you are not in debt, you have no creditors to deal with.
Sandi
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Post by Sandi Moses on Apr 25, 2008 9:06:30 GMT -5
Another tip for Online Income Earners... You can pay your child or children up to $4400 per year without the child owing any taxes... and without you having to withhold.. Use $2000 of this every year to invest in a ROTH IRA for your child. No taxes will be due when withdrawn, either. Use the other $2400 to cover school clothing or other items your child needs anyway. Meanwhile, you take a $4400 deduction off your taxes for the salary to your child... Erich Someone I used to work with benefited greatly from a similar rule several years ago. At that time (and it may still be that way - I don't know) people could donate up to $10,000 to family members and write it off. The recipient did not have to claim it. This guy's sister is married to a VERY wealthy family (you all would recognize the name) and everyone benefited when that transaction happened.
Sandi
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Post by Erich on Apr 25, 2008 10:05:17 GMT -5
Yes there are obviously different viewpoints on how to best benefit from your home mortgage or non-mortgage. I personally have mine paid off simply because I don't like paying interest of any kind. But my sister who is a financial planner with New York Life says there are better ways including the above....
My wifes family "gifted" her $10k for a few years after her father died but the gifts were in stocks.... not cash. I believe the IRS allows up to this amount without paying taxes...
Erich
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Post by maggiemae on May 21, 2008 0:35:47 GMT -5
There is a life insurance policy I read about It is a variant of a whole life policy and the life portion of it is minimal. You would have to ask a pro about it, but the object is to build up a fund then borrow against it. You still have life coverage and continue to contribute and pay back your loan. Of course, I can't remember the name of the financial planner nor the type of policy. You basically cut the banks out of the loop. It was touted as great for financing cars or university education for children, I was only interested because my son lives in San Diego. As far as I could tell the policies are not available in Canada.
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