Intro
My large credit card debt is all at 0% APR interest, so don’t be alarmed. Please see my posts on taking advantage of no fee 0% APR balance transfers for more information. In short, I’m borrowing the money for “free” and keeping it in safe investments while earning me interest. Some recent examples are my $9,000 from Citibank and $10,000 from Discover Card.
Thoughts
Most of the gain this month is from stock market gains in our retirement accounts. We spent about $1000 for the deposit for our international trip this summer, otherwise the gain would have been nicer. Travel is our passion and our chosen luxury, so I feel no guilt over spending that much money on that. There is no way I’m going to look back later in life and say “Dude, that trip exploring Asia was a mistake”, unlike perhaps a luxury car or fancy widgets.
Looking at our goals, it just seems like time is just flying by. Soon we’ll be moving again, hopefully for the last time ever! My short-term goals for this month are to improve my time management skills, which hopefully translate into more money-earning opportunities as well.
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Where are you moving to? I’ve had several company relocations and it never gets any easier. On the positive side, it does help keep junk and clutter to a minimum.
where are you going in asia?
Let’s just say we’re staying in the West and it is an expensive place to live with great weather.
We’re going to China and Hong Kong this time. Next time it’s Southeast Asia, or maybe Egypt and safer parts of Africa.
Let me also add that the primary reason we are moving is to be close to family, as I know there are plenty of other good places to live that aren’t as expensive =)
Looks good. A 1.3% increase is pretty decent for one month. I still need to do that 0% APR balance transfer deal…and get some free money.
Hmm, your balance sheet got me thinking. Here’s the situation my wife and I face: I’ve got a $250,000 home mortgage at 4.875% interest for 15 years (12 years left). Our home is worth about $800K. I’ve just looked at my portfolio and I found that we have close to $145,000 in various cash and cash-equivalent accounts (like HSBC, sweep accounts, money market, etc.) (I didn’t realize it was that much in cash).
Do you think we should use some of our cash to pay down the mortgage? I figured at the most our cash was only earning 4.80% minus the effective tax rate of ~30%, or 3.36%. My mortgage interest rate is 4.875% minus the tax deduction which works out to be 3.41%.
If we prepay our mortgage but stay in our house, would we end up with no deductions left in a few years? Or buy a second home and then take the deductions then?
Any suggestions would be welcome.
Tim, I would suggest you move some of that cash to my retirement account as a sort of portfolio rebalancing (getting the balance of my account closer to yours). Let me know if that would help you any. 🙂
you should defenetly invest that money.
don’t buy another house please, if something you should sell your house, i don’t think it is a good idea to buy now, the real state market is going no where but south
Seneschal,
First you sound like you have a very good portfolio. Though I would definitly suggest placing those funds into retirement accounts or investing a bit of it.
As to your home, I would *not* suggest paying it off. Figure through the years, interest rates should continue to raise, and as long as your locked in (I hope) your savings will eventually overrun your mortgage rate, and all that money will be earning you better money even in simple savings. (1 year CD’s are at 5% anyways)
Also, I have to wonder what makes you think of buying another house? If you are doing it to have a true retirement or vacation home, then I can see that. But don’t buy it just for the deductions, it definitly is worth more to pay uncle sam some money, especially with the housing market fumbling around seemingly unsure of where it will go.
You want good tax advice, Have children! Hehe, actually it’s what we sometimes joke about to our clients. But obviously don’t incur any expenses (and children are definitly that – not to mention you sound like you’re past the phase-out amounts) *Insert Circular 230 Tax disclaimer here*