Forum Moderators: martinibuster
Don't you mean "guide ropes" I was a Boy Scout 'til I was expelled..............
(It is actually Guy Ropes)
Got a couple years worth of income stored away making lots of interest income.
Since that is taken care of time to pay off the car (my only 2 debts are the car and house).
When that is done feed the retirement account a bit better.
When that is done put away at least 20,000 per child in college investments and slowly add to it.
Pay off the house and buy the dream home in cash.
When that is done build more wealth and live life like no other!
I suspect it would take 2-3 more years to accomplish. But you never know what will happen. It is fun trying and at least I can say I gave my all and that I have taken a few years off of the "job - grind"!
I had just quit my job in a foreign country, moved back to my home country and was unemployed. The only thing I had to offer the bank when they were doing the credit evaluation was a printout of my adsense earnings screen. And they accepted it no problem.
And that explains why I am basically an Adsensophile despite my smart pricing ups and downs.
I asked this question because I don't see why I should pay installments on a house when I just buy it outright using adsense
I think it helps to compare what interest rate you get on your investments after taxes compared to what interest rate you are paying for your mortgage payments after taxes.
In the U.S. if you invest your Adsense or other investment money in a tax deferred 401k plan averaging 8% interest, or an investment property returning 10% taxable interest, and you have a mortgage loan at 6% interest before tax (say 3.5% after tax), then financially you would come out ahead putting the money in either the 401k or the investment property instead of paying off the mortgage.
In the U.S. if you invest your Adsense or other investment money in a tax deferred 401k plan averaging 8% interest, or an investment property returning 10% taxable interest, and you have a mortgage loan at 6% interest before tax (say 3.5% after tax), then financially you would come out ahead putting the money in either the 401k or the investment property instead of paying off the mortgage.
isn't here in the US you can only do investment on a property with after tax money? so your adsense income depending on your tax bracket is actually shrank quite a bit... but 401k/tax deferred ira is something...
isn't here in the US you can only do investment on a property with after tax money?
I didn't fill in all the numbers after tax in the example above.
You are still going to come out ahead if you can get 10% taxable income on an investment property than paying off a 6% tax deductible mortage. You have to compare the after tax difference in the rates.
In reality investment property has a lot of tax advantages, so you might not end up paying much tax at all.
If you had to decide between putting your money in a taxable money market account paying 4% or paying off your tax deductible mortage at 6% then, if you only look at the rates as a factor, you are better off paying off your mortgage. It just depends what alternative investment options you would have for the money.
This link explains it better:
[usatoday.com...]
Also if you live in an area with a lot of hard to insure for natural disasters and your house gets destroyed, you would no longer be able to get a loan for the equity in your home at a time when you might really need the cash.
The book Asset Protection by Adkisson and Riser also has a good review of when it is wise to pay off your mortage and when you may be better off not doing so, obviously they are reviewing it from an asset protection standpoint.
Some types of debt can be an asset if managed properly.
for example.. if you make $20K per month from adsense does it go down to $5k or fluctuations per month is only at about $1k-$2k difference?
I say about 15k if you plan on getting a mortgage and car that way if you do bad months and make only 8k you still have money to pay for them. My fluctation rate is around 10% but I balance my budget at a 35% rate to play it safe.
