September 15, 2020

Ep. 378: The Greatest Segment in the History of Our Show?!

39 minutes

HAVE A QUESTION? GET SOME EXPERT ANSWERS.EMAIL US: [email protected]

On this episode of the Pete the Planner Show, Pete and Damian, use 3/4 of the show to tell and answer ONE question and cover the greatest segment in the history of this show.

Don’t forget! HEY MONEY is your new secret weapon for advice in your personal finances.

No time to listen? BUMMER. Here’s some of what happened:

Show Notes:

Question 1:

“I’ve got an unusual conundrum. On a previous show, you said that a landscape artist shouldn’t aggressively pay off his mortgage during a pandemic. What if you already had the cash to do so? My wife and I bought our home 11 years ago with <10% down, 30-year mortgage, for more than half our take-home pay. We purchased a home we loved, in a location we loved, for a payment we could (barely) afford. Since, we’ve refinanced to a 3.15%, 15-year mortgage, which consumes about 30% of our net income. The balance is about $179K with a home value of $600K. During the last 10 years, we’ve saved and put about $650K into retirement vehicles, $55K in HSA, $60K into our kids’ 529 plans, and over $200K in savings and taxable brokerage accounts, and $25K emergency fund. We make about $180K/year and have no other debt. I’ve lost short, midterm faith in the markets – expecting a significant correction coming in the next 3-5 years. If we paid off our mortgage, we could boost our monthly brokerage account investment from $1K to $2800. I’ve thought this through. Should we liquidate some of our savings? What to do?“

Damian: There’s a compelling argument to sell off some securities and pay it off. There would also be some tax/capital gains consequences. Considering that, with the new free money each month, that could do so many things.

Pate: What, to the dollar, would be the tax bill for liquidating $179K from the $200K available? By freeing up that roughly 30% of their income each month, would they avoid lifestyle creep? What is the riskier move: pay it off and “outsmart the market” or ride out the 3.15% mortgage?

There’s so, so much more more on this deep conversation. Check out the full show to walk through it all with our hosts!

The Greatest Segment in the History of Our Show!

You’ve got to hear this to believe it. Seriously.

Click PLAY below for the full show!

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