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Re: Here's an abrasive commentary for you.
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Tegir666
Re: Here's an abrasive commentary for you.
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Feb 1 08 10:19 AM
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If you look more than skin deep, to pay off the $500K mortgage (he wound up with 500K when he sold the house), he would have had to pay $71,000 per year toward the principle. That is after tax income. In addition, there would have been likely $10,000/yr interest for the first few years, and like $5000 to $10,000 a year in real estate taxes, plus $2000 a year in insurance. That is about $95,000 after tax income required. He would have had to be earning about $160,000 minimum per year, maybe more depending upon his state taxes. And that assumes he is living on about $2/day for food, entertainment, etc. A bit of a stretch to think that folks are going to be able to 'invest' 85% of their take home pay.
Plus have money to commute to work in his Jetta (which cost some money to keep, register, insure), and have a computer on which to post things like this (monthly charges).
I'm in his camp. I did pay off my mortgage in 7 years on the first townhouse, but it was $132K and was about 2.3 times my yearly income. I used some gains from stock market transactions to do it as well. My second house I had a 50% mortgage, which I also paid off in 7 years. But that house was 2.3 times my annual salary, and the mortgage was only 1.15 times my annual salary, so I wasn't putting 85% of my aftertax income into paying it off.
No debt, retired early, house paid for, cars paid for, and enough toys to keep me happy. No, I can't afford a $500K, but don't need one in TX. I got more house than I need for well under half that amount.
The economy depends upon willing consumers willing to consume, whether it be cigarettes, lottery tickets, beer, pretzels and junk food, buying 'stuff' at the Sprawl Mart, fancy cars, ATVs, boats, jet skis, ski vacations, safari vacations, Disneyland, Barbie Dolls, "transformers", Lionel trains, etc. 100 years ago, folks would get the Sears catalog all over America - the 'wish book'. Nothing changes except the mechanism to consume.
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