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Back, and winging it.

February 23rd, 2010 at 08:30 am

I sometimes like to convince myself that I have many years left to save for my retirement. I probably do -- 35 years or so at least. So, that's the excuse I give myself to just wing it when it comes to money; No penny pinching, no fiscal discipline, no keeping track of every single dollar I spent.

Yet, I have only 2 debts:
1) Mortgage (15 yr fixed rate at 4.5%)
2) Auto Loan (3 yr fixed rate at 5.0%)

I really don't consider my mortgage a real debt since I have about $40K equity in my home. But realistically I pay $400/mo in interest and $400/mo in taxes and insurance, which is really comparable to paying rent. So really I only have my car loan, which I hope to pay off in 12 months.

I do have a little bit of savings. I am still a bit skittish when it comes to stocks, so I never hold stocks very long, and so far, knock on wood, I haven't sold any stock at a loss, and only my mutual funds have lost money since I bought it but they're in my roth, so I won't sell those for a long time.
Cash: 51.7%
Stocks: 36.3%
Mutual Funds: 7.9%
CDs: 4.1%

2 Responses to “Back, and winging it.”

  1. Joan.of.the.Arch Says:

    Welcome back.
    I don't understand why you do not consider the mortgage to be debt. You pay $400 in interest on the debt, $400 on tax and insurance, and then I presume something is going to the principal of the loan. Do you mean just that you spend no more for housing than you would spend if you were renting, so the expense is unavoidable, one way or the other?

  2. Mulyanto Says:

    Correct. I see my mortgage as simply paying rent. Where I live rent for a 2BR apartment is $800-$1200. I have positive equity in my home (albeit a lot less than it used to be). $600 each month goes to principal. To buy a house was mostly a financial decision as opposed to a practical one. However, tax benefits have become very small with the 15 yr fixed mortgage, as our total interest tax/insurance is close to the standard deduction.

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