^^ Yeah--all it really does is make the house a less attractive asset. A charging order against an LLC isn't any better. Just a way to try and lessen the damage if someone is sued over and above their policy limits.

The worst use of credit cards I've ever personally seen was by a fellow I dated when I was in college. He developed a nasty habit of pulling cash off credit cards and then going to the casino. He'd move those balances around and open and close cards. Needless to say, it wasn't a winning financial strategy.

 

Interesting topic that I've been working on myself lately. Like some others, we don't carry any debt on credit cards or car loans, just mortgages. We've borrowed against equity to purchase some investment properties and do some home improvements. I'm also considering stopping our current practice of paying extra on our 1st and redirecting some of that money into other investments.

The thought is, with interest rates on mortgages so low and being able to deduct the interest from taxes, it's a cheap source of money. For example, if you are paying 6% on your mortgage (which is closer to 4% considering reduced taxes) and you could invest part of your payment and earn a 10-12% return, you would be making 6-8% net. This would improve your overall financial position despite having more debt than if you applied the extra money towards your mortgage.

That approach makes sense, but i don't agree with the approach of keeping a mortgage so you can have a deduction. In other words, pay several $1000's a year so you can deduct part of that from taxes. HUH? Wouldn't you be better off not having the payment at all?

Anyways, sometimes this stuff makes my head spin around.

jd

 

^^^ That strategy will work only as long as you can actually make more money. If the investment goes south you are in much worse shape. Unless it is guaranteed (ie. CD) then you are gambling.

It all comes down to what odds you are willing to risk.

 

I don't really care about this subject, I was just wondering what the hell your new Avatar means Julie?

 

Last one was baseball, this one is F1. It's referring to Jensen Button. He drives BAR Honda's F1 car.

At least this time you weren't wondering if it was a pic of me!

I'm thinking about a new one and just wondering what I can choose that will stump, or otherwise entertain, LB... Maybe we can start a "guess my avatar game."

 

You'd stump me every time! I thought Jensen might have been your boyfriend or something. Thanks for the info.

 

Ok, LB. New avatar for me. No, that's not me with a beard wearing the hat. Don't know who it is, but the picture kinda cracks me up.

I hope the bloke in the hat didn't go into debt to buy/make it!

 

Julie,

Did you know Jenson Button is returning to BMW WilliamsF1 in 2005?

 

Since we're just a teeny bit ot, Julie, any chance you'll join us at FC04? It would be wonderful for all of the Vintage "pals" to get together and we'd just love it if you were there.

 

Yeah, realized last year we had enough money in our MM account (earning <1%) and were paying (6.5%) interest on our mortgage. Now we have -0- mortgage on our house

We also use a Bonus credit card for almost every expense, but pay it off every month.

Total family debt= zero, which gives a high sense of fiscal well-being...now that I'm in a consulting gig.

My advice to young people is always the same: Don't live on credit cards and set your standard of living below your income level Amazing that I finally agree with charley on something....