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84740296169 t1_jacr4fm wrote

Reply to comment by corumgold in Pay off the rental house mortgage or continue investing? by corumgold

Yearly Interest on $95k loan a year @ 2.625% = $2493.75

Yearly Interest on a Treasury bond earning 4.6% on $95k = $4350

Difference of $1876.25

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corumgold OP t1_jacrfci wrote

Thank you for this!!

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redditenjoyer737 t1_jacvgoo wrote

When you look back on your life and stack up all of your chips into retirement, is that $1,800 going to matter much in your net worth?

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corumgold OP t1_jacxqi1 wrote

Would you mind elaborating a bit more?

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redditenjoyer737 t1_jad2d42 wrote

As in what is going to matter more to you - an extra $1,800 or waking up knowing that each morning, that dirt under your feet is yours and yours alone and that you're no longer making payments on anything (except to Uncle Sam)

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84740296169 t1_jadxqfa wrote

That's just annual savings, in terms of present value (assuming he goest through the whole loan this way) it's about $10,000 in savings. PV of $800 payments a month for 11 ish years at 4.61% compared to $95000 on the loan.

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Jboycjf05 t1_jad4ffz wrote

That 1800 difference should be smaller. They would have an extra $800 of income each month that could be invested instead. So if you take that into account you're looking at like $300 a year in investment income, bringing the difference down to like $1500.

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