My partner and I just started reading the book “1929”, about the 1929 stock market crash. This is EXACTLY how the book starts out: talking about how the (at that time) largest bank in the country bought back a bunch of its own stock to support the price. I’m guessing it didn’t work out so well (but I need to read more to confirm).
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FYI - things are so obviously awesome that the totally natural and completely organic “market” action was the fifth most powerful collapse in volatility in history:
https://x.com/charliebilello/status/2045512279559410073
Before everyone gets too excited about all the abundance and prosperity headed our way that the “market” explosions are promising, take a careful look at the dates associated with other similarly sized Nasdaq advances:
https://x.com/modestproposal1/status/2045191192095162759
Hmmmm…1998, 2000, 2001, 2009, & March 2020…
I seem to recall those dates for some reason.
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If you can, just pay the damn thing off. There is more risk in the bank holding your money than your house being paid off.
If you pay off your house, you can build cash reserves that much faster.
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My thinking is different. During a crisis money becomes harder to come by. Reducing the needed outflow brings resilience. Staying debt so I can snap up a bargain some day of the world collapses is not part of my plan, however being debt free allows me such opportunities now.
A quick AI question revealed that the average $300k mortgage payment is one side or the other of $2000. per month.
At today’s interest rates one would need between $750K and $1million dollars in CDs to make $2000.00 each month. Due to income taxes on the interest, one would actually need more like 1.2-1.5 million to make enough money to pay the mortgage payment.
I would rather get that out of the way then build up a reserve using what I used to send to the mortgage company.
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In my mind, gold is money and in deflation cash is king. Look at 1930’s. Since then dollar has been a fiat substitute.
Yes you can have assets deflating while some are inflating. I’d play the current predominant cycle and allocate to that end.
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I’d not assume to pick the cycle. Buy things going up, sell things going down. Watch a 20 day price moving average cross a 50 day and the 50 cross the 200 day. Reverse for selling. If the 20 crosses 50, buy or sell, if 50 crosses 200 complete buy or sells. 20 is early warning, 50 is action, 200 is the long term trend.
I mixed here. I have a low fixed rate. I also did a 15 year last time I did a refi.
Principle - use debt for appreciating assets, cash for depreciating still makes sense. Timing this so far has been hard so…
I did a homestead declaration on the house. Maybe a protection, maybe not.
I have no money in the bank that holds the loan. So they can’t take my funds.
I pay extra each month as a hedge on the loan balance and note so in the memo line
I’m building cash reserves that can grow more than the low fixed loan rate.
I have my accounts set to be able to do transfers between then. If you setup, test them.
If there is a meltdown and the Great Taking becomes more probable, I’d pay loan off.
Brokerage to savings to bank check
Payments would need to be heavily documented with a bank check and registered letters.
When paid, I’ll move the property to a trust.