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    Mortgage Free?

    I hope to have my mortgage paid off in 3 years or so which will free up $900/month.

    Question to those who no longer have a mortgage: What are you doing with the money that was used to pay the mortgage?

    I see myself DCA into stocks.

    Thanks in advance for your feedback.

    #2
    Simply more money going toward retirement.
    seek knowledge, not answers
    personal finance

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      #3
      We cleared our initial mortgage in 13 years and have remained mortgage free but there is no escaping municipal tax and insurance. We have always used the sum that went to principal and interest to fund several savings streams like each of our retirement plans, DSs college funds and most recently TFSA, the relatively new Canadian version of ROTH . When we bought the condo we considered reducing the sum saved to cover condo fees but they are reasonable and easily been cash flowed.
      I encourage you to make a plan and carry it out DCA into a reasonable split between cash, equities, bond funds and International funds. Just now were researching pharmaceutical stock and a Health & Science MF.

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        #4
        Almost all went to saving for other goals (with retirement being number one), and we plan on an early retirement (or at least an early semi-retirement). Giving/donating also increased slightly.

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          #5
          More towards retirement and having more fun.

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            #6
            Thanks to all who have replied.

            General consensus is to put more towards savings/retirement.

            Where do people stand on buying a vacation home ($200k or so) when the primary home is paid off?

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              #7
              Originally posted by Jluke View Post
              Thanks to all who have replied.

              General consensus is to put more towards savings/retirement.

              Where do people stand on buying a vacation home ($200k or so) when the primary home is paid off?
              Think the answer is it depends. How old are you? Are your retirement savings in line? Do you have the money for 20% down? How often will you use the vacation home? I think a lot of times people buy when they don't get there often enough to even justify it... sometimes makes more sense to rent when you travel.

              I don't think the board has a strong opinion one way or the other if you can afford it. For me personally, I would only buy a vacation home if it had the potential to earn me money and after extensive research I've concluded I'd never buy a vacation home as an investment. I'd rather invest in buy and hold real estate and use the income to travel, whether that be someplace different every year or the same spot year over year. But your motivation may be different and therefore your conclusion different as well.

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                #8
                Originally posted by riverwed070707 View Post
                Think the answer is it depends. How old are you? Are your retirement savings in line? Do you have the money for 20% down? How often will you use the vacation home? I think a lot of times people buy when they don't get there often enough to even justify it... sometimes makes more sense to rent when you travel.
                I'll be 41 or so when the primary mortgage is paid off in appx 3 years.

                I currently have 3x my gross salary in the 401k. Maxing out Roth starting this year.

                20% down, which I have now. It'd be great to rent it out at $2000/week in the summer, but I don't think I want other people in the property or the hassle of property management (myself or outsourced).

                I also see from my first home that they are a money pit (monthly utilities, upkeep, etc).

                However, I am looking for a positive perspective from anyone who has a vacation home (rental or non-rental).
                Last edited by Jluke; 07-21-2015, 06:32 AM.

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                  #9
                  Our plan is to buy a vacation/retirement property once our primary mortgage is paid off (less than 10 years, I'm 35 years old).

                  The "plan" is to find a property that we could use as a vacation home while still working and then once we retire we would live at the vacation home and rent out our current home for cash flow during retirement.

                  It's an idea at least.
                  Gunga galunga...gunga -- gunga galunga.

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                    #10
                    I recently got my mortgage paid off my plan now is to buy a rental property and add to my retirement.

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                      #11
                      Originally posted by Atretes1 View Post
                      I recently got my mortgage paid off my plan now is to buy a rental property and add to my retirement.
                      Congrats!
                      Kill the debt, before it kills you!

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                        #12
                        You need to research and understand all the ramifications of a vacation property. What are the tax consequences? How many days per year would you be in residence? After 10 years would you be seeking new destinations? What are your costs for professional management?

                        I'd never buy a vacation property because it's too much work. Friends who bought condos in AZ during the huge downturn are paying major sums for security and care during their absence. Several years they haven't been there at all with daughters getting married and parents passing unexpectedly leaving them to deal with preparing the house for sale and executor of estates. This year they have the added problem of our devalued currency so costs have exploded.

                        DH and I prefer to visit new destinations, try out new cultures and experiences. I am so grateful I didn't let the patter of salesmen convince me to 'invest.' The tax consequences alone would be a huge stressor. I've recently had a totally unanticipated, unexpected medical issue that will keep me in recovery mode for at least the next three months. No flying out of country, on my radar until after Christmas!

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                          #13
                          According to me, mortgages from credit unions are a great money saver. You really end up saving a lot.

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                            #14
                            I second the advice given by Snafu. The only way I would even consider buying a vacation property was if I planned on using the property often and if I was secure enough to shoulder any losses without devestating my finances. I would really have to be in love with area and the tax/fee implications would have to be minimal. Its important to remember what vacations are. Going on them is a luxury and its meant to be a relief from the stresses of life. I know people that are happy with their vacation home and others that hate it and wish they never bought the property. Of these people I would say the latter make up the majority. With that said those who are unhappy also did not put the time and effort into researching enough of the details.

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                              #15
                              We have a vacation home that we enjoy very much, have had for six years. However, we didn't have to leverage ourselves to do it, paid for most of it cash and took out a small mortgage which is now paid off.

                              It's a lake home in a beautiful area, and my daughter and family live close so we have reason to be there frequently. All work there is hired out. I've got enough upkeep work to do at home, so have no intention of working when I go there. We hire out; lawn care, snow removal, lawn sprinkler upkeep, dock and boat lift remove / install, boat storage, and all home maintenance such as; painting, driveway seal, and most recently a roof. That place has all the same bills we have at home; utilities, TV, internet, trash collection, etc., and taxes are also expensive.

                              We go there to relax, have fun and goof off, not to work. It wouldn't be much fun if we had to do chores every trip and had to stress over the cost of it.

                              Also a pretty safe investment. We will get our money back if we ever decide to sell it.

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