Debt Free next year? or invest?

[PierceFerdy]

As others have said, that cabin sounds like it's a disagreement away from a disaster. This from someone who worked in a family-run business for five years. Any return isn't near worth the kind of damage that can do to relationships.

*shudders*

Aside from that, as others have pointed out I'm not sure there's anything in your original post that would suggest to me that putting 'paying your mortgage on hold' is worthwhile. Get rid of that debt, free up the cash, and then go from there. At least, that's why I would do if I were in your - enviable - position.

[Fishindude77]

Go for debt free first, then to whatever please you after that.
When you get to debt free, you may just decide that you have all kinds of options for things to do with excess funds.

[scfr]

It sounds like you came up with a good plan for yourself, and now someone else's crises and/or poor planning are threatening to interfere with your plan and throw it off track.

I say stick to your plan. If you want to help your in-laws and have the means to do so, give them a financial gift* or a loan. But don't involve yourself in an overly complicated pseudo-investment.

*You mentioned budgeting 10% for giving. What about gifting what you have already budgeted to your in-laws if that would help them avoid catastrophe?

[Milly]

Thank you guys!

I'm still crunching numbers on the gold thing. I think we'd have to have around 8% inflation (in terms of gold) to offset a 4% premium on the gold (typical of gold eagles) and make it worth it.

I used excel to graph the daily gold data since 1991 (because that's as far as I could find) and put a exponential trend-line on it. That trendline says that we average around 7% return on gold. If you add in the fact that we were above the trendline in 1991, but below it today, maybe that bumps us up above 8% soon. Who knows how long it will be suppressed though. It's hard to say it will happen at the beginning of my 5 year mortgage plan and not at the end or even after.

There is tons of sentiment against the cabin idea. Basically, we are running the show. One family is bought in with legal fees fighting to get the cabin land separated so we could keep it on the river (lost). We are bought in with moving the cabin and drafting the addition/foundation design. One family is ready with capital for the foundation OR back taxes. One sibling has his own baby LLC so he neither has the time nor funds, but it is really important to him so he calls all the time trying to help. No one else is involved for now. Once the immediate work is done, we can work out the rest.

I imagine it working out about like this: Most of the families don't want to be part of the cabin. They will just pay as they use. They will still get priority use and a discount though because they are family. If anyone wants to get in, they can just start paying the taxes or buy something major like a furnace.

The problem is if someday we actually make money. If it ever gets to where paying the taxes on the cabin gets you more returns than it costs, we'll have to rethink it so that it is fair to all of the members who took risk at the beginning. Since all of the purchases and labor/technical hours spent are dated in a spreadsheet, maybe we could put in an inflationary aspect and make early money worth more?

I'll just be happy to get to that point. For now, it is going to be a major money sink hole. It's a sink hole I want to be part of though. I am so excited to get that cabin in order. We talk about it every single year and now that it is on a property with a clear title, we can finally do it! Also, the experience it buys us with my father in law is irreplaceable.

[Milly]

Oh, and if anyone is curious, the trendline on silver is about 8% from June 1991 till end of 2017. I was too lazy to hunt down and update the info from this year.

[disneysteve]

The problem is if someday we actually make money. If it ever gets to where paying the taxes on the cabin gets you more returns than it costs, we'll have to rethink it so that it is fair to all of the members who took risk at the beginning.

All of the financial details need to be nailed down up front to minimize the potential of future arguments.

Do you have a good contract attorney involved in setting this up?

[james.hendrickson]

Thank you guys!

I'm still crunching numbers on the gold thing. I think we'd have to have around 8% inflation (in terms of gold) to offset a 4% premium on the gold (typical of gold eagles) and make it worth it.

Milly - could you show us the numbers? Several of the gold investors here, myself included, might find the analysis of interest.