cover of episode Loan Pay Down vs Starting Brokerage

Loan Pay Down vs Starting Brokerage

2024/11/13
logo of podcast Jill on Money with Jill Schlesinger

Jill on Money with Jill Schlesinger

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D
Denny
J
Jill
获得艾美奖和格蕾西奖的商业分析师,主持“Jill on Money”播客和广播秀。
M
Mark
从破产公司到上市企业的成功转型和多个子公司的建立
Topics
Denny夫妇面临房屋装修贷款(12.5万美元,6.5%利率,10年期)的还款问题,以及是否应该优先偿还贷款还是投资理财。他们目前兼职工作,月收入约1.4万美元,但过去几年收入在1.4万到2万美元之间波动。他们已经最大限度地使用了Roth IRA,账户中有约30万美元,传统税收优惠账户和股票账户各有约5万美元。每月结余约1000美元,扣除贷款后还有约2000美元。他们需要在偿还高息贷款和为未来(子女教育等)进行投资之间取得平衡。 Jill建议Denny夫妇将每月结余的资金一部分用于偿还贷款,一部分用于投资。她认为6.5%的贷款利率相对较高,值得优先偿还一部分。同时,她也建议他们开设经纪账户进行投资,以获得更大的灵活性,应对未来可能出现的资金需求。她还建议考虑设立529教育储蓄账户,以获得税收优惠。 Mark也同意Jill的观点,认为6.5%的贷款利率值得关注。他建议Denny夫妇根据自身风险承受能力和财务目标,在偿还贷款和投资之间找到平衡点。他计算出如果每月额外偿还1000美元贷款,可以提前5年还清。他还强调了529教育储蓄账户的税收优惠优势。

Deep Dive

Chapters
Denny and his wife are deciding whether to pay down their 6.5% fixed rate home equity loan or start a brokerage account for future financial goals.
  • Denny and his wife have a 6.5% fixed rate home equity loan for $125,000.
  • They are considering whether to focus on paying off the loan or starting a brokerage account.
  • The loan is for home renovations, including a new kitchen and bathroom.

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Welcome to the drill on money show its wednesday, november thirteen. And we are here trying to help you make Better, less bad, more considered financial decisions. Now sometimes those decisions come up and they sort of spring up on you, and it's hard to get a grip on that when that happens by surprise.

Sometimes it's the long standing plan and something is altered. But whatever is going on in your life that touches your money, we want to know how we can help you get where you want to go with is little risk or as much risk as you want. It's all about you.

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I think it's going to be a great session. okay? Today we are joined by Denny, who is on the line from pennsylvania. Hi, danny. What's up?

Yeah, guys sure.

Whats going on? How can we help you out?

hi. So my my wife, our family, we are we have decided to do some major renovations on our home. We took out A X rate home one, six and a half cent, and our payment paid over the next ten years, our payments about twelve, fifty, five hundred a month.

And we are struggling with, do we build up our brother for future years? Do we address paid on alone based on the interest? Or do we do a hybrid of both?

Oh, okay, I love this question. What are you doing? Don't tell me a pool.

I always hate that. That's like a boring project to me. I hope you're adding like a big room or something.

Now we already have a pool. Actually, we we are. My wife has the world small kitchen, and he deserves a little bit, a bit kitchen. We're going to the bathroom in the bedroom.

This a big project. So how much what is the amount that you barred for the loan?

One hundred and twenty five.

okay. And what's the house worth right .

now as is about six hundred?

And is there an existing mortgage on IT?

There is about three fifty at four and half percent.

Are you guys both working full time?

Um my wife and both were part .

time actually oh both part time. What's the combined income .

right now just based on the part time hours is one forty, but yeah the past couple years is anywhere between one forty and two hundred as long as I stay below the rough limit is.

what is so funny? How old are you, donny? thirty? And how old is your wife? Thirty four are right. kid.

We have a five, six year old girls and a four months old boy. 喂喂喂, what did you just say? We have a five year old and six.

I thought you, okay, wait, I literally thought you said I have five, six .

year old.

a five year old, a six year old.

And what was the third? Oh, boy.

okay. Um okay. So tell me a little bit about how much money you saved on your incomes.

So right now, we both max a rough. We are contributing to get the match for three bees, and we are maxing out a family.

Okay, how much money is in the rough? You can do a combined, or each one whatever you like.

Everything that is rough, we have about three hundred in.

okay.

fifty in traditional, whether is a match or before the rough. And then in s day, we have about fifty total.

How are you doing living on your part time on the one forty?

So we're doing okay. It's kind of how we base our our our budget were both fruit people. So so after the expenses and after contributing to the rough, we have a little a bit over a thousand left over on the part time work. But O O K, I haven't work part time only hours in the past ten years of extra tra hours. So very, very m okay.

So Denny, let me, let me understand this. When you say you have a thousand dollars amount left over, does that include the extra thirteen hundred dollars a month for alone payment .

that is not including that?

okay. Are you planning to pull back on any of your saving during this period of time?

Not necessarily. What I will say is when I look at my you know my spread sheet of my expenses and my our income, I only I only use our part time wages. I have not worked my minimum twenty four hours a week again in ten years. So realistically, IT looks around ten thousand a months for income verses eight thousand. So problem.

So what you're saying is you're gonna just crank IT up workplace SE. Yeah.

important thing you doing what I been going.

okay. So have you saved any money for the kids? Is that an important part of this or not?

Um we've kindly decided to leave more flexibility eventually some type of age or assist them, but they will have to work through college.

Well, okay, got IT. As you look ahead and you said, you come on and you say to me, pay down this six and a half percent loan or do something else, i'm wondering this. I'm kind of looking at A I like the combination.

So I mean, six and a half percent as a guarantee is pretty good. I guess if i'm looking at this, I would like to do the some combination of three things, the routh, the H. S.

A. And the loan. That's what i'm if. So if you said to me I got nine hundred box every month to play with, that's how I would do IT an extra three hundred on the fix straight fund, the rough fund, the age.

I said, I mean, you can, are you? You get some match for the four or three? B.

yeah, it's two percent.

And how much you contributing right now?

So I contribute four percent. They contribute half a percent up to four percent.

okay? So you're not going to pull that back. So you're gonna keep doing that.

I mean, I would do something, then I would just split IT. I mean, you're not going to pull back on the four percent match. Obviously, I think I would do a combination mark. What do you think do you think that six and a half percent is of chunky enough interest rate that IT demands paying down a little bit quicker? Or do you think we should just forget about and let IT roll?

It's only ten years. I know. I know. So like mortgage and this is only one hundred and twenty five thousand is no other the rows in what you have in your four, three bees that's IT for your assets? There's no like stock pile of cash somewhere.

Now just just emergency. My biggest concern is, right, like last month we had twenty five hundred to three thousand left over. So if I have three thousand, I pay twelve fifty to my loan paid down and I have you two grand left over.

I to opi to open a breakage account.

like do I put a thousand eight thousand extra pay down? And the difference.

that's what i'm thinking. I think you're going to feel Better. I think you don't like this.

Debt are getting that sense right? percent. yeah. I think I think it's a split. I think that I think opening a broker account is good for you guys because you're so Young, you're not in a high tax bracket right now.

And I think that you know that gives you flexibility, as you said, if you like, if the five year old ends up like killing IT and says, ah you know I got into pen and you know I can I can use some extra help and you want to help the five year old find if the six year old roads like the party party kid and it's like, uh, i'm going into a pen state and you're like something seems like that's a nice party school but like I don't if I want to pay as much for that, like you can make a decision, but you have the brokers account give you that flexibility. And if you do think if you really think you'd like to help the kids with education, I would open those five twenty nine accounts because doesn't pencillings in. I have a good five twenty memory.

You get a state income texted. I think you could get a small one. Yeah so that's worth considering, at least for you know again, a nominal amount of money doesn't have to be now IT could be that you do IT in a few years.

You kind of see like if all the sudden in your income is not one forty, it's really closer to two hundred and IT goes up a little bit every year and you say, I got I got more money left over. I love the broker account for flexibility, but the problem I have with a broker account is that the tax treatment of that brokers account is not as good as a five twenty nine plan. And so if you really do think you're going to spend some money towards college, IT would be nice to have that beautiful tax treatment of that asset.

I'm sure you already know this because you are numbers nerd, but if you just throw a thousand dollars a month extra at the loan, you going to check IT in hand, you going to knock five years off. So I, you know, I am OK do. No, you can just started next thousand at the one and then put whatever else you have. You broken age five, twenty nine? Yes, it's a short alone.

absolutely. And I think you're in great shape now. Three kids, do you have your state .

documents done?

OK, I knew you. What about life insurance? What do we got?

I got .

plenty.

yeah. We have, we have a couple coach friends who are widowers, and there are agent, so like to hate you hard and you you, you feel IT. And so yeah, we've we've been on that train.

Oh my god, i'm so sorry. That's that's a lot. That is a lot. So Young, you guys are I think you guys are in great shape.

I hope you enjoy your new kitchen um and the bathroom and whatever else. And I don't know about of I like the pool in pensylvania. Like how many days do you really get to use that pool? It's either got awful hot. Or it's like winter. So how many days here do you think you really use to give me the real a number here?

So we've lived for two years, so my kids are still in the you know the honeyman phase of a pool. So it's probably at least half of the days in the summer time. Oh.

that's good. That's good.

yeah. And and you are very outgoing people, so we have people over probably every day. So i'd say half the days in the summer and you know the kids, they don't care you, they that's true.

More can i'll be there, just tell us when that barbecue is fired up, will be down. Just get hop on a train. We will be right there.

Be great. I'm okay, danny. Anything else for us to worry about for you guys?

No, I think that's all I have for you guys today.

fantastic. Thanks so much for getting in touch with us. How about that? Uh, hundred twenty five thousand dollars fixed rate law IT just shows you that people have needs and they're not putting off any further these these grand plans for a house and uh, you know, doing an expansion.

And if that's you if you really need some help kind of figuring out whether or not to do IT look at down y and his wife, thirty four years old, like, let's take alone, let's do this stuff we want to do will keep funding all the other these other goals and and they're on track. So don't be too spooked. I know we can go back in time.

Oh, I wish I had a lower mortgage interest rate. I wish I had a lower loan rate. You don't. So let's figure out how to make this work in your life. So give us a hello, go to drill on money, 点 com, click the contact us, but write is a note.

And of course, if you would be willing to come on the air, which just had you check the box, and mark will do everything else, don't forget to sign for the free weekly newsletter. Check out our youtube show. It's called jill on money powered by the compound.

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And of course, try to do something nice for someone else today. Change your work, change your wealth, change your life. Thanks for listening. We will talk you tomorrow.

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