Started my first business at 15. True stories of debt & financial wins. No get rich quick schemes, real lessons to help you win with money.
Joined March 2023
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Would love to check this out youtube.com/@baileygrady?si=…
2 year treasuries on $300k doesn't yield $15k to cover the entire mortgage after 30% taxes....if you know some 7% treasuries let me know
He get back $15,600 a year in cash flow.
Meaning he would have to generate 5.2% a year + 30% tax = 7.4% interest per year to cover the entirety of the mortgage (principal + interest)
or 4.64% for just the interest portion.
Are there ways to generate higher returns out there? Yes. Are they risk free? No.
If this is 100% of his liquidity with no emergency fund, not smart, but if you have the liquidity to pay $300k off I'd assume there is other cash else where.
$15k a year that can go to living and enjoying life!
Bailey Grady | Debt Confessions retweeted
I wish I knew this 10 years ago...
your 20's are the best 10 years of compound growth you'll ever have
here's an example:
If you start at 20, put $250 a month into an account at 7% growth per year - you will have $598,905.34 by the time you're 60.
If you start at 30, put $250 a month into an account at 7% growth per year - you will have $283,382.36 by the time you're 60.
See the difference those 10 years make?
(images below show difference of an average of 5,7,9% YoY compound growth)
Even if someone sat little jimbo down at 20, showed me how to open an account and said: "just put 10% of what you earn in here and you'll be laughing"
but I didn't have any direction or guidance
I'm only REALLY learning a lot about finance and investing now, and felt the need to share.
7% return is conservative for the S&P500 too.
Plus there are a bunch of other tax-free ways to invest part of your earnings as well.
Would highly recommend checking out @baileygradyshow @sircalebhammer and @DaveRamsey
Sharing because I wish someone told me.
But if you are investing and not spending the money you would be using to pay down the mortgage, in theory should not make a huge difference, the issue is when people spend everything and don't invest or pay it down
with a 5.5% interest rate, you would need to return 7.3%+ a year after taxes which is very possible to happen over long period of time. But I would be hitting the main retirement accounts in 401ks with match and Roth and then start making headway on the loan.