Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84; site aplvax.UUCP Path: utzoo!watmath!clyde!burl!ulysses!ucbvax!decvax!decuac!aplvax!ded From: ded@aplvax.UUCP (Don E. Davis) Newsgroups: net.invest Subject: A penny saved... Message-ID: <161@aplvax.UUCP> Date: Tue, 1-Oct-85 16:22:08 EDT Article-I.D.: aplvax.161 Posted: Tue Oct 1 16:22:08 1985 Date-Received: Fri, 4-Oct-85 03:15:20 EDT Reply-To: ded@aplvax.UUCP (Don E. Davis) Distribution: net Organization: JHU/Applied Physics Lab, Laurel, MD Lines: 18 I've been adding an extra $100 to my mortgage payment every month. Ignoring taxes, this is the same as investing this money at 12.5% (my mortgage rate). A pretty fair return (and the money in effect is insured!), but of course it gets locked up in equity, so if interest rates suddenly jump to 20% I'll miss the boat. Here is an alternative I've been considering. What if instead I add the $100 to my car payment (also a 12.5% loan). After the loan is paid off I will continue to make the payment (plus the extra $100) to a savings account so I can buy my next car with cash, thereby saving on the interest. Is this second scenario preferable to the first? -- Don Davis JHU/APL ...decvax!harpo!seismo!umcp-cs!aplvax!ded ...rlgvax!cvl!umcp-cs!aplvax!ded