money
 

Hello to all,
I found this forum three years ago after being diagnosed with PD and at the time thought, "What a godsend!" I had so many questions and received many wonderful, helpful answers. Some of them came from RFK, cs, MK2, GregD, rosebub,wendy and several other people whose names did not print out clearly.
Last night I re-read all those answers and quickly realized that this forum is the perfect place to go with my next question.
My life has changed a bit...I am still active, but definitely pick and choose what I do, rather than try to do it all. My meds have gotten more complicated. But on the plus side, I sold my albatross (sort of) house, and have downsized to a house I love. I am now 5 minutes from my daughter, my son has gotten married and now all I want is some grandchildren. :)
My question is financial and I'm sure there are some very smart people out there who came give me some advice. My "new" house cost more than I realized from the sale of the old house. But with the profit left over and some prior savings, I could almost pay off the entire new mortgage. On the other hand, I can afford the new mortgage with my pension and social security without feeling deprived.
I hate debt and felt so free when I paid off the mortgage on the old house (after living there for 29 years). I wanted to travel and not have to be so thrifty. 33 years on a teacher's salary really limits your llifestye and suddenly I felt rich! No mortgage payment, so lots of extra $$ every month!
Then the PD diagnosis comes along and screws it all up. I still had plans to refinance the new mortgage so my monthly payment would be less but then I started thinking. If I can afford the new payment (which seems so high to me compared to my old house...kind of painful to shell that out every month), why not just keep that big profit somewhere and use IT to travel with, etc. ? The interest alone would be pretty good and the mortgage interest is tax deductible. Why would I want to pay down or pay in full the new mortgage when I won't be living here in 20-30 years because of the PD? My children don't need the inheritance and I'm beginning to think I deserve to benefit from all this. I'm 61, by the way, and am told I have lots of "good" years left.
Sorry this is so long. I have been thinking about this for months and realized this forum, better than any financial planner, would understand how it feels to have PD and could really empathise with my situation.
Oh, and one more thing. If you advise me to keep the loot, what should I do with it? It's under $100,000. ING? I don't want to fool with the stock market. Bonds? CD's?
Sorry this is so long but I have thinking about it for weeks and am excited to finally realize where I hopefully can get some good advice.
Thank you!
Kassie

Pd brings with it a number of situations, of all kinds..I wouldnt put a number on the time that you will be able to stay in your new house, but as long as you can afford the mortgage, and you've got a few bucks to enjoy yourself, that sounds good to me..Im not a great financial planner, but at this stage in the game for me, I plan on enjoying the things I like to do while I can..I would put some money in CD's, or something guarenteed..I can tell you this with great confidence though..Do not put any in the stock market if you dont know anything about the market..Right now the market is not a good investment..It is to chaotic and unpredictable..Actually, without any experience, the stock market is a bad neighborhood even when it is prosperous

Great problem to have
 

Just some random thoughts-

"Own nothing. Control everything." - John D. Rockefeller
That is just a way of saying that debt is not necessarily bad so long as it is the right kind of debt. The right kind pays for itself and leaves something for you too.

"Rich Dad, Poor Dad" makes a similar point. If you want a new car, buy a lawnmower. That was the advice to a teenager. By mowing lawns he made the payments on the car, had a little left for gas, and when the car was paid for he still had the mower.

These are crazy times. The stock market is no place to be. Things like gold and wheat futures are better but only if you are trying to preserve wealth. You are going for income.

Here is my advice. Do in the order indicated:
1) Stockpile medication. This is our weak point. Asmuch as you can without it going bad. Mucuna too.
2) "Canned goods and shotgun shells." Not being entirely flippant there. Depends on where you are and your mindset.
3) Get rid of your credit card debt. Bad debt to a bunch of vampires.
4) The easy part is over. I would invest the rest in cheap rental property. Cheap is a relative term. I don't mean inner city nightmares. Think of where the blue collar renters in your area live. In my area that means trailers, but yours might be apartments or small houses or even duplexes. These entry-level shelters should be stable in most economies. Pay as little down as possible but be sure that it will pay for itself and leave some for you. To do that you will need some help. Get out the phone book and look for "Property Management" companies and make appointments with half a dozen. One of those is going to look after everything for you while you travel or whatever. In return, you get to pick their brains to learn as much as possible. If they act like they have no time for you, blow them off. If they go out of their way to help, make note.

Be aware of the economy of size. Ten mobile homes may not make the numbers work but twenty might. Figure on taking three months to learn. You can do it sooner, but don't rush it.

Also, you might want to read up on reverse mortgages.

Some expert advice
 

I agree with Steve that unless you know what you're doing, the stock market is a wild jungle. Mutual funds rated as low-risk are about as far as I want to go.

Your dilemma seems to be a trade-off between dollars and feelings.

Paying down the mortgage might make you feel "secure," but:
(1) you lose a tax deduction on the interest you pay on the mortgage,
(2) you put the money where you can't get at it again without selling the house, whereas with other investments you can get the money again if there's a disaster,
(3) if real estate values crash in your area, you own a building worth far less than you paid for it,
(4) if real estate values do not crash in your area, the payment will soon seem like a small one (like the payment for your old house seems now), and the value of the building will depend on more than your efforts--you're risking that no neighbor starts working on motorcycles or shooting at tin cans in the front yard,
(5) you still benefit if the value of the house increases, whether you own 20% or 100%.

I got these ideas from the following links, but I was skimming, so check them out for yourself.

Kiplinger investment advice: Pay off the mortgage or invest?
http://www.kiplinger.com/columns/ask...2006/q0706.htm

Beginner's Investing: Pay Off Your Debt or Invest?
http://beginnersinvest.about.com/cs/.../a/031901a.htm

USATODAY.com - Should you pay off your mortgage? Maybe not
http://www.usatoday.com/money/perfi/...mortgage_x.htm

Kassie, this is something many, many of us have to consider. You certainly got me thinking. Thanks.

Jaye

thank you!
 

Wow, such great answers! They all seem to have one central theme...use the money, don't pay down the mortgage. Steve, I agree with you, the stock market is no place to be these days. Reverett, at first I thought your advice about real estate was not for me, which is odd, considering I am a real estate agent! But because I'm in the business, I see all the hassles landlords have and I've always thought, not for me. But duh, I never thought of a management company and double duh, my company partners with one. And triple duh, my area is relatively healthy with reasonable prices. Sooo, I have a lot to think about. I'll never again have this munch money in my life so I want to make the best use of it as possible. Jaye, thanks very much for the great links! I haven't had time to check them out yet but I most certainly will.
See? I knew I went to the right place!

Kassie: You did get good advice. After retiring from the money management business I wrote an "advice" article titled "Put It Under The Mattress". DX'd about two years ago I then began to supplement my advice with "Take A SKI TRIP.
SPEND KID"S INHERITANCE!!

Hi Kassie,
I don't have any financial advise that could help much. They call me two moths and a puff of dust these days. If you absolutely can't decide what to do, send me your money. I need a vacation to a warmer climate with the winter months coming on. :)

GregD

Bandido - Funny how our priorities change! My kids are doing fine and they want me to use the money for myself. To make them happy, I will be in Paris and Florence for two weeks at the end of this month.
Greg - Sorry for your cold winters. At least you don't have to endure 4 months of 95º weather non-stop, no break! It's always something.