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RE: The Benefits Of Buying A House WITH CASH!
What makes you a secure and stable 12% pa after taxes and also pays you monthly?
What makes you a secure and stable 12% pa after taxes and also pays you monthly?
The way I would set it up is $200,000 in the brokerage account. It gets invested in something for 30 years. so the small ups and downs in your investment won't matter. UPRO has returned 36% annually for the last 9 years. but would not work in BEAR market. So you sit out those. The 36% you are making will cover the 1-2 years you make 0% during a BEAR market.
There is also SPY. For the last 20 years and through 2 of histories worst market crashes it has returned 7.2% annually which would more than cover cost of the mortgage and leave $250 month left over.
Now granted, these don't go up every month but if the account was set up to pay the mortgage each month from the accounts balance, there would be no worry. The extra $250 maybe cover taxes so you still come out ahead with the interest tax deduction. The savings on taxes can be invested at the same 7.2% which would come to around $140,000 after 30 years.
All this assumes SPY will average 7.2% over the next 20-30 years as it has always done in the past. No guarantee, but there is also no guarantee the sun will rise in the morning yet most of us live our life as if we will be alive tomorrow. We have faith that history repeats.