Many people hate their mortgage because they know over the life of the 30 year loan, they will spend more in interest than the house cost in the first place. To save money it becomes very tempting to make a bigger down payment or make extra principal payments. Unfortunately, saving money is not the same as making money. Or, to put it another way, paying off debt is not the same as accumulating assets. By tackling the mortgage pay-off first, and savings goal second, many fail to consider the important role that a mortgage can play in asset accumulation.  

Consider this: Every dollar we give the bank is a dollar we did not invest. While paying off the mortgage saves us interest, it denies us the opportunity to earn interest with that money. It is quite possible to earn more from a conservative investment than a tax favored mortgage loan is costing us. Contact your financial advisor to determine if this strategy would work for you.

The Benefits of Higher Education 

According to the Federal Reserve, the income disparity between college grads and non-grads is growing every year. In 1979, college grads earned 38% more than those with only a high school diploma. But, today, college grads earn 75% more than those without degrees!

 The Cost of Higher Education

 Let’s face it: college is expensive. And with tuition increasing greater than 4% annually, the cost will only rise. Nationally, just one year of tuition, room and board at an average private college runs just over $30,000. A public out-of-state college runs around $20,000 per year. Even a public in-state college is close to $15,000 annually. So, as a parent who wants your child to have the chance to attend college, what can you do? The answer: plan early!

Emily’s parents were prepared. They sat down with their financial advisor when their daughter was born. They learned that to meet their goals they would need to deposit $345 in a college savings account every month for the next 18 years (assuming a 6% return). Looking deeper, they realized that by using the leverage and tax advantage of their mortgage, along with the power of compound interest, they could instead make a $50,000 one time payment to reach the same goal. By funding their savings plan this way they found that their after tax payment would only be $200/mo – 40% less than their original plan! They also realized that by incorporating this cost into their mortgage loan they would be sure to fund the account. In the past, despite their best of intentions to fund savings plans, they had slipped on making planned payments. Emily’s parents were relieved to have such a seemingly impossible goal taken care of so quickly and painlessly. 

Click Here For The World’s Simplest College Cost Calculator