Quote: @StickyBun said:
@ MaroonBells said:
@ medaille said:
There's a lot of assumptions being made. We don't know if the house was cheap or where it was. We don't know if they paid for it in cash or if they just paid the minimum down. What we do know is that a very large percentage of NFL athletes (78%) are broke within 2 years of leaving the league. Hopefully he'll be an exception.
If Hughes didn't use his $5M to pay cash for the house and instead has a mortgage that will double the amount he pays for it over 30 years, then he's too stupid to play in the NFL. Of course he paid cash. And it's not like real estate is a terrible investment. It's actually one of the smartest things he could do. NFL players go broke because they spend ridiculous amounts of money in Vegas, on strippers, cars, batshit crazy investments like casinos and music labels.
Not true. The big reason you don't pay cash for a house when borrowing money is dirt cheap is you want your money to work for you via investments. So instead of laying out $700,000 in cash to buy a house, you put down $300,000 and use the other $400,000 to invest in stocks. Mortgage rates are creeping up now, but back when they were around 3.5%, that is SO low. You can pay off the mortgage at any time before the 15 or 30 years maturity. Hughes would be smart to borrow some money for this house as he also needs to establish credit and a credit history as a young man. The ability to be able to borrow money and have good credit is very important moving forward in life. Smart debt is a good thing.
I get the credit argument, but not the cheap money argument. There's nothing cheaper than free.
Quote: @MaroonBells said:
@ StickyBun said:
@ MaroonBells said:
@ medaille said:
There's a lot of assumptions being made. We don't know if the house was cheap or where it was. We don't know if they paid for it in cash or if they just paid the minimum down. What we do know is that a very large percentage of NFL athletes (78%) are broke within 2 years of leaving the league. Hopefully he'll be an exception.
If Hughes didn't use his $5M to pay cash for the house and instead has a mortgage that will double the amount he pays for it over 30 years, then he's too stupid to play in the NFL. Of course he paid cash. And it's not like real estate is a terrible investment. It's actually one of the smartest things he could do. NFL players go broke because they spend ridiculous amounts of money in Vegas, on strippers, cars, batshit crazy investments like casinos and music labels.
Not true. The big reason you don't pay cash for a house when borrowing money is dirt cheap is you want your money to work for you via investments. So instead of laying out $700,000 in cash to buy a house, you put down $300,000 and use the other $400,000 to invest in stocks. Mortgage rates are creeping up now, but back when they were around 3.5%, that is SO low. You can pay off the mortgage at any time before the 15 or 30 years maturity. Hughes would be smart to borrow some money for this house as he also needs to establish credit and a credit history as a young man. The ability to be able to borrow money and have good credit is very important moving forward in life. Smart debt is a good thing.
I get the credit argument, but not the cheap money argument. There's nothing cheaper than free.
This is why, in a nutshell, its smart to borrow money for low rates: Wealthy people borrow because they know that they can control the assets that they buy. They can make more out of those assets over time. In consequence, they will pay down their debt with dollars that are worth much less in the future.
https://www.earlytorise.com/how-wealthy-...wealthier/
Quote: @StickyBun said:
@ MaroonBells said:
@ StickyBun said:
@ MaroonBells said:
@ medaille said:
There's a lot of assumptions being made. We don't know if the house was cheap or where it was. We don't know if they paid for it in cash or if they just paid the minimum down. What we do know is that a very large percentage of NFL athletes (78%) are broke within 2 years of leaving the league. Hopefully he'll be an exception.
If Hughes didn't use his $5M to pay cash for the house and instead has a mortgage that will double the amount he pays for it over 30 years, then he's too stupid to play in the NFL. Of course he paid cash. And it's not like real estate is a terrible investment. It's actually one of the smartest things he could do. NFL players go broke because they spend ridiculous amounts of money in Vegas, on strippers, cars, batshit crazy investments like casinos and music labels.
Not true. The big reason you don't pay cash for a house when borrowing money is dirt cheap is you want your money to work for you via investments. So instead of laying out $700,000 in cash to buy a house, you put down $300,000 and use the other $400,000 to invest in stocks. Mortgage rates are creeping up now, but back when they were around 3.5%, that is SO low. You can pay off the mortgage at any time before the 15 or 30 years maturity. Hughes would be smart to borrow some money for this house as he also needs to establish credit and a credit history as a young man. The ability to be able to borrow money and have good credit is very important moving forward in life. Smart debt is a good thing.
I get the credit argument, but not the cheap money argument. There's nothing cheaper than free.
This is why, in a nutshell, its smart to borrow money for low rates: Wealthy people borrow because they know that they can control the assets that they buy. They can make more out of those assets over time. In consequence, they will pay down their debt with dollars that are worth much less in the future.
https://www.earlytorise.com/how-wealthy-...wealthier/
theres a difference in postion between a wealthy guy that can afford to lose a few million when the stock market corrects and a kid who might be seeing the only money he is ever going to make right now. its like they always say, the first million is the hardest because you cant afford those riskier investments that actually return higher rates. I am nervous as hell right now as there is nothing really giving any returns over the inflation rate that arent likely to collapse when the market corrects which I think is coming pretty soon. One of the best investments I have is a work sponsored "savings account" that pays 4%... of course its non guaranteed, but I work for a large company so for the time being I am pretty comfortable. I am at the age though that I need to be starting to watch my egg a little more closely and be looking for other ways to invest that arent as tied to wall street.
out of curiosity, since this isnt his residence I doubt he would get first time home owners program rates... and he is likely not qualified anyway from an income position. what are standard 15 year rates at right now? I payed my farm off 2 years ago and have been debt free since then (feels pretty good) but I feel weird not having that loan payment hanging over me, driving me to push for that next sale or I might be homeless. :p
Quote: @JimmyinSD said:
@ StickyBun said:
@ MaroonBells said:
@ StickyBun said:
@ MaroonBells said:
@ medaille said:
There's a lot of assumptions being made. We don't know if the house was cheap or where it was. We don't know if they paid for it in cash or if they just paid the minimum down. What we do know is that a very large percentage of NFL athletes (78%) are broke within 2 years of leaving the league. Hopefully he'll be an exception.
If Hughes didn't use his $5M to pay cash for the house and instead has a mortgage that will double the amount he pays for it over 30 years, then he's too stupid to play in the NFL. Of course he paid cash. And it's not like real estate is a terrible investment. It's actually one of the smartest things he could do. NFL players go broke because they spend ridiculous amounts of money in Vegas, on strippers, cars, batshit crazy investments like casinos and music labels.
Not true. The big reason you don't pay cash for a house when borrowing money is dirt cheap is you want your money to work for you via investments. So instead of laying out $700,000 in cash to buy a house, you put down $300,000 and use the other $400,000 to invest in stocks. Mortgage rates are creeping up now, but back when they were around 3.5%, that is SO low. You can pay off the mortgage at any time before the 15 or 30 years maturity. Hughes would be smart to borrow some money for this house as he also needs to establish credit and a credit history as a young man. The ability to be able to borrow money and have good credit is very important moving forward in life. Smart debt is a good thing.
I get the credit argument, but not the cheap money argument. There's nothing cheaper than free.
This is why, in a nutshell, its smart to borrow money for low rates: Wealthy people borrow because they know that they can control the assets that they buy. They can make more out of those assets over time. In consequence, they will pay down their debt with dollars that are worth much less in the future.
https://www.earlytorise.com/how-wealthy-...wealthier/
theres a difference in postion between a wealthy guy that can afford to lose a few million when the stock market corrects and a kid who might be seeing the only money he is ever going to make right now. its like they always say, the first million is the hardest because you cant afford those riskier investments that actually return higher
That has nothing to do with it. Risk management is all about age: the younger you are, the riskier your investments should be with gradual reduction as you get older to maintain what you've grown with less volatility. The best investments, by far over the course of the longhaul, are equities. The market goes down that's your opportunity to buy for value. You keep plugging and investing in the market, especially during the downturns and you'll be a highly successful investor over the decades.
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