Investing 102

[GregWeld]

Originally Posted by 67pro-street

With the 30 year I save ~$300 bucks a month from where I am at right now. So, this allowed me to now make my montly house payments AND invest $300 bucks per month with absolutely no change to my lifestyle. And, since I am currently able to make my house payment and swing $300 bucks per month into a Schwab account, if I take the 30 year then essentially I am able to keep my same lifestyle, make my monthly house payments AND put 600 bucks a month into additional savings for retirement (Schwab acct.)!! Thats $7200 bucks a year that I can invest, without changing my lifestyle at all. This is also assuming that I keep the same salary forever, which wont happen but its a worst case scenario.

Brilliant strategy!

When you do the time value of money... saving the MAXIMUM EARLY... is a key to long term returns compounded over time.

Will your investments always compound double every 7 to 10 years -- NO... but they only have to do that once or twice over your lifetime to make a SUBSTANTIAL difference!

But what will remain the same - your house payment and the fixed rate loan percentage. Where people screw up is in using their house as a piggy bank.

REINVEST the dividends and you're going to be a winner in the long run. You've got 30 years to retire - and then you'll live another 25 or 30 years... Your house will be paid for and your investments keep paying you.