Bob Brinker Free Discussion Site 59,820+

http://www.PureJazz.com/Mortgage.asp

Top 374. Jul 16, 2005 12:37 PM

» bbaddict - Re: Re: Re: AMT problems

In response to Re: Re: AMT problems posted by retiredinprescot:

The calculator has an alert feature to warn you if you MIGHT have to pay the AMT. Of course, you would still have to fill out the ridiculous worksheet to know for sure, but at least you get the alert.

This is not just a calculator showing your net mortgage cost, but also a good tool for seeing the tax consequences of other decisions. Notice how if your income rises, your Exemptions deduction can decrease, and you may lose your Itemized Deductions.

Give it a try:

But bottom line is: Your net mortgage cost is not really just your rate less your marginal tax rate. Since everyone can get the Standard Deduction, and Itemized Deductions can be limited, the net mortgage cost is a complex calculation, and can only be figured by doing the complex math. The calculator does it for you.

-- posted by bbaddict

Top 375. Jul 16, 2005 1:01 PM

» alphacd - Has Bob voiced an opinion about eastern european oil funds?

Funds like ING Russia (letrx), investing in the russian oil industry, have had an incredible ride. Does anyone know if Bob has voiced an opinion about this kind of an investment. It seems like high oil prices are here to stay.

-- posted by alphacd

Top 376. Jul 16, 2005 1:19 PM

» allancoleman - Re: Has Bob voiced an opinion about eastern european oil funds?

In response to Has Bob voiced an opinion about eastern european oil funds? posted by alphacd:

hi alphacd ,

bob has gotten questions lately about his selection of international funds and usually answers the same line : he suggests the Vanguard International Growth fund ( VWIGX ) . in listening to bob , he probably isn't going to attempt to do any short term international market timing to take advantage of a sector play such as you've mentioned .

i agree with you that high oil prices are here to stay , but how that's going to effect the different individual energy stocks or international mutual funds over the long term is yet to be shown .

course , as bob preaches , you should be your own individual money manager . and , as such , are probably better served by doing your own homework and chosing these different investments on your own . some people , in the past , who have followed bob's specific advice ( Qs ) and don't have the faintest idea of what they are doing or how to develop an exit strategy of their own , haven't done well .

rather than ask what bob brinker is doing , you should probably ask kirk or DanG_6 , or anyone else on suite101's numberous stock trading forums your specific stock or mutual fund questions . at least , that's what i've done and i've always gotten a very quick , well thought out reply . plus kirk usually throws in some really nice chart work in his response .

-- posted by allancoleman

Top 377. Jul 16, 2005 3:41 PM

» Happy_2 - Paying off the Mortgage

In response to Re: Re: Re: AMT problems posted by bbaddict:
Thanks for the neat calculator.

However, one factor in determing whether or not one should pay off their home mortgage is not considered in the calculator. That factor is the direction of interest rates. I might not be able to invest excess capital in a safe investment and earn more than the net cost of my mortgage at this time. But, this may change in the future.

Suppose t-bill rates go back to 10% in a future period. I would be happy I didn't pay off that 5+% mortgage with my excess cash.

The 5+% rate on your mortgage is good for 30 years. The return available on CD's, short term bonds etc. will fluctuate.

-- posted by Happy_2

Top 378. Jul 16, 2005 3:54 PM

» jamesj24 - Re: Re: Higher Oil is Like A Tax, it slows Growth

In response to Re: Higher Oil is Like A Tax, it slows Growth posted by JIMMY62:

Which would be better way Bob to keep our economy cool? To send more money to the OPEC countries or to send more money to our federal government? Yet Bob’s reaction to a tax increase a mild as raising the amount of income subject to SSI tax was gross indignation. Then on Saturday Bob says high oil prices have some good effects. Being consistent is no fun anyway.

These are excellent points. It's clear that Bob doesn't depend heavily on the price of gas, but I'd say most people do, especially those with long communtes. As far as comparing the high oil prices to a tax increase, I think the issue is the order of magnitude. Probably whenever the gov't raises taxes, it usually goes too far and the effect on economic growth is more pronounced than an oil increase. The effect of gas increases is more subtle, and to some extent, avoidable by driving less. Taxes are only legally avoidable by earning less, or by dying. My father owned a small tree service business, and I know his business was greatly impacted by gas prices.

I think Bob is clearly more impacted by his social security taxes than by the price he pays for gas. I myself was only once above the taxable social security income base, for a short while until the SS base grew faster than my salary. There is no maximum for paying the medicare component. So I we're all in the same boat with Bob on that one.

When people say our generation is leaving these debts "to our children", that is not correct. It is more accurate to say that the deficits are jeopardizing our own well-being in retirement, when many, if not most of us will be means tested out of SS and medicare benefits. Our children will have their own opportunity to figure out a way to run things differently if they so choose. Probably, they'll keep running things the same screwed up way our generation does, since our system seems to depend on major gov't support of the economy through spending.

-- posted by jamesj24

Top 379. Jul 16, 2005 5:34 PM

» jamesj24 - Re: Re: Mortgage Cost Calculator

In response to Re: Mortgage Cost Calculator posted by SteveT:

Interesting that you bring up this topic about investing vs. payoff of a loan.

I’m about to receive approximately $210,000 of cash out from a refinancing for which I just signed the closing documents yesterday. The loan is a 10/1, with a 30-year amortization, meaning it has a fixed interest rate of 5% for 10 years, after which it becomes variable for 20 years. I’m paying about $3,100 of closing costs, excluding interest and taxes, with no points or impounds.

I had planned to invest the proceeds in a 5-year CD that was paying 6% interest, but I since found out the offer, which was a promotion of my credit union, had expired. The current CD rates fall short of covering the cost of the money. Now I’m facing the question of what to do with $210,000 of extra cash.

I have tentatively decided to put the money in I-bonds, which are now paying 4.8% through Oct (?), and as Bob coincidentally mentioned today on the program, the interest earnings on them can be deferred for up to 30 years. The only risks I see are disinflation/deflation. I myself don’t think these are likely to occur in the current economy, notwithstanding the latest benign CPI report, which Bob discussed on the program today. The other risk is that the base rate which is now only 1.2%, and which will remain fixed for 30 years, will be increased on subsequent new bond issues, thereby deflating the value of the bonds I'm buying with a 1.2% base rate. At least these bonds should keep up with inflation as measure by the 6-month CPI, doubled to annualize the rate.

There is a penalty if the bonds are cashed in before 5 years, but they can be sold for only a $45 commission through treasury direct. (I'll have to double check that. I was also reading about TIPS and might be confusing them.)

I’m very close to taking the leap to buy I-bonds. I never dreamed I would be making such a large investment at one time, but I think it will reward me over time. Any of your thoughts would be appreciated. BTW, I'm have a 28% incremental Federal tax rate and a 34.7%combined fed/state income tax rate.

-- posted by jamesj24

Top 380. Jul 16, 2005 6:35 PM

» JIMMY62 - off-presidential election years

In response to Re: Rally % vs Duration posted by allancoleman:

definitely disagree with JIMMY62 . to my knowledge , bob hasn't mentioned a " bottom of the next bear market cycle " . and listening , subscribing , and knowing bob , he probably wouldn't ever stick his neck out and make such a statement

Your statement shows that you have not been listening to Bob as long as Kirk.

Bob's greatest ever marketing gimmick was MOABO, AKA Mother of All Buying Opportunities.

MOABO came to THE PROGRAM after Bob made his tactical adjustment in January of 2000.

Bob told the faithful to keep our DRY POWDER, AKA cash reserves, dry and to check the web site for announcemnt of MOABO.

In May of 2001 Bob devoted the monologue of THE MARKETIMER a bit of data from the stock market almanac. By carefully selecting low and high points in market indexes Bob showed that for 40 years (now 44) there has been a market low during the each of the off-presidential election years that was followed by a significant climb in the index. The purpose of the article was to imply, I thought, that the same would happen in 2004.

Which it did. Even though Bob chickened out in October of 2004 and missed MOABO. Then Bob lucked out and was able to get back in just before the start of this war in Iraq.

-- posted by JIMMY62

Top 381. Jul 16, 2005 6:38 PM

» JIMMY62 - Re: Mortgage Cost Calculator

In response to Mortgage Cost Calculator posted by bbaddict:

Bob doesn't "get" calls. Bob's screener selects calls of the types that Bob has told him Bob wants to take.

-- posted by JIMMY62

Top 382. Jul 16, 2005 7:16 PM

» allancoleman - Re: off-presidential election years

In response to off-presidential election years posted by JIMMY62:

although you are correct that bob mentioned the MOABO ( mother of all buying opportunities ) after his " adjustment in January of 2000 " , in no way has bob mentioned RECENTLY that there would be a bottom on this cyclical bull market in 2006 . and in reading bob's recent newsletter , he is very bullish well into 2006 . and , i suggest , such twisting of bob's words doesn't help people who don't listen to bob often .

one of the reasons i prefer to listen , not only to bob - but other investment advisors in person , is because some people misrepresent the facts as they are presented . they " hear " what they want to hear . and bob has to deal with those callers all the time .

as bob would say , " we'll have to agree to disagree " . smile .

-- posted by allancoleman