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8 Sep, 5 tweets, 1 min read
1. Want to pay off your mortgage as FAST as possible?

Then do NOT get a 15 year mortgage....get a 30 year mortgage.

Yep, you read that right.

Here's why and how:

A client is getting ready to refinance a $256,000 mortgage.

BUT, she wants to pay it off 'fast'.
2. Here's why the 30 year mortgage is better:

They'll give her a 2.75 interest rate, so her payment is $1,046 a month over 30 years.

The mortgage guy told her that he could give her 2.5% if she went with a 15 year mortgage.

And her new payment would be $1,707.
3. The difference is $662 a month.

So, if she took that $662 a month and put it into an index fund that earns 6% (which is not a stretch at ALL),

She would have enough money in 13 years, 2 months to pay off the entire mortgage.

22 months early.

Saving her $37,553.
4. AND, SHE kept control of that money during that entire 15 (well, 13, actually) years.

Same. Exact. Dollars, but a much better result.

#themoreyouknow
5. Addendum:

AND, since it's over a long period of time, she'll likely earn MORE than 6%, and have the house paid off even sooner.

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More from @roncaruthers

Ron Caruthers Profile picture
4 Sep
1. 5 documents you MUST have to be an 'adult'

And a sad story.

I love to write about celebrities and some of the estate planning mistakes they have made to encourage/shame you into fixing your stuff.

BUT, here is an example from this week that I'm working on for a client now:
2. A client's aunt and Godmother died.

She had a trust.

But NONE of her property was IN the trust.

AND, she did NOT have a beneficiary for ANY of her IRA's or brokerage accounts.

So......this is going to be a mess.
3. It's going to go through probate in Arizona, which has a 9-12 month delay.

Plus probate fees.

AND, they may have to cash in ALL of the IRA at once, pay tax on it, and THEN distribute it....
Read 11 tweets
Ron Caruthers Profile picture
17 Jul
1. Money Magazine used to do a 'contest' every year where they gave 50 different tax professionals the same information to see what they got back.

Guess how many different answers they got?

50.
EVERY. SINGLE. TIME.

And the differences in taxes owed were 10's of thousands of $
2. The tax owed ranged from $16,219 to $46,564 (!!!!)

Think about that.

You give the same 'professionals' the same information, but the difference between them is over $30,000.

A YEAR

Also, the difference in what they preparers charged was massive too.
3. The fees for the returns ranged from as little as $520 to $4,500.

Many returns were littered with mistakes, even on such basic matters as dependency exemptions, charitable deductions and the child-care credit.

What is the lesson here?
Read 9 tweets
Ron Caruthers Profile picture
7 Jul
1. Should you pay points when getting a mortgage?

A Twitter White-Paper.

First off, when you get a mortgage, you will have costs with it, including, sometimes, origination points, where you pay just to get the mortgage.

But, you can also pay points to lower your interest rate.
2. Is it worth it?

Let's take a look:

First, let's say you're getting a standard 30 years mortgage of $300,000, and your interest rate is 4%

Your principal and interest payment would be $1,432.

So, over 30 years, you would pay $515,520 total.
3. By the way, if you think you need a 15 year to save money, or you're concerned because @daveramsey says 'you bought the house twice, you dummy!

You need to read this NOW:



Come back when you're done.
Read 13 tweets
Ron Caruthers Profile picture
20 Jun
1. How to have a stress-free retirement

'Get Money, Buy Income'.

@CJ_Johnson17th

In the last decade or so, the retirement landscape has completely changed.
2. In fact,

if you're trying to retire with assets in a 401k or an IRA,

you (and your advisor) are LITERALLY trying to do something that's never been done before.

Here's why:

Before the last 20 years, the majority of people's retirement money came from pensions and SSI.
3. You would work at a job forever, get a nice company pension (and a gold watch!) when you retired that covered most of your income along with Social Security, and any shortfalls you made up with your own savings.

Like the picture above.
Read 25 tweets
Ron Caruthers Profile picture
20 Jun
1. Where is the best place to save money for your kids college education?

A few weeks ago (3, to be exact), I wrote this thread on why a 529 is NOT always a good idea.

Here it is if you missed it:

2. So...since you likely do NOT want to put money into a 529, where else CAN you put money?

And, how can you do it in a way that maximizes your chances of getting merit or need based aid,

Let's go!
3. First, the 'second most popular' way to save money for college sucks too.

That is in an UTMA or UGMA account.

It stands for Uniform Transfer to Minors Account or Uniform GIFT to Minors Account.

Here's why it completely sucks...maybe even WORSE than the 529.
Read 30 tweets
Ron Caruthers Profile picture
29 May
1. Why 529 plans suck as a place to save money for college.

If you have kids, or a 529, settle in.

You're going to be here awhile.

BUT, when you're done, you'll know more about 529 plans than:

-Your CPA
-Most CFP's:
-& definitely more than the people selling them.
2. In this forum (Twitter), I usually write just about finances and taxes.

However, in my financial practice, about 45% of my clients are parents who didn't save enough money for college,

have kids in high school,

& need some immediate help.

So this is my specialty.
3. When I get quoted in places like @FortuneMagazine or @Forbes it is almost always college related.

Here is one example:

forbes.com/sites/robertfa…
Read 27 tweets

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