Following Conventional Wisdom Could Cause This Fatal Million Dollar Mistake

Conventional Wisdom States Buy a House Get a Fixed Rate Mortgage and Brand Extra Payments to Pay Your Mortgage off as Fast as Possible. If you follow Conventional Wisdom you will be making a Million Dollar Mistake. Keep Reading to happen out why.

(This Example is Similar to one Used By Ric Edelman in his New House Of York Times Best Seller the Rules of Money)

You have got a good occupation and you make up one's mind it is clip to purchase your first home. You happen the Perfective Home in the Perfective Neighborhood. It is a $200,000 Home. If You follow Conventional Wisdom you will purchase that $200,000 Home with 20% Down. You will get a 15 Year Fixed Rate Mortgage at 5.25%. Your Monthly payment would be $1286 a Calendar Month and you pay an Extra $100 so you can pay off your Mortgage Early.

The Unconventional manner Get a 30 Year Interest only mortgage (Interest Only for first 15 Old Age then Fully Amortized over last 15 Years) with a 5% Down Payment. Your Monthly Payments are $970 all of which is Tax Deductible and you have got $30,000 remnant to invest. (The remainder of this Example presumes you will put your After Tax Savings and the $30,000 at 8%)

At the end of 15 Old Age Using the Conventional Method your House would be paid off and you would have got almost $28,000 in Savings and Investments. (Remember you paid an Extra $100 a Calendar Month to pay off your mortgage Faster. You are now Investing your Entire Monthly Mortgage Payment plus that $100 at 8%)

At the end of 15 Old Age with the Unconventional Method you would still owe $190,000 on your house but you would have got over $300,000 in nest egg and Investments. (Enough to Pay off your Mortgage if you desire too and still have got got over $110,000 in your Pocket)

At the End of 30 Old Age using the conventional method you would owe your home free and Clear and you would have slightly over $570,000 in nest egg and investment. You would have got got saved almost 21,000 in Taxes

At the End of 30 Old Age using the Using the Unconventional method you would have your home free and clear and have slightly over $1,220,000 in nest egg an Investment. You would have got saved over $88,000 in Taxes.

Let's Assume that the $570,000 and $1,220,000 Continue to Stay Invested at 8%. In 5 Old Age the $570,000 Would Turn to just under 838,000 the $1,220,000 Would Turn to Just Under $1,793,000. A Difference of Almost $1,000,000. In 5 More Old Age the Difference would turn to over $1,400,00. By Listening to conventional wisdom you have got now lost well over $1,000,000 Dollars