- quote -


Well I'm at a point in my life that home buying may not
be the thing to do for me.

I'm 47 yrs old and thinking SERIOUS abt moving and
going back to college in another town soon.

So the iBond thing is what occurred to me

My other thought was to buy a duplex near the college I
go to and rent one side out. But id have to go in debt
to do that. What you think of that idea?

Advice?

- quote -

My humble opinion is that it would be a great alternative. You can get out
of them after a year if you need the money or find a better investment. Yes
there is a penalty, but even keeping them 2 years with the penalty, you come
out better than CDs. In fact, I just bought a few myself. With I bonds you
sleep well at night --well as long as we remain the United States.
Steve

Steve

- quote -

I only make 22k a year also

Frankly where I live in the Midwest.... that's abt
average

Wisdom Seeker wrote:
- quote -

Don't lie about me. I advised you but did not judge you. If you don't
want advice from people who don't know you that well, don't post
questions to this newsgroup. If you think your income is irrelevant to
the question of buying a home (I think it is relevant), don't mention
it.

<snip
- quote -

You don't have to do anything to please me or anyone else on this
newsgroup. Enough with the sarcasm.

- quote -

Isn't it interesting that people who don't even know me, judge me and
suggest that I change my life around because I only make $22k a year.
They sound like "married" people I know who bug me about being single
still. If it weren't for this inheritance, I would not have left my
last career where I made almost twice what I make now but which I
hated. I better not say anything about the clothes I wear, the food I
eat, and the car I drive. Otherwise I would have to change my wardrobe,
my diet, and trade in my cheap car for a Lexus or Mercedes just to
please those who make more than I do! No worries though...it's all
good!

- quote -

Agree 100 percent!

Question..... if one doesn't want to buy a home.... how
abt buying iBonds as a safe investment?

Hello,

Probably not many of the people in this newsgroup have an annual income of
22K. Some likely make that in a month. Having been a h.s. educator for 20+
years in Alabama (one of the lowest paying states in the nation), I thought
you might like to hear from someone who has been near your income level.

First, with a 22K income, you really don't have money to "play" with. You
need to be sure you protect what you have. Sure, some will claim that
investing it in the market may make you more, but do you really want to
chance that? Are you likely to ever have this chance again? For many of
them, if they loose half, it is no big deal -maybe they skip a cruise. On
22K, it is a big deal for you. Get something you can enjoy and be proud of
every day. A home. You can't go home to 2000 shares of BellSouth.

Owning a home provides security. Knowing no matter what happens, you've got
a home to go to should mean something. I recommend you buy the home and do
"investments" out of what you can save from your salary. That will help you
retain the proper risk/reward relationship.

Steve


"Wisdom Seeker" <dino_go_on[at]yahoo.com> wrote in message
news:1118348192.064373.179420[at]g49g2000cwa.googlegroups.com...
- quote -

<me[at]privacy.net> wrote:

- quote -

You'd be wrong. Median family income was about twice that in 2003 at
$43,500. West Virginia was the lowest income state at MFI of $31,200)

(Source: http://www.census.gov/hhes/www/incom.../statemhi.html)

The median earnings of Full-time, year-round workers in the US in 2001
were ~$40K for males and ~$30K for females.

(Source: http://www.census.gov/hhes/income/histinc/p36.html)

So, in fact a big majority of americans who work make more than $22K.
I'm sure there are a few regions of the country where the median income
of a FTYR female worker drops below $22K, but those generally aren't
places that are expensive to live, except perhaps some resort areas that
draw a lot of second-home buying or retired wealthy folks.

If the OP is working full time year round, I would definitely consider
some kind of change. But it's possible they aren't, and prefer the time
off to the extra money.


Michael

- quote -

I'm not disagreeing with your advice above at all

But I think the vast majority of Americans don't make
much more than that

Andy <ineverevercheckthismailbox[at]yahoo.com> wrote:

First you say:

- quote -

then you turn around and say:

- quote -

If you would decide whether to pay off your mortgage based on prevailing
investment opportunities vs. mortgage interest rate, why wouldn't you do
the exact same thing for student loans?

Right now, my wife's student loan interest rate (she just finished grad
school) is much smaller than prevailing mortgage rates (it's going to be
3.2% I believe, with mortgages running 5+% or so)

If not paying off a mortgage is reasonable, then not paying off a
student loan would be a slam dunk. In fact it is -- you can get just
about risk free returns higher than 3.2%


Michael

"HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote in message
news:901ja1p2e75j6b1c44653ungslf1e6ci7q[at]4ax.com...
- quote -

I apologize, I am wrong and the financial planner and Skip are right. I only
researched the tax bracket and standard deduction. The student loan interest
deduction is an adjustment to income and not an itemized deduction.

Wisdom Seeker wrote:
- quote -

Please excuse for being blunt, but with an income of $22k annually, I
think you should consider if changing careers, going back to school, or
moving to a different part of the country would boost your income. I
would make that a higher priority than buying a house, even for cash.

On 10 Jun 2005 09:10:11 GMT, "googled" <googled[at]blah.com> wrote:

- quote -

I'm from the school that does not let the tax tail wag the dog and
agree that in most cases he should pay off the loan. But assuming the
OP is eligible, I don't think you have to itemize to claim the student
loan deduction.



-HW "Skip" Weldon
Columbia, SC

"Wisdom Seeker" <dino_go_on[at]yahoo.com> wrote in message
news:1118348192.064373.179420[at]g49g2000cwa.googlegroups.com...
- quote -

The financial planner is clearly wrong. The standard deduction in 2005 for a
single filer is $5000. On a income of $22k a year I doubt you itemize
deductions, so you can't write off anything. Even if you do itemize, you are
only in the 15% bracket.

Have you considered the costs of owning a home beyond the initial selling
price, and how these additional costs are proportional to the size of the
house? Because you will have to pay property taxes, homeowner's insurance,
homeowners' association dues (possibly) and over the years maintain the
house's roof, paint, etc., and because your income is low, I suggest you buy
as little house as possible; possibly a condominium. Factor in that you want
things simple, and "less is more" when it comes to housing for you makes
sense.

Pay cash for it (do not take out a mortgage). The reason is that the
interest you pay on any mortgage you take out will not likely be tax
deductible. Invest what's left over. Start investing regularly using the
income from your job, maxing out any 401k plan your employer offers and then
putting the rest into a Roth IRA. Start reading about how to allocate your
portfolio and save for retirement. It must have been extremely tough making
it on $22k a year in an expensive city. If so, I hope this windfall makes
life easier for you. I am seeing so many people struggle financially lately,
and they're making a lot more money. Good luck.

Wisdom Seeker wrote:
- quote -

You need a new financial planner if he really told you to not pay off
your student loans because the interest is deductible. You are throwing
away money on interest, and the governent is giving you you 10-15 cents
on the dollar (in your income bracket) as a partial rebate. Thats no
deal; its costing you $6 in interest to earn $1 in reduced taxes!
Hello!

By buying a home outright you lose the opportunity to invest the money
you used for the purchase. If you could earn a higher rate of interest
on your investments than the rate of interest you are paying on your
mortgage then it makes sense to take out a mortgage and use your cash
to invest.

I personally, would, and have, used my extra money to pay off my
mortgage so that I own my home free and clear. I did that mostly
because interest rates on investments have been so low the past few
years.

Andy

Wisdom Seeker <dino_go_on[at]yahoo.com> wrote:

- quote -

Nothing wrong with buying outright. Stocks could be worthwhile instead
if you can handle some risk, but owning outright is essentially
equivalent to earning prevailing mortgage rates risk free. That's a
pretty good deal, since it will almost always be higher than what you
could earn on long bonds. To the extent that your mortgage interest
wouldn't be tax deductible (for most people, most of it would be), it's
actually comparable to a tax free investment.

Student loan interest works similarly but the rates right now are
*lower* than what you'd earn on long term bonds, so it's pretty silly to
pay them off. Invest in long bonds instead and earn the difference. Or
in something else entirely. Whatever you choose, you know there are
equivalent instruments which earn more than paying those off so that
can't be the optimal choice.


Michael

P.S. -- I want to know how you manage to live in an expensive city on
$22K a year. I don't consider my area all that expensive (the home you
describe would probably run $200K), and I'd be struggling to live on
that here.

Wisdom Seeker wrote:
- quote -

the home. If it's enough to buy the home outright -- great! If not,
you'll have a very small mortgage that you could most likely pay off in
a few short years.

IMO, like all debt, although mortgage interest is deductible, it's
better not to incur it in the first place if you can help it (even
though it's tax-deductible). In a 20% tax bracket you save $20 in taxes
for every $100 paid in mortagge interest. In other words, you're still
out $80.

Of course, once you have no mortgage payment, that doesn't mean that you
should squander your increased disposable income. Use the savings in
monthly outlay to invest long-term for your retirement.


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for a few lines to add context, the previous post is deleted.

I am 36, single and glad, no kids, and inherited some money. I paid off
my credit cards and my car loan totaling $15K. I spoke with a financial
planner and he told me NOT to pay off my student loans ($11K) because I
can write off the interest but I am starting to doubt whether the write
off is worth it. I make about $22k a year and I have about another
$150k coming to me.

Because I live in an expensive city, I am intending to move to a city
where housing is much more affordable; a 3/2/2 new home is about $165K.
Would it be wise to purchase a home outright? Or should I lock in a
low interest rate by putting a higher down payment? My intention is to
have at least $25k liquid just in case. How do I figure out what is the
best case scenario for someone that just wants to live a simple, quiet
life.

I have read most other posts asking where to invest so, and I hope not
to get flamed, what would you do?

Thanks in advance