4 Ways Your Home Can Pay You

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yeah, right. Get your $0.25 or $0.30 back for every dollar you pay in mortgage interest. The biggest scam banks have ever perpetrated on the Joe Q public. Wake up, people. The Banks have you by the chops. NO MORTGAGE is the way to go, send the banks into more misery.

ajp of FL 6:51AM January 29, 2012

ARM -- I don't think so. How many folks got in trouble with those home loans?
I did not and would not take any adjustable rate morgage on anything. You are only asking for trouble. Pay off debts, including home morgages, and enter retirement debt free. I thank the good Lord we were taught financial lessons by our parents.

Gregg Brentlinger of TX 10:25PM January 12, 2012

The "great" tax deduction for the home.. Its treaterd like the holy grail.
For the average person it only means a few hundred dollars extra that might go in his pocket.
How does 4 or 500 $ effect your decision to buy a house is beyond me.

Parker of MO 1:25AM June 20, 2011

Joe you sold your home in bubble-dom. What's it worth now?
My point about debt is this: once you pay interest, the money's gone for good.
And Joe, you say you 'have a mortgage', and I say, 'you are in debt.'
And finally, the math: remember Joe, you are in debt. You are throwing money away every month for the sole privilege of being in debt! That's what interest is. The mortgage tax deduction is NOT a mortgage tax credit!! Yes, 100% of what you pay in mortgage interest (if you itemize) lessens your taxable income, but Joe, you have to pay that interest first, before you get the deduction!! And remember, it's a DEDUCTION not a credit: it just means your reading the amount of income tax you pay from a different line. If you think you are getting back all of the mortgage interest that you pay IN CASH, then yes, you're warped!
I have the best mortgage interest deduction there is: NO DEBT WHATSOEVER! I keep everything I earn!
No so for you, but kudos on renting out 1/2 of your house, your thinking may be warped but your cash flow is showing promise!

Billy Bob of LA 11:47PM June 12, 2011

@Warped,
I think your thoughts are "warped" allright, here's why;
a) Not all loans are bad, only those taken on unfavorable conditions like buying more house than one can afford, getting into an undesirable neighborhood or any other type of buying real state or other kinds of goods in a way so as to place the buyer in disadvantage... Otherwise, as my wife and I did, we bought our little 2 family house in a decent neghborhood but the house needed lots of work, (one unit was already rented and well), the house, back in 2001 was not cheap but rather worth the money, and we proceeded to work our butts off fixing it up, then we sold it off at a decent profit in 2007, so tell me how are all loans inherently bad? We'd never have been able to pay cash for that house when we first bought it.
b) I think your math on mortgage interest deduction is plain wrong, either that or my CPA accountant told me wrong; I always was able to deduct my TOTAL interest payments on my mortgage from my taxable income, nothing to do w/ only deducting $3 out of every $30 I spent on interest as you've said!

Joe 9:20PM May 09, 2011

Discipline Self Is what I did at age 17 when I saved 10 percent of my income which with monthly compound interest came to about $500. That was 53 years ago. I still do it. As a matter of fact i got so used to saving I am putting about 1500 to 2000 dollars a month into savings. Some say I have had a very lucrative income base. No not really. It was lower income for the better part of my income producing life. I always budgeted and that was the key. When I was married at age 20, my income was only $300. or so meaning i had a part-time job to help out. We always had a good car, plenty to eat and a good roof over our head. At age 26 or about I bought our first home and went thought seven homes since. Now I got all the nice things a retired person normally wants , several homes , generating income, my wife and mine social security and a military retirement check which cover all our medical benefits. Oh our %10 has grown to the point that it is paying back $463 dollars per month and still increasing. Got a working savings account also and after all my basic expenses i easily save $2000. every month and I spend about $1300. on say nothing every month. Just get into the mind set and do it, but Save that untouchable money 10%, just 10 cents on the dollar. Before you know it will be come addictive. Very easy it is called self discipline. Oh one other thing ,Credit, leave it alone and if you must and I mean must, be able to put it into you budget. New things are nice but after the 1st day everything becomes used. So, don't be ashamed to buy used for less to begin with.

Self Disciplin of NC 7:53AM May 01, 2011

it is possible that the author is talking tax evasion as a means to take government money thru a third party entity as most politicians do. ie: I buy a home and pay it off, then I start a corportation, the corportation buys my house from me by making payments, the interest I earn comes out of profits the company would have made, then the company can write off the house payment, I earn profit as rental income and my company makes no money for the year, decreasing my taxes. it is possible that he is illuding to this type of legal, money washing. in this case, yes, you would have a rental, a mortgage, be buying a house and also decrease your taxes, and the taxes you have from rental income are far below the money you save on having to pay corporate taxes. ps, this is how the banks get rich.

bob of OH 3:03AM April 30, 2011

This represents just how entrenched warped financial thinking is in the USA when you have paid writer espousing the same idiocy that has led to the sad state of affairs we have now!
First, #1, Loans: Loans ARE DEBT and not income! Debts incur interest and that's something you PAY! If you are only going to earn so much money throughout your life, the idea is to minimize how much you pay in interest because you have debt! Never have a loan; never pay any interest and KEEP MORE MONEY!
Second, #3: Mortgage interest: Again, would you spend $30 so that you can save $3? Would you look at that $3 and count yourself $3 ahead of the game? Oh - what about that $30 that's gone? Well, it's all part of the typical monthly expenses of any American, so it DOESN'T COUNT, right?
Wrong! Here's the math: (-$30) + ($3) = (-$27). That's a negative amount because, again, this author is equating debt with income! Do you want a REAL 'mortgage deduction'? You do? Then don't get into debt with one! Just because the government lets you keep some of your own money because you can show them you're in debt up to your eyeballs DOESN'T EQUAL INCOME!
The other two: one is not realistic if you value your home as a place for privacy and the other is nonsensical: You have a human body that needs basic things, one of which is shelter, which is ALWAYS on the expense side of the ledger!
The whole thing is dumb. There are ways to earn money with real estate but it involves risk, like any investment, and knowledge and experience.

Billy Bob of LA 9:56PM April 21, 2011

Where does the author intend to have the primary person(s) living on the 14 days that you let somebody into your home? That is a really stupid idea. Who exactly would that work for?
Also, the author ignores one basic, traditional choice...the choice that made our elders financially set... to PAY OFF your mortgage before you retire so your expenses go down and you don't need as much money to make your overhead. Getting out of debt is a tried and true method of cutting expenses. That's how our parents and grandparents did it.
HOWEVER, there are other good points in this article... real estate remains a rock solid investment. My husband and I have just purchased 3 rentals... like the duplex owner who wrote a comment, we couldn't be happier. The rent pays the bills, including mortgage, and,they are set to pay off in 15 years. So, in 15 years when we retire, we'll have the income from THREE house rentals (totaling about 5,000 per month). Plus, if we choose, we could sell these houses and cash out. I'm a big believer in David Bach's ideas (www.finishrich.com)... I'd buy 5 more houses if I only could!

Planning to retire in style of CA 4:44PM April 21, 2011

Actually the best thing to do is to purchase a duplex and rent one side, I have been doing this for 4 years now and couldn't be happier. My renter next door basicly pays for the mortgage and insurance, I pay for the taxes. Not only do I get to 1/2 of the expenses on the upkeep of the house but I get to deduct the 1/2 depreciation and 1/2 of the insurance and 1/2 of the outside utilities. My renter is an older gentleman who is always at home, so I don't even have to worry about security. Because of the extra income I has able to afford a larger house on a larger lot closer in. When the mortgage is paid off I will have a retirement income for life. All this with just one house purchase. It is not easy to find good duplexes as they repersent under 2% of the housing stock and most were built before the 1970s, but it is well worth the trouble. This is one way where you can basically get a rent free house right from the start, something to think about.

Jim Malone of TX 8:01PM April 17, 2011