Buying a house with winnings VS financing.

Reply #37

Perfecttiming2 — Thu, 14 Oct 2010 06:12:58 GMT

Those who are truly financially secure will tell you their m.o. is Heat (utilities), eat (food), and taxes .

(Now, these are words that make sense!)

It does not make sense to me for someone to have $2 million dollars and STILL borrow money to make a purchase on a house! The goal should be to get out of debt, stay out of debt.......Not create more debt.

You could still make investments, but at least your home would be mortgage-free......and I would hope that at least some of the investme... [ More ]

Reply #36

Goalisamillion — Tue, 12 Oct 2010 20:59:10 GMT

I personally would buy a house in the $150 to 250k range. Then invest the money into a franchise business so the only person im working for is myself !!!! Sell the house and business in 5 years and start all over again !!!! Oh of course within that 5 years I would have spent 100k playing in the WORLD SERIES OF POKER TOURNAMENT!!! lol,......

Reply #35

KY Floyd — Tue, 12 Oct 2010 17:03:42 GMT

Inflation does indeed improve the value of gold

One of the problems with thinking that gold is some kind of magic potion for investings is that inflation improves the price of almost everything, but the value of things and inflation don't have a fixed relationship. At the start of that 40 year period that made gold such a great 40 year investment inlfation was very high, ranging from about 6% to 13% through the 70's (Anyone who's over 50 probaly remembers banks being full of signs offering 1... [ More ]

Reply #34

Daveyl — Tue, 12 Oct 2010 06:00:23 GMT

OwlCreekBridge,

Ky has a valid point to make. Inflation does indeed improve the value of gold, and your assessment of long-held stockpiles of gold is encouraging. However, your valuation is based upon inflated dollars, and not actual costs per ounce. Yes, you may have purchased that gold in 1970 for 100 bucks, but 40 years ago, 100 bucks bought alot more than it does today. I would estimate 10 times, conservatively. Look at fuel costs, home prices, taxes and inflationary pressures. Tradi... [ More ]

Reply #33

rdgrnr — Tue, 12 Oct 2010 04:54:34 GMT

I like having my stuff paid for, always did.

It's nice not having to make those payments after your ex and her lawyers divvy it all up.

Reply #32

THRUST — Tue, 12 Oct 2010 04:36:16 GMT

Buy the house, the car and other stuff...no financing.

Reply #31

psykomo — Tue, 12 Oct 2010 02:53:55 GMT

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This post has been automatically changed by the Lottery Post computer system to remove ina... [ More ]

Reply #30

psykomo — Tue, 12 Oct 2010 02:24:52 GMT

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UNtil OBAMO clear's UR... [ More ]

Reply #29

gonnawinwatchme — Mon, 11 Oct 2010 23:38:06 GMT

I would always buy a house with cash. Coming from someone who is struggling to pay her mortgage right now, owning a house free and clear sounds like heaven

Reply #28

savagegoose — Mon, 11 Oct 2010 21:24:10 GMT

im a bit of a gold bug myself have been for the last 15 years. but its not about gold its about devaluation of the USD. any commodity priced in USD is a good investment ATM gold just happens to be the most duarable.

Reply #27

drhymes74 — Mon, 11 Oct 2010 20:21:30 GMT

I think that I would keep my mortgage intact in the same year that I win a jackpot. Pay it off Jan 1. The mortgage interest is deductible and I would like to offset any taxes, where I really don't get anything back.

Would I buy a new house....no just a good alarm system, perhaps renovate (corian countertops or marble, some new flooring, no gold fixtures though). Update the HVAC, A sunroom with a walkout basement underneath, nice fireplace. Solar panels on the barn.

I'll keep the... [ More ]

Reply #26

OwlCreekBridge — Sun, 10 Oct 2010 01:04:39 GMT

To answer your question I've looked at that chart every day for over a year. Anyone who knows how to read a chart can see, someone who bought an oz of gold 40 years ago could buy it for less than $100. They can sell it now for over $1000. That's what I mean when I said the value increased substantially.

There is only so much food you can stock up on. I already have a garage full of can goods. The government can always print out more money, someone actually needs to dig up gold. Never trus... [ More ]

Reply #25

psykomo — Sun, 10 Oct 2010 00:13:01 GMT

buy a houseobamo will$$pay4 UUU

Reply #24

KY Floyd — Sun, 10 Oct 2010 00:04:17 GMT

Have you looked at the charts yourself? You say that the price has increased substantially over the paast 40 years, but that's not what I see. What I see is a sharp spike in price over a very brief period, followed by a huge crash that is then followed by many years ofminor fluctuation without any meaningful increase. All of that is now being followed by another large spike in the price. Things tend to run in cycles, and how do you know the price of gold isn't doing exactly what it did 30 years... [ More ]

Reply #23

Daveyl — Sat, 09 Oct 2010 23:54:29 GMT

Here's a plan: I would only buy a house that would serve as a refuge if, say, you eventually drained your winnings away. Use that house as a rental property, which would afford you some level of income/tax shelter. Rent a nice condo, or a home, if your family needs one, using the proceeds from your rental to pay the bills, then just have a nice vacation once or twice a year. Go fishing, or attend ballgames. With the residual funds, you could invest in some conservative stocks, or perhaps start a... [ More ]

Reply #22

PERDUE — Fri, 08 Oct 2010 22:19:46 GMT

I would purchase my house and invest the rest. I see no reason to pay 3 times the price over a period of years or a penalty amount if I pay off the loan early. I'm trying to save money, so why would I voluntarily give the mortgage company an extra $100K to $200K for a house that is not even worth that much?

Since it is only 2 million dollars I would still continue in my employment of choice and continue to contribute to my retirement portfolio. I would live my life to the fullest and enjoy ev... [ More ]

Reply #21

OwlCreekBridge — Fri, 08 Oct 2010 22:15:24 GMT

Not necessarily. Even someone who owns a house that is paid in full must still pay annual property tax. People don't pay their property tax the government can take their house away.

I never understood the like money in the bank saying. Are people aware that banks fail all the time?

http://en.wikipedia.org/wiki/2008%E2%80%932010_bank_failures_in_the_United_States

Granted your money is insured by the FDIC for up to $250,000 but how much you want to bet getting your cash from the FDIC woul... [ More ]

Reply #20

OwlCreekBridge — Fri, 08 Oct 2010 21:55:55 GMT

I think you're right. Also buying a house might not be a good idea right now. I think housing prices still have a way to go until they hit bottom.

Reply #19

GASMETERGUY — Fri, 08 Oct 2010 17:03:07 GMT

I could not agree more. Having a house fully paid is like money in the bank. When the economy enters its downward cycle (as it always does at some point in time) I would have a house as a safety net. Hopefully my stock investments would more than compensate during the downward cycle but, if not, I would still have my house.

Reply #18

savagegoose — Fri, 08 Oct 2010 16:10:11 GMT

if i won a lot, id prob lease. i mean if someone comes climbing over my wall and hurts themselves they can sue the property owner for damages not me.

Reply #17

sully16 — Fri, 08 Oct 2010 16:04:53 GMT

Depends on how much I win, if it's alot i'd pay cash, the banksters get enough.

Reply #16

CutlassBob — Fri, 08 Oct 2010 12:39:28 GMT

I would purchase a select parcel of land with the winnings, not to exceed $150,000.00. Next i would build my dream house, complete with above/underground secure living. My home would be 100% self sufficient, generate it's own power, gas well, water well, pump systems, ventilation systems, contained life support systems, etc. I would have a security system on my property that would make the White House Blush. All this for $500,000.00 No need for fancy vehicles, a couple Loaded Jeeps would do. Mod... [ More ]

Reply #15

time*treat — Fri, 08 Oct 2010 12:19:05 GMT

$2 million buys a lot more house in the midwest than on either coast (that's a generalization, not an absolute), so the answer may depend on where/how you want to live.

Reply #14

OwlCreekBridge — Fri, 08 Oct 2010 12:04:15 GMT

Did you even look at the chart I posted? http://goldprice.org/gold-price-history.html#1_year_gold_price

Over 40 years the value of gold has increased substantially. If you want to know what really fluctuates, it's the value of the dollar.

Ben Bernanke the chairman of the federal reserve has already gone on the record saying there isn't enough inflation. No one can see into the future but people can look back into the past. Look at what's happened to every fiat currency in history. Cash is... [ More ]

Reply #13

Coin Toss — Fri, 08 Oct 2010 03:56:33 GMT

OwlCreekBridge

If someone bought a $400,000 houseand paid it off in full the money does nothing. The house might evenlose value. If someone bought a $400,000 house and put 20% down andborrowed the rest they'd have $320,000 to invest. A 15 year fixmortgage is about 3.9% APR.

One way of looking at what you're saying is, I can't stand paying you only the $320,000 remaining for the house, let me pay you tens of thousands more over the next 15 years, where do I sign?

Those who are truly f... [ More ]

Reply #12

PrisonerSix — Fri, 08 Oct 2010 02:10:17 GMT

I already have a mortgage so I'd probably just pay it off and fix up the house I have. I only owe around $60,000, so that's not going to hit me too hard.

I live in an area where housing costs aren't as bad as in some areas. I could probably get a house in the $200-$300K range here that's bigger than then one I have. Going that route, and then just living off interest/investments would be the way to go. Or better yet, move to a lower cost area so I won't need that much to live on, and pay c... [ More ]

Reply #11

TeAl*888 — Fri, 08 Oct 2010 00:45:16 GMT

Owning a business is more important than owning a House ..in my opinion

or even an investment that generates a reasonable profit

you can pay your mortgage using the profit from your investment

but if the Prize money amount is large enough to get you a nice house with enough money left for a good size investment ,then you're set

Reply #10

OwlCreekBridge — Fri, 08 Oct 2010 00:23:20 GMT

I disagree Paid off beats every other scenario every single time. There are scenarios where not paying for a house in full might not be the best decision for someone. The topic creator's scenario is if someone won a $2 million (after taxes) jackpot. If the winner was in their 30s they could live another 30 or 40 years so the money has to last and grow. If someone bought a $400,000 house and paid it off in full the money does nothing. The house might even lose value. If someone bought a $400,000... [ More ]

Reply #9

Coin Toss — Thu, 07 Oct 2010 22:47:10 GMT

OwlCreekBridge,

Paid off beats if every single time.

Reply #8

markp1950 — Thu, 07 Oct 2010 12:05:11 GMT

I buy my land first, on cash.

THEN I put on it whatever I can afford. EVERYTHING cash.

You pay a mortgage, the market crashes, then they take your house from you. Then you have nothing.

MarkP

Reply #7

joker831 — Thu, 07 Oct 2010 10:40:00 GMT

Buy a house for cash. This way you don't end up paying $350,000 on a $120,000 home over a 30 year stretch. If you take $50,000 and invest it wisely, then there is no reason why you shouldn't see $40,000 to $60,000 return per $10,000 invested over a 6 to 8 year period. Check out Lithium stocks and up and comming Chinese Bio Tech stocks. Huge gains and returns on these over the next 3 years. The one to watch right now would be Weikang Bio-Technology Group Co. Inc. Stock Symbol (WKBT). It is a very... [ More ]

Reply #6

kapla — Thu, 07 Oct 2010 09:57:30 GMT

True. Think of it this way - if you borrow the money you PAY for the cost of borrowing that money. Now if you can MAKE more than 5% a year on the money you DIDN'T put in the house then you would end up ahead. That is what ALOT of people did in the last 5-10 years, put as little down as possible and keep as much as possible in the market when they bought new or (if they already owned a home) took out money at the low rate and put in the market making a much higher rate.

So, do you think you c... [ More ]

Reply #5

OwlCreekBridge — Thu, 07 Oct 2010 07:58:32 GMT

If you can invest your money where the interest you make is more than the interest you pay to the bank, you'll come out ahead. If someone can get a 4.25% fixed APR and get a 5% return on their investments they're turning out a profit. Mortgage rates are at historic lows, why not take advantage of it

Reply #4

Coin Toss — Thu, 07 Oct 2010 06:11:17 GMT

With a mortgage you pay for the house three times or more.

Reply #3

OwlCreekBridge — Thu, 07 Oct 2010 06:09:04 GMT

Winning 2 million dollars (after taxes) will not count against you when you apply for a mortgage. With a reasonably good credit score and enough cash to put a 20% down payment getting a home loan shouldn't be a problem.

Personally I would get a 30 year fix mortgage. The APR on these is around 4.25%. Winning 2 million dollars, I wouldn't buy a house more than 400 grand. So, I'd put down 80 grand and borrow 320 grand at 4.25%. If I could invest the money I would have used to pay off the house i... [ More ]

Reply #2

joker17 — Thu, 07 Oct 2010 03:14:24 GMT

Why would I dump all my winnings on a house?

You forgot the Porsche, and the $500,000 recording studio...lol

Reply #1

Jack Pot — Thu, 07 Oct 2010 02:19:48 GMT

I would use $500K to buy a house (including furnishings) and a car---- invest and share the rest of the winnings.

Buying a house with winnings VS financing.

badboy00z — Thu, 07 Oct 2010 01:30:00 GMT

So here's the situation...you just won $2 million dollars (after taxes) and want to buy a house. Would you rather buy a house with the winnings or get a mortgage so you have more money to invest?

My thinking is that if the jackpot is really low you would be better off to invest the money and get a mortgage and pay it off in 10-20 years. If you buy a house with the winnings you won't have that much to invest it.

Would banks even approve your loan if you have money from winning the lottery... [ More ]