While trying to build a model for our finances, I've managed to confuse myself reading various threads. Any advice appreciated to get me on the right track or pointed towards modelling spreadsheets.
While there are plenty of threads referencing paying off debt if I can't make a return higher than the mortgage rate - does that hold up over 30 years of inflation?
Is it correct that even passive-index tracker investments have taxable events which would lower the overall return versus paying down the debt? For example, Vanguard is north of 7% since inception - 7% compounded over 30 years would be higher than the debt payment and inflation.
If we're already in one of the higher tax brackets and our only income is from my job, does the new restrictions for state and local taxes impact any of the above answers?
Reading some of the threads on the site, it seems that being unable to itemize taxes paid (NY State Housing is about $23K per annum. incl local school district) and interest paid removes a lot of the benefit to leaving a mortgage open...
- I'm an American living and working in New York, USA.
- We'd like to begin building up sources of passive income over the next five-to-ten years to allow us to offset my eventual loss of income when I'm put out to pasture from my currently well-paying job.
- Our house is currently our only major investment - it has a 30yr ARM at 4.25% for the first seven years.
- I intend to swap to a fixed-rate mortgage when interest rates are inevitably cut.
- We will likely relocate overseas in 5-to-10 years, planning to keep our current house as a rental property