8 ms·

It Is Not About the Money, Silly, It Is All About the Time

63 points by slig 12y ago

davidw 12y ago
> someone explained to me in a very serious tone of voice that getting rid of your mortgage is stupid because it is a deductible, better to wait with paying it off when you sell the house in 25 years All else being equal, if you can deduct that from your taxes and spend the money on something else - like, say, index funds - you're going to be better off financially, no?
- jacquesm 12y ago
  Index funds do not have a guaranteed rate of return but mortgages do have a guaranteed rate of expense.
  - zzleeper 12y ago
    Was just thinking the same thing. Keeping the mortgage and investing on index funds is the same thing as "leveraging up" your investments. AKA, it's the same as saying "let's borrow 1k from the bank at 3.5% and put it into the SP500".
    - davidw 12y ago
      But in the US, at least, those interest payments are tax deductible. http://en.wikipedia.org/wiki/Home_mortgage_interest_deduction http://en.wikipedia.org/wiki/Home_mortgage_interest_deductio... Absent that, yeah, paying off the mortgage would make sense. With it, you need to do some calculations.
    - conjecTech 12y ago
      Taking the mortgage was the thing that leveraged you to begin with. Investing in the market rather than paying it off at an advanced rate merely serves to not further reduce your leverage.
      - jacquesm 12y ago
        You have to consider the rent-vs-buy situation of that particular market in order to really evaluate the decision of whether or not taking a mortgage is the right thing to do.
        markc 12y ago
        Bingo. For my recent move I made a spreadsheet to calculate the financial impact of rent vs. buy. I had to guess at a lot of factors, but in the end it was a no brainer. Do the calculation! Cost to Buy: estimated lost investment returns on down payment (after taxes), estimated lost returns on monthly payment (cumulative), financing costs after tax deduction, real-estate taxes after deduction, insurance, HOA fees, utilities, maintenance, estimated increase in value, cost to sell. Compare this against rent and utilities over the same time span, factoring in likely increases in both rent and utilities.
        jacquesm 12y ago
        The utilities will be on both sides of that example so you don't need to factor them in until you start improving a property that you've bought with insulation and such.
        xrange 12y ago
        >The utilities will be on both sides of that example In a "perfectly efficient" economic world it would seem almost all of those categories like taxes, insurance, mortgage interest, and maintenance are really on both side of the equation. The landlord will still have to pay taxes, etc., and pass them along to his renters. In essence, buying a house seems like it would be a getting rid of the middle man situation in the cases where you don't need the special advantages of short term usage that renting presents. Buying a house would just be a special situation of becoming a landlord and renting to yourself. So I'm wondering what specific instances there are where renting makes more long term sense than buying. I can think of a couple: - The unsophisticated landlord. A little old widow or someone who has inherited a rental property, and isn't charging the market rate. Is there a good way to identify these people, and get a cut of the increase in rent that they could be getting? Maybe they don't know how to advertise or evaluate market comparables? Or is there a way to identify them and get a commission for sending savy renters their way (saving the renters money)? - Rent Control. I'm not sure how this works in practice (or in theory for that matter). I'd think that this would reduce the availability of rental units, driving up the cost eventually. If you were renting at the onset of rent control, you got lucky, but for someone newly looking for a place, you maybe don't get the benefit? - Property tax ploys. In some jurisdictions, I'm under the impression that property taxes aren't adjusted to the current market prices (or there is a large time lag). Therefore those property owners have a tax advantage not available to new entrants to the market, so they can afford to compete on rents. The business opportunity here would seem to be identifying people in this situation, and convincing them to move to lower cost location and renting out their current homes. What other market inefficiencies are there which would tip the scales toward renting? Is there a business opportunity in allowing people to rent houses that private parties want to sell? What I mean is a service, where a renter goes out and finds any house for sale on the market they'd like to rent, then I'd step in and arrange the financing, the property management, etc.. They'd pay monthly rent and wouldn't have the burden of home ownership, but they would have housing options that wouldn't normally be available. Are there already companies that do this?
  - bkirkbri 12y ago
    Exactly. I'm always confused when someone suggests that paying off a mortgage is stupid. Sure, 5% return on mortgage money borrowed at 3% is profitable. But there are many assumptions here: how sure is that spread? Can you pay your mortgage each month if the market tanks? How large is the spread when investment is no longer hypothetical and within some risk tolerance? How much tax are you paying on gains? To be clear: I do not mean to imply that GP is making such a bold and unconsidered claim. Just that I've been hearing them a lot lately.
- gnopgnip 12y ago
  Well you also have to pay taxes on your gains, and there is risk involved. You could lose all of the money you put into index funds, you will not lose any money you spend on paying off your mortgage early.
throwaway283719 12y ago
There can be totally valid reasons for not getting rid of your mortgage even if you have the opportunity - if you have something better to do with the money. If you are paying 3.5% on your mortgage but you can invest somewhere with a return greater than 3.5% after tax, why would you pay down your mortgage?
- epx 12y ago
  Freedom is priceless.
  - jacquesm 12y ago
    And guaranteed returns aren't.
- carsongross 12y ago
  Here are some reasons: 1) It is difficult to take a house away from you if you are worried about "bail-in" type scenarios. 2) Paying off your mortgage is a guaranteed investment (there is no default risk) and so it should be compared with long term investing in very high quality government bonds when looking at rates of return, rather than what you can achieve more broadly. 3) It eliminates any future call risk, where your broader investments tank and it becomes difficult to meet your fixed mortgage obligation without liquidating investments at fire-sale prices. 4) It is perfectly hedged against future housing costs, which you will probably always need. 5) This is controversial, but if you believe, as I do, that a fractionally reserved monetary system is immoral, paying off your mortgage (and all the rest of your debt) is as hard a blow as you can land against it.
  - throwaway283719 12y ago
    Yeah, I broadly agree that all of these are valid things to consider, particularly if you are quite risk averse. I take issue with (4) because if you have a mortgage you are already perfectly hedged against future housing costs. If you have a floating rate mortgage you are exposed to interest rates, but you can hedge against that by fixing your mortgage. I think a blanket "debt is bad" approach is naive, just as much as a "risk is bad" approach is naive. All other things being equal, you would rather not have any risk or any debt. But for the right price, you should be willing to take on both. What 'the right price' is will depend on many things, like your stage of life, your income, your safety nets (the state, your family) etc. If you take a "debt is bad" approach then you are saying that the right price is infinity, which doesn't seem sensible.
mmmbeer 12y ago
If you pay off mortgage you need some plan for the extra money every month. If you save and invest it that is one thing, but if you just spend more freely (waste it), you are not better off. Economically, the best way is to not buy too much house, and invest all extra money into equities (index funds) over 20-30 years. If there is no extra money to invest, then you have bought too much house.
- markc 12y ago
  This is the best advice I've seen in this thread. A great thing about having a mortgage for many people is the forced savings of paying down the principal, but you want to maximize that virtue of home ownership by not over-buying - which brings with it proportionally higher taxes, utility costs, maintenance costs. Buy the smallest cheapest house that doesn't suck, and make sure you have auto-invest transfers to a brokerage account set up to get that excess out of your grubby paws. Mostly you'll just spend it on crap. If you do want something important (e.g. a car), you can buy it cash, but it's painful to pull a big chunk money out. That's what you want.
wirefloss 12y ago
A guy was blogging about it a while back :) http://www.forumromanum.org/literature/seneca_younger/brev_e.html http://www.forumromanum.org/literature/seneca_younger/brev_e...
gregorycarter 12y ago
Have you read Early Retirement Extreme? http://earlyretirementextreme.com/ http://earlyretirementextreme.com/ Very similar philosophy.
- christiangenco 12y ago
  Also Mr. Money Mustache: http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/ http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-... He's a software engineer from Canada that never made more than $140 between him and his wife, and they happily retired when he was 30.
- nevinera 12y ago
  He tends to scare normal people off with his incredibly aggressive cost reductions. Living on 8k a year is certainly something one can do to retire very early, but you can't have anything close to a 'normal' lifestyle on that. Money Mustache or Root of Good both have much more palatable levels of self-deprivation for most folks - they emphasize spending carefully, and living within your needs rather than your means.
noonespecial 12y ago
I've noticed that people on the poorer side of the spectrum have made peace with the fact that there are (many) circumstances outside of their control that they are simply unable to address. They don't try by buying the rafts of expensive insurances that middle class people often insist on mostly because they simply can't. Its almost a zen thing. It costs time and money not just to acquire things, but to hold onto them once you have them as well.
- artmageddon 12y ago
  > rafts of expensive insurances that middle class people often insist on Could you explain more on what you're referring to when you say insurances?
  - iNate2000 12y ago
    car insurance, home insurance, fire insurance, life insurance, health insurance, legal costs insurance...
  - noonespecial 12y ago
    Health insurance for starters. Poor people will likely have a (mostly less than sufficient) government option that they pay little for, hoping that they don't get sick. Then comes the mandatory insurances of "ownerships". Mortgage insurance to cover loan default, required property insurance for that home, auto insurance (full coverage also required by your lender on a new car) etc. Fearful insurances like disability insurance to cover the bills if they should become unable to work (wouldn't want to lose all my stuff). Life insurance so the kids have a comfortable life at the level they've become accustom to in the even of death etc. There may also be liability insurances connected with their line of work. Middle class people have a lot of insurances that often take a significant portion of their monthly budget.
    - chrisBob 12y ago
      I agree except for life insurance. Most life insurance (at least a whole life policy) is a way to pass on wealth tax free, rather than a real insurance policy.
conjecTech 12y ago
The author mixes the notions of debt and over-consumption. These aren't even close to being the same thing. There are very valid and financially beneficial reasons to take on debt.
DontBeADick 12y ago
I'm getting tired of all this "live debt free!" nonsense. There's good debt and bad debt, and people like this should learn the difference before giving financial advice.
- nilkn 12y ago
  Debt is like sex. It's better to preach discipline, responsibility, and understanding than abstinence.
  - jacquesm 12y ago
    I'm all for debt if used responsibly. Getting a mortgage can - depending on your personal financial situation and the market conditions - be a good decision. But paying it off versus buying a bunch of gadgets or a new car should be a no-brainer. Unless you have a guaranteed ROI on some investment plan.
    - NickPollard 12y ago
      It doesn't need to be guaranteed, it just needs to be better expected value, with a volatility you're willing to accept. Risk, like debt, is not always a bad thing, as long as you're informed and understanding of it. As Daniel Kahneman said in 'Thinking, Fast and Slow', people ought to take more opportunities with risky outcomes with positive expected values - some you will lose, but over your life, taking a large number of these risks will result in a positive outcome. (Obviously, only take risks where the negative outcome is one you can get through, i.e. it won't kill you, or leave you completely penniless etc.)
      - ryandrake 12y ago
        In any kind of gambling, including investing, variance is the killer. Unless you're making extremely small bets compared to your total bankroll, the inevitable down-swing will end you. The "take risky opportunities" advice is only valid if you can afford the worst possible outcome and still keep going.
- 12y ago
ekr 12y ago
"When I look around me I see people making endless purchases of stuff they don’t actually need [...] I don’t understand any of it." Oh really, you don't? Then you should do some reading on signaling[http://wiki.lesswrong.com/wiki/Signaling http://wiki.lesswrong.com/wiki/Signaling] and evolutionary psychology. Humanity is driven by sexual pressure, and a big factor in that is social status. Most of the time people don't make purchases with their neocortex, but rather with their "reptilian", so analysis about their lives are out of the question.
jasonkester 12y ago
A lot of talk about mortgages here. I think as long as you do the math and let that guide your decisions, you'll come out ahead. Take this year, for example. I happen to have a mortgage that I could pay off completely later this year without penalties. I've been saving to do just that, and parking the balance in the market until the day comes to pull the trigger. But what's this? I'm up 11.6% on the year thus far. It's hard to come up with an argument for not letting it ride a few more months and watching to see what happens. Granted, there's always risk in the market, and using the fund today would net me a cool 4% risk free. But still...
- ryandrake 12y ago
  Paying down a mortgage is probably the safest, guaranteed bet. Not everyone can get lucky on stocks or bear the risk of being unlucky. If there was an available investment opportunity with a higher risk-adjusted rate of return than my mortgage interest rate, I wouldn't want to pay down my mortgage either. If I got all the money back I lost gambling on index funds and other "low risk" investments, I'd probably be able to pay mine off today. EDIT: guaranteed -> risk-adjusted
- gtCameron 12y ago
  Take a look at the historical returns of the stock market. Using the S&P 500 as an index, if you did the same in 2007 riding through 2008 you would have lost 37% of your money. You could very well continue to ride the wave up, but there is a non-zero risk that it all comes crashing back down again, and that needs to be considered in your equation.
- BadCookie 12y ago
  It's my understanding that institutional money has been leaving the stock market while less sophisticated investors have been moving their money into the market (on average). If I were you, I'd be afraid of being the last one standing when the music stops, but then again, I have a history of being overly conservative (to my detriment). Edited to add: If you aren't aware of what's happening with quantitative easing winding down, then do yourself a favor and read up on it.
gglitch 12y ago
"Maybe it is because I don’t allow any advertising at all into my life..." ...How does he manage this? Advertising and marketing have become a major, major, nearly pathological personal issue for me, to such an extent that I sometimes fantasize, on the train on the way to work, for example, about the ability to temporarily turn off my ability to read.
- jacquesm 12y ago
  No TV, no radio, a pretty heavy assortment of ad blockers for my browsers and I refuse to visit people that won't switch off their TV when they have guests or I leave if they don't. Yes, that's rude. No, I don't care. If TV is more interesting than real life people then the real life people have the option to go elsewhere.
  - contravert 12y ago
    Out of curiosity, do you not watch TV series or movies (on a monitor), or is it just cable TV that you don't watch? What about popular music, news, video games and other cultural expressions that all subtly promote materialism?
    - jacquesm 12y ago
      Movies from the net, popular music: what my friends recommend + a collection I built up over a lifetime of buying CDs and LPs, news: nu.nl (no ads there with adblock+ghostery+some tweaks), don't play video games and I don't know what other cultural expressions that promote materialism would be, specifics would help here. Product placement in movies is hard to avoid but super easy to spot, I make a point of not buying anything advertised in that way if I come across it.
- throwaway283719 12y ago
  It's actually not that hard. I very rarely see advertising, and I didn't even make a conscious effort to do it. I don't have a TV, I don't listen to the radio, I don't read magazines or newspapers, I pay a subscription for all the streaming services I use and I use ad-blockers when browsing the internet. None of these are conscious choices to avoid advertisements - I would do all of them even if they didn't have that pleasant side effect. The only time I see advertisements is when I take public transport - the underground in London is full of them, but they're pretty easy to tune out.
NickPollard 12y ago
Some sensible advice here, but also ignoring all debt is not a good idea. I used to have a similarly black-and-white view, but now I realise that debt is simply another trade-off to be considered. Remember, your life is precious. Don't live your 20s and 30s as an ascetic just so you can retire to a golf course in your 50s. I spend a lot now (but not beyond my means) because these are some of the best years of my life, and I know that there's a very significant probability (not guaranteed, but large) that my earning potential will continue to increase for the next 10 years at least (I'm 28). I have made an informed, calculated decision to evolve my spending like this. My utility function is simply that $100 is worth more to me now that it will be when I'm 35. Ergo, borrowing (limited) money can be a net utility positive.
- chrisBob 12y ago
  I like the earning potential argument, and I also consider the useful life of the products I purchase: A canoe bought now has a long lifespan, and provides several years of enjoyment that will be lost if I wait to purchase the same thing. This argument does not work quite as well for something that depreciates, or deteriorates quickly, but paying more for immediate use of something isn't always crazy.
- tomp 12y ago
  > I spend a lot now (but not beyond my means) because these are some of the best years of my life, I agree with the second part of the statement, but not with the first one. In my life, there is almost nothing that could be further improved by spending more (or a lot of) money on. Currently, my biggest expenses are rent (allows me to live in London and have a very good job) and food (I buy the best, mainly because I believe that bad food will tax my body in ways that will only become apparent in several decades - but I eat home-cooked food as often as possible, so it's quite cheap). Other than that, I spend very little. I enjoy reading (books are cheap, so is internet), good conversation (again quite cheap, no need to spend 100s in bars), nature (parks are free), dance and sports (climbing, running, bodyweight training, skiing and surfing - the last two are a bit more expensive, but you don't need to buy your equipment if you're not doing it that often). If I lived in a smaller town, I would probably have a used car to travel in the countryside. I'm probably really lucky, but I really don't see the appeal of most of the more expensive stuff/experiences.
onion2k 12y ago
"Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds and six pence, result misery." Charles Dickens, in "David Copperfield", published in 1850. The notion of living within your means is not a new one. It's something that ought to be taught all the way through school. It's that important.
deleted 12y ago
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pjungwir 12y ago
One thing I heard once that has stuck with me: When you earn a dollar, you pay 30-40% tax on it, but when you save a dollar, you keep the whole thing. It pays to push on both the revenue side and the expense side, but one pro of putting effort into expenses is you keep 100% of the reward.
moron4hire 12y ago
For all the people who are saying "there is good debt and bad debt" and stuff about not paying off your mortgage early: what you say makes mathematical sense, but there is also something to be said for achieving a certain level of simplicity in ones arrangements. For example, I paid off my student loans before my car and my credit cards, way back when I had my own brush with debt servitude. The student loans were the lowest interest of the bunch, but they were also the smallest by that point. I would have spent less overall by paying off the credit card first, but I was able to pay off the student loan immediately. Eliminating it completely helped me on an emotional level stay engaged in my debt reduction. A mile marker, an "easy win". Most people don't have the patience or willpower to work their finances in the most optimal way. Borrowing at X percent to invest at X+Y percent makes no sense for people who have difficulty remembering to pay bills on time; the late fees will destroy them. And the solution is not "just pay the bills on time", because that's already supposed to be done. Better to live life understanding what you're capable of. I freelance because I know I'm not capable of getting into an office at 8am for more than three days in a row (actually, it's any set time), and most employers would prefer you to do it 365 days in a row. We already tried "get me up earlier" and that didn't work. Time for new solutions to the problem.
- Domenic_S 12y ago
  > A mile marker, an "easy win". It's often called the snowball method, and it works very well for some people.
grecy 12y ago
During my 2 year drive from Alaska to Argentina, it took almost the entire trip for me to learn this lesson. At first in Mexico (and Central America in general) I genuinely thought people were just lazy and I would think "Why don't you get a job". The years rolled on, my Spanish improved, and I had many great conversations about this topic. Finally, a great friend in Argentina explained the situation to me. It's all about debt. In the developed world, when we want something shiny (say, an iPhone), we walk into the shop, sign a piece of paper and are showing it off to our friends 20 minutes later at the bar. It's not a completely conscious thought that we'll be paying it off for the next 24-48 months while we mindlessly go to work everyday. In the developing or undeveloped world, nobody can get credit, so when you want an iPhone, you have to save up for it and buy it outright. So you get a solid job, and start saving the ~$700 for an iPhone. Who in their right mind is going to continue going to work day in, day out for 6-12 months just to buy an iPhone that will be obsolete in a year anyway? More realistically, after a week or three, you quit your job, and hang out with your friends & family, having celebrations and generally enjoying your time. And so it is that "poor" people have so much more time to enjoy their lives, rather than going to work to pay off things they never needed in the first place.
- lingoberry 12y ago
  You actually know someone who bought a phone on credit?
  - grecy 12y ago
    Almost everyone you know is buying their phone on credit. You put $0, or $99 or $199 down, then you're in a 2 or 3 year contract. Stop paying that contract and see what happens to your phone (Hint: They take it off you, your credit score goes to rubbish) You don't own the phone, you're paying it off over many years. To buy such a phone not on credit, you'll pay something like ~$700 up front, and it's yours for life.
jahewson 12y ago
I'm tired of seeing "people who are in debt waste their money" or "people who are in debt live beyond their means" as the default explanation for indebtedness. I'm in debt. I have debt for a car, furniture, and medical expenses. (despite the fact that most of my furniture was acquired for little cost, and insurance covers most of my medical expenses) I also have a new MacBook Pro (I'm a developer), much to the chagrin of my baby boomer parents, who also think I should drink less Starbucks coffee. There's not a lot of understanding amongst the older generation that rent is high, food is expensive, and that's where most of the money goes, which makes it hard to pay off the debts. Starbucks represents about 1% of my income, the MacBook will be under 2% of my income over the 3 years I'll probably have it, and I'll make back probably 40% of that when I sell it.
- JoeAltmaier 12y ago
  Huh. Starbuck habit of $5/day (conservative?) over a 200-day work year amounts to $1000. Have to spend $100,000 to make that just 1%.
  - jahewson 12y ago
    1% of income not 1% of spending. Also I spend considerably less than $5/day at Starbucks, way less.
xrange 12y ago
One things I don't see mentioned is the use of a mortgage as kind of a forced savings plan. For a bunch of reasons, it is really hard for people to plan/save for the future. That's why there is thousands of years of parables and social convention exhorting people to save and not be in debt (i.e. if it was easy to do, everyone would do it). Buying a larger-than-strictly-necessary house with a mortgage is a way to start applying current money to a need in the future. By making a mortgage payment, they aren't otherwise spending that money on more frivolous items. In 30 years time they'll at least have something tangible, instead of fleeting memories of vacations. Whether that trade of as an individual is worth it is debatable, but on a societal level, it probably is. I think there is a similar, more short-term story with IRS refunds. People could have their paycheck deductions arranged so that their "refund" was nothing. But if it comes out "unvoluntarily", then they are excited to get it back in a lump sum, even if this is the mathematically sub-optimal solution.
- grecy 12y ago
  By the time you pay off the mortgage you will have paid 3-4 times the value of the property because of the interest. So on a $400k house you will have put $1.2mil - $1.6mil into the savings account, but you'll only have a ~$500k property to show for it (IF the house appreciates, which it hopefully does, fingers crossed). That's a seriously inefficient way to save.
  - conjecTech 12y ago
    You get to use the property for that entire time rather than having to wait until you can pay for it in cash, however. Your alternative to paying a mortgage isn't living in a home for free. It's paying rent or being homeless. If your rent is $2,500 a month, you need to subtract about $900k from that amount you're talking about putting in your savings account because it'll be going to your landlord instead.
    - grecy 12y ago
      I have no idea where you live that rent is $2,500 a month, but if it really is, I'm guessing houses aren't $400k.
dionidium 12y ago
Saving is so much easier than earning, and it’s a habit that once built will pay you back for the rest of your life. There's a weird cultural meme that's convinced the middle class that the road to wealth is saving. The road to wealth is earning. This is just kind of an obvious thing, but I guess there are benefits to convincing people who will never earn enough to be wealthy that there are attainable ways to go about it. I'll tell you this much, if buying an iPad makes you broke, then not buying that iPad sure ain't gonna' make you rich. This meme is just kind of annoying as it relates to the middle class, but it's downright dangerous when applied to the poor. It's useless to apply ideals of thrift to people making minimum wage, a level of earning at which no amount of saving can cover even predictable periodic expenses.
- bradshaw1965 12y ago
  There are pressures from both the earn and the spend side, but the surest path to misery is living above your means. Dickens had it pretty much nailed with, "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."
- dimva 12y ago
  Investing $4000/month (which is what I do on a salary barely over $100k while living by myself in a 1 bedroom in the East Village, NYC and going out for every meal) at 3% will get you $1 million in 17 years. That means you'll be a millionaire by the time you're 40 if you start doing this right after graduating college. 3% happens to be the rate that stocks have historically appreciated above inflation, so by doing this you'll be a millionaire in today's money. Don't believe me? Try it: http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx http://www.bankrate.com/calculators/savings/simple-savings-c... EDIT: For the poor, there are many structural problems that lead to a cycle of poverty, but it is possible to escape even that with very good money management. I dated a girl whose parents came to America on a raft, with a fifth-grade education. They slept outside the 7/11 where they worked at first (didn't have to spend any money on rent), and ended up owning a large portion of their town by the time they were in their 50s. In short, don't knock thrift. Yes, earning more is always great, but savings combined with compound interest is magical.
ap22213 12y ago
I run into this all the time as I bootstrap my company. I have a deep temptation to try to do everything myself. And, a lot of times, I will do so. But, I have to keep reminding myself that there's way more value in outsourcing things. I have enough extra capital to do so, so there's no reason not to. But, it's a mental challenge to allow myself to drain the bank account, as I instead feel comfortable spending enormous time tinkering with things on the side. Trying to do all the code myself only takes more time. And time is more than money in this business.

63 points by slig 12y ago

> someone explained to me in a very serious tone of voice that getting rid of your mortgage is stupid because it is a deductible, better to wait with paying it off when you sell the house in 25 years All else being equal, if you can deduct that from your taxes and spend the money on something else - like, say, index funds - you're going to be better off financially, no?

jacquesm 12y ago
Index funds do not have a guaranteed rate of return but mortgages do have a guaranteed rate of expense.
- zzleeper 12y ago
  Was just thinking the same thing. Keeping the mortgage and investing on index funds is the same thing as "leveraging up" your investments. AKA, it's the same as saying "let's borrow 1k from the bank at 3.5% and put it into the SP500".
  - davidw 12y ago
    But in the US, at least, those interest payments are tax deductible. http://en.wikipedia.org/wiki/Home_mortgage_interest_deduction http://en.wikipedia.org/wiki/Home_mortgage_interest_deductio... Absent that, yeah, paying off the mortgage would make sense. With it, you need to do some calculations.
  - conjecTech 12y ago
    Taking the mortgage was the thing that leveraged you to begin with. Investing in the market rather than paying it off at an advanced rate merely serves to not further reduce your leverage.
    - jacquesm 12y ago
      You have to consider the rent-vs-buy situation of that particular market in order to really evaluate the decision of whether or not taking a mortgage is the right thing to do.
      - markc 12y ago
        Bingo. For my recent move I made a spreadsheet to calculate the financial impact of rent vs. buy. I had to guess at a lot of factors, but in the end it was a no brainer. Do the calculation! Cost to Buy: estimated lost investment returns on down payment (after taxes), estimated lost returns on monthly payment (cumulative), financing costs after tax deduction, real-estate taxes after deduction, insurance, HOA fees, utilities, maintenance, estimated increase in value, cost to sell. Compare this against rent and utilities over the same time span, factoring in likely increases in both rent and utilities.
        jacquesm 12y ago
        The utilities will be on both sides of that example so you don't need to factor them in until you start improving a property that you've bought with insulation and such.
        xrange 12y ago
        >The utilities will be on both sides of that example In a "perfectly efficient" economic world it would seem almost all of those categories like taxes, insurance, mortgage interest, and maintenance are really on both side of the equation. The landlord will still have to pay taxes, etc., and pass them along to his renters. In essence, buying a house seems like it would be a getting rid of the middle man situation in the cases where you don't need the special advantages of short term usage that renting presents. Buying a house would just be a special situation of becoming a landlord and renting to yourself. So I'm wondering what specific instances there are where renting makes more long term sense than buying. I can think of a couple: - The unsophisticated landlord. A little old widow or someone who has inherited a rental property, and isn't charging the market rate. Is there a good way to identify these people, and get a cut of the increase in rent that they could be getting? Maybe they don't know how to advertise or evaluate market comparables? Or is there a way to identify them and get a commission for sending savy renters their way (saving the renters money)? - Rent Control. I'm not sure how this works in practice (or in theory for that matter). I'd think that this would reduce the availability of rental units, driving up the cost eventually. If you were renting at the onset of rent control, you got lucky, but for someone newly looking for a place, you maybe don't get the benefit? - Property tax ploys. In some jurisdictions, I'm under the impression that property taxes aren't adjusted to the current market prices (or there is a large time lag). Therefore those property owners have a tax advantage not available to new entrants to the market, so they can afford to compete on rents. The business opportunity here would seem to be identifying people in this situation, and convincing them to move to lower cost location and renting out their current homes. What other market inefficiencies are there which would tip the scales toward renting? Is there a business opportunity in allowing people to rent houses that private parties want to sell? What I mean is a service, where a renter goes out and finds any house for sale on the market they'd like to rent, then I'd step in and arrange the financing, the property management, etc.. They'd pay monthly rent and wouldn't have the burden of home ownership, but they would have housing options that wouldn't normally be available. Are there already companies that do this?
- bkirkbri 12y ago
  Exactly. I'm always confused when someone suggests that paying off a mortgage is stupid. Sure, 5% return on mortgage money borrowed at 3% is profitable. But there are many assumptions here: how sure is that spread? Can you pay your mortgage each month if the market tanks? How large is the spread when investment is no longer hypothetical and within some risk tolerance? How much tax are you paying on gains? To be clear: I do not mean to imply that GP is making such a bold and unconsidered claim. Just that I've been hearing them a lot lately.
gnopgnip 12y ago
Well you also have to pay taxes on your gains, and there is risk involved. You could lose all of the money you put into index funds, you will not lose any money you spend on paying off your mortgage early.

throwaway283719 12y ago

There can be totally valid reasons for not getting rid of your mortgage even if you have the opportunity - if you have something better to do with the money. If you are paying 3.5% on your mortgage but you can invest somewhere with a return greater than 3.5% after tax, why would you pay down your mortgage?

epx 12y ago
Freedom is priceless.
- jacquesm 12y ago
  And guaranteed returns aren't.
carsongross 12y ago
Here are some reasons: 1) It is difficult to take a house away from you if you are worried about "bail-in" type scenarios. 2) Paying off your mortgage is a guaranteed investment (there is no default risk) and so it should be compared with long term investing in very high quality government bonds when looking at rates of return, rather than what you can achieve more broadly. 3) It eliminates any future call risk, where your broader investments tank and it becomes difficult to meet your fixed mortgage obligation without liquidating investments at fire-sale prices. 4) It is perfectly hedged against future housing costs, which you will probably always need. 5) This is controversial, but if you believe, as I do, that a fractionally reserved monetary system is immoral, paying off your mortgage (and all the rest of your debt) is as hard a blow as you can land against it.
- throwaway283719 12y ago
  Yeah, I broadly agree that all of these are valid things to consider, particularly if you are quite risk averse. I take issue with (4) because if you have a mortgage you are already perfectly hedged against future housing costs. If you have a floating rate mortgage you are exposed to interest rates, but you can hedge against that by fixing your mortgage. I think a blanket "debt is bad" approach is naive, just as much as a "risk is bad" approach is naive. All other things being equal, you would rather not have any risk or any debt. But for the right price, you should be willing to take on both. What 'the right price' is will depend on many things, like your stage of life, your income, your safety nets (the state, your family) etc. If you take a "debt is bad" approach then you are saying that the right price is infinity, which doesn't seem sensible.

mmmbeer 12y ago

If you pay off mortgage you need some plan for the extra money every month. If you save and invest it that is one thing, but if you just spend more freely (waste it), you are not better off. Economically, the best way is to not buy too much house, and invest all extra money into equities (index funds) over 20-30 years. If there is no extra money to invest, then you have bought too much house.

markc 12y ago
This is the best advice I've seen in this thread. A great thing about having a mortgage for many people is the forced savings of paying down the principal, but you want to maximize that virtue of home ownership by not over-buying - which brings with it proportionally higher taxes, utility costs, maintenance costs. Buy the smallest cheapest house that doesn't suck, and make sure you have auto-invest transfers to a brokerage account set up to get that excess out of your grubby paws. Mostly you'll just spend it on crap. If you do want something important (e.g. a car), you can buy it cash, but it's painful to pull a big chunk money out. That's what you want.

wirefloss 12y ago

A guy was blogging about it a while back :) http://www.forumromanum.org/literature/seneca_younger/brev_e.html http://www.forumromanum.org/literature/seneca_younger/brev_e...

gregorycarter 12y ago

Have you read Early Retirement Extreme? http://earlyretirementextreme.com/ http://earlyretirementextreme.com/ Very similar philosophy.

christiangenco 12y ago
Also Mr. Money Mustache: http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/ http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-... He's a software engineer from Canada that never made more than $140 between him and his wife, and they happily retired when he was 30.
nevinera 12y ago
He tends to scare normal people off with his incredibly aggressive cost reductions. Living on 8k a year is certainly something one can do to retire very early, but you can't have anything close to a 'normal' lifestyle on that. Money Mustache or Root of Good both have much more palatable levels of self-deprivation for most folks - they emphasize spending carefully, and living within your needs rather than your means.

noonespecial 12y ago

I've noticed that people on the poorer side of the spectrum have made peace with the fact that there are (many) circumstances outside of their control that they are simply unable to address. They don't try by buying the rafts of expensive insurances that middle class people often insist on mostly because they simply can't. Its almost a zen thing. It costs time and money not just to acquire things, but to hold onto them once you have them as well.

artmageddon 12y ago
> rafts of expensive insurances that middle class people often insist on Could you explain more on what you're referring to when you say insurances?
- iNate2000 12y ago
  car insurance, home insurance, fire insurance, life insurance, health insurance, legal costs insurance...
- noonespecial 12y ago
  Health insurance for starters. Poor people will likely have a (mostly less than sufficient) government option that they pay little for, hoping that they don't get sick. Then comes the mandatory insurances of "ownerships". Mortgage insurance to cover loan default, required property insurance for that home, auto insurance (full coverage also required by your lender on a new car) etc. Fearful insurances like disability insurance to cover the bills if they should become unable to work (wouldn't want to lose all my stuff). Life insurance so the kids have a comfortable life at the level they've become accustom to in the even of death etc. There may also be liability insurances connected with their line of work. Middle class people have a lot of insurances that often take a significant portion of their monthly budget.
  - chrisBob 12y ago
    I agree except for life insurance. Most life insurance (at least a whole life policy) is a way to pass on wealth tax free, rather than a real insurance policy.

conjecTech 12y ago

The author mixes the notions of debt and over-consumption. These aren't even close to being the same thing. There are very valid and financially beneficial reasons to take on debt.

DontBeADick 12y ago

I'm getting tired of all this "live debt free!" nonsense. There's good debt and bad debt, and people like this should learn the difference before giving financial advice.

nilkn 12y ago
Debt is like sex. It's better to preach discipline, responsibility, and understanding than abstinence.
- jacquesm 12y ago
  I'm all for debt if used responsibly. Getting a mortgage can - depending on your personal financial situation and the market conditions - be a good decision. But paying it off versus buying a bunch of gadgets or a new car should be a no-brainer. Unless you have a guaranteed ROI on some investment plan.
  - NickPollard 12y ago
    It doesn't need to be guaranteed, it just needs to be better expected value, with a volatility you're willing to accept. Risk, like debt, is not always a bad thing, as long as you're informed and understanding of it. As Daniel Kahneman said in 'Thinking, Fast and Slow', people ought to take more opportunities with risky outcomes with positive expected values - some you will lose, but over your life, taking a large number of these risks will result in a positive outcome. (Obviously, only take risks where the negative outcome is one you can get through, i.e. it won't kill you, or leave you completely penniless etc.)
    - ryandrake 12y ago
      In any kind of gambling, including investing, variance is the killer. Unless you're making extremely small bets compared to your total bankroll, the inevitable down-swing will end you. The "take risky opportunities" advice is only valid if you can afford the worst possible outcome and still keep going.
12y ago

ekr 12y ago

"When I look around me I see people making endless purchases of stuff they don’t actually need [...] I don’t understand any of it." Oh really, you don't? Then you should do some reading on signaling[http://wiki.lesswrong.com/wiki/Signaling http://wiki.lesswrong.com/wiki/Signaling] and evolutionary psychology. Humanity is driven by sexual pressure, and a big factor in that is social status. Most of the time people don't make purchases with their neocortex, but rather with their "reptilian", so analysis about their lives are out of the question.

jasonkester 12y ago

A lot of talk about mortgages here. I think as long as you do the math and let that guide your decisions, you'll come out ahead. Take this year, for example. I happen to have a mortgage that I could pay off completely later this year without penalties. I've been saving to do just that, and parking the balance in the market until the day comes to pull the trigger. But what's this? I'm up 11.6% on the year thus far. It's hard to come up with an argument for not letting it ride a few more months and watching to see what happens. Granted, there's always risk in the market, and using the fund today would net me a cool 4% risk free. But still...

ryandrake 12y ago
Paying down a mortgage is probably the safest, guaranteed bet. Not everyone can get lucky on stocks or bear the risk of being unlucky. If there was an available investment opportunity with a higher risk-adjusted rate of return than my mortgage interest rate, I wouldn't want to pay down my mortgage either. If I got all the money back I lost gambling on index funds and other "low risk" investments, I'd probably be able to pay mine off today. EDIT: guaranteed -> risk-adjusted
gtCameron 12y ago
Take a look at the historical returns of the stock market. Using the S&P 500 as an index, if you did the same in 2007 riding through 2008 you would have lost 37% of your money. You could very well continue to ride the wave up, but there is a non-zero risk that it all comes crashing back down again, and that needs to be considered in your equation.
BadCookie 12y ago
It's my understanding that institutional money has been leaving the stock market while less sophisticated investors have been moving their money into the market (on average). If I were you, I'd be afraid of being the last one standing when the music stops, but then again, I have a history of being overly conservative (to my detriment). Edited to add: If you aren't aware of what's happening with quantitative easing winding down, then do yourself a favor and read up on it.

gglitch 12y ago

"Maybe it is because I don’t allow any advertising at all into my life..." ...How does he manage this? Advertising and marketing have become a major, major, nearly pathological personal issue for me, to such an extent that I sometimes fantasize, on the train on the way to work, for example, about the ability to temporarily turn off my ability to read.

jacquesm 12y ago
No TV, no radio, a pretty heavy assortment of ad blockers for my browsers and I refuse to visit people that won't switch off their TV when they have guests or I leave if they don't. Yes, that's rude. No, I don't care. If TV is more interesting than real life people then the real life people have the option to go elsewhere.
- contravert 12y ago
  Out of curiosity, do you not watch TV series or movies (on a monitor), or is it just cable TV that you don't watch? What about popular music, news, video games and other cultural expressions that all subtly promote materialism?
  - jacquesm 12y ago
    Movies from the net, popular music: what my friends recommend + a collection I built up over a lifetime of buying CDs and LPs, news: nu.nl (no ads there with adblock+ghostery+some tweaks), don't play video games and I don't know what other cultural expressions that promote materialism would be, specifics would help here. Product placement in movies is hard to avoid but super easy to spot, I make a point of not buying anything advertised in that way if I come across it.
throwaway283719 12y ago
It's actually not that hard. I very rarely see advertising, and I didn't even make a conscious effort to do it. I don't have a TV, I don't listen to the radio, I don't read magazines or newspapers, I pay a subscription for all the streaming services I use and I use ad-blockers when browsing the internet. None of these are conscious choices to avoid advertisements - I would do all of them even if they didn't have that pleasant side effect. The only time I see advertisements is when I take public transport - the underground in London is full of them, but they're pretty easy to tune out.

NickPollard 12y ago

Some sensible advice here, but also ignoring all debt is not a good idea. I used to have a similarly black-and-white view, but now I realise that debt is simply another trade-off to be considered. Remember, your life is precious. Don't live your 20s and 30s as an ascetic just so you can retire to a golf course in your 50s. I spend a lot now (but not beyond my means) because these are some of the best years of my life, and I know that there's a very significant probability (not guaranteed, but large) that my earning potential will continue to increase for the next 10 years at least (I'm 28). I have made an informed, calculated decision to evolve my spending like this. My utility function is simply that $100 is worth more to me now that it will be when I'm 35. Ergo, borrowing (limited) money can be a net utility positive.

chrisBob 12y ago
I like the earning potential argument, and I also consider the useful life of the products I purchase: A canoe bought now has a long lifespan, and provides several years of enjoyment that will be lost if I wait to purchase the same thing. This argument does not work quite as well for something that depreciates, or deteriorates quickly, but paying more for immediate use of something isn't always crazy.
tomp 12y ago
> I spend a lot now (but not beyond my means) because these are some of the best years of my life, I agree with the second part of the statement, but not with the first one. In my life, there is almost nothing that could be further improved by spending more (or a lot of) money on. Currently, my biggest expenses are rent (allows me to live in London and have a very good job) and food (I buy the best, mainly because I believe that bad food will tax my body in ways that will only become apparent in several decades - but I eat home-cooked food as often as possible, so it's quite cheap). Other than that, I spend very little. I enjoy reading (books are cheap, so is internet), good conversation (again quite cheap, no need to spend 100s in bars), nature (parks are free), dance and sports (climbing, running, bodyweight training, skiing and surfing - the last two are a bit more expensive, but you don't need to buy your equipment if you're not doing it that often). If I lived in a smaller town, I would probably have a used car to travel in the countryside. I'm probably really lucky, but I really don't see the appeal of most of the more expensive stuff/experiences.

onion2k 12y ago

"Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds and six pence, result misery." Charles Dickens, in "David Copperfield", published in 1850. The notion of living within your means is not a new one. It's something that ought to be taught all the way through school. It's that important.

deleted 12y ago

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pjungwir 12y ago

One thing I heard once that has stuck with me: When you earn a dollar, you pay 30-40% tax on it, but when you save a dollar, you keep the whole thing. It pays to push on both the revenue side and the expense side, but one pro of putting effort into expenses is you keep 100% of the reward.

moron4hire 12y ago

For all the people who are saying "there is good debt and bad debt" and stuff about not paying off your mortgage early: what you say makes mathematical sense, but there is also something to be said for achieving a certain level of simplicity in ones arrangements. For example, I paid off my student loans before my car and my credit cards, way back when I had my own brush with debt servitude. The student loans were the lowest interest of the bunch, but they were also the smallest by that point. I would have spent less overall by paying off the credit card first, but I was able to pay off the student loan immediately. Eliminating it completely helped me on an emotional level stay engaged in my debt reduction. A mile marker, an "easy win". Most people don't have the patience or willpower to work their finances in the most optimal way. Borrowing at X percent to invest at X+Y percent makes no sense for people who have difficulty remembering to pay bills on time; the late fees will destroy them. And the solution is not "just pay the bills on time", because that's already supposed to be done. Better to live life understanding what you're capable of. I freelance because I know I'm not capable of getting into an office at 8am for more than three days in a row (actually, it's any set time), and most employers would prefer you to do it 365 days in a row. We already tried "get me up earlier" and that didn't work. Time for new solutions to the problem.

Domenic_S 12y ago
> A mile marker, an "easy win". It's often called the snowball method, and it works very well for some people.

grecy 12y ago

During my 2 year drive from Alaska to Argentina, it took almost the entire trip for me to learn this lesson. At first in Mexico (and Central America in general) I genuinely thought people were just lazy and I would think "Why don't you get a job". The years rolled on, my Spanish improved, and I had many great conversations about this topic. Finally, a great friend in Argentina explained the situation to me. It's all about debt. In the developed world, when we want something shiny (say, an iPhone), we walk into the shop, sign a piece of paper and are showing it off to our friends 20 minutes later at the bar. It's not a completely conscious thought that we'll be paying it off for the next 24-48 months while we mindlessly go to work everyday. In the developing or undeveloped world, nobody can get credit, so when you want an iPhone, you have to save up for it and buy it outright. So you get a solid job, and start saving the ~$700 for an iPhone. Who in their right mind is going to continue going to work day in, day out for 6-12 months just to buy an iPhone that will be obsolete in a year anyway? More realistically, after a week or three, you quit your job, and hang out with your friends & family, having celebrations and generally enjoying your time. And so it is that "poor" people have so much more time to enjoy their lives, rather than going to work to pay off things they never needed in the first place.

lingoberry 12y ago
You actually know someone who bought a phone on credit?
- grecy 12y ago
  Almost everyone you know is buying their phone on credit. You put $0, or $99 or $199 down, then you're in a 2 or 3 year contract. Stop paying that contract and see what happens to your phone (Hint: They take it off you, your credit score goes to rubbish) You don't own the phone, you're paying it off over many years. To buy such a phone not on credit, you'll pay something like ~$700 up front, and it's yours for life.

jahewson 12y ago

I'm tired of seeing "people who are in debt waste their money" or "people who are in debt live beyond their means" as the default explanation for indebtedness. I'm in debt. I have debt for a car, furniture, and medical expenses. (despite the fact that most of my furniture was acquired for little cost, and insurance covers most of my medical expenses) I also have a new MacBook Pro (I'm a developer), much to the chagrin of my baby boomer parents, who also think I should drink less Starbucks coffee. There's not a lot of understanding amongst the older generation that rent is high, food is expensive, and that's where most of the money goes, which makes it hard to pay off the debts. Starbucks represents about 1% of my income, the MacBook will be under 2% of my income over the 3 years I'll probably have it, and I'll make back probably 40% of that when I sell it.

JoeAltmaier 12y ago
Huh. Starbuck habit of $5/day (conservative?) over a 200-day work year amounts to $1000. Have to spend $100,000 to make that just 1%.
- jahewson 12y ago
  1% of income not 1% of spending. Also I spend considerably less than $5/day at Starbucks, way less.

xrange 12y ago

One things I don't see mentioned is the use of a mortgage as kind of a forced savings plan. For a bunch of reasons, it is really hard for people to plan/save for the future. That's why there is thousands of years of parables and social convention exhorting people to save and not be in debt (i.e. if it was easy to do, everyone would do it). Buying a larger-than-strictly-necessary house with a mortgage is a way to start applying current money to a need in the future. By making a mortgage payment, they aren't otherwise spending that money on more frivolous items. In 30 years time they'll at least have something tangible, instead of fleeting memories of vacations. Whether that trade of as an individual is worth it is debatable, but on a societal level, it probably is. I think there is a similar, more short-term story with IRS refunds. People could have their paycheck deductions arranged so that their "refund" was nothing. But if it comes out "unvoluntarily", then they are excited to get it back in a lump sum, even if this is the mathematically sub-optimal solution.

grecy 12y ago
By the time you pay off the mortgage you will have paid 3-4 times the value of the property because of the interest. So on a $400k house you will have put $1.2mil - $1.6mil into the savings account, but you'll only have a ~$500k property to show for it (IF the house appreciates, which it hopefully does, fingers crossed). That's a seriously inefficient way to save.
- conjecTech 12y ago
  You get to use the property for that entire time rather than having to wait until you can pay for it in cash, however. Your alternative to paying a mortgage isn't living in a home for free. It's paying rent or being homeless. If your rent is $2,500 a month, you need to subtract about $900k from that amount you're talking about putting in your savings account because it'll be going to your landlord instead.
  - grecy 12y ago
    I have no idea where you live that rent is $2,500 a month, but if it really is, I'm guessing houses aren't $400k.

dionidium 12y ago

Saving is so much easier than earning, and it’s a habit that once built will pay you back for the rest of your life. There's a weird cultural meme that's convinced the middle class that the road to wealth is saving. The road to wealth is earning. This is just kind of an obvious thing, but I guess there are benefits to convincing people who will never earn enough to be wealthy that there are attainable ways to go about it. I'll tell you this much, if buying an iPad makes you broke, then not buying that iPad sure ain't gonna' make you rich. This meme is just kind of annoying as it relates to the middle class, but it's downright dangerous when applied to the poor. It's useless to apply ideals of thrift to people making minimum wage, a level of earning at which no amount of saving can cover even predictable periodic expenses.

bradshaw1965 12y ago
There are pressures from both the earn and the spend side, but the surest path to misery is living above your means. Dickens had it pretty much nailed with, "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."
dimva 12y ago
Investing $4000/month (which is what I do on a salary barely over $100k while living by myself in a 1 bedroom in the East Village, NYC and going out for every meal) at 3% will get you $1 million in 17 years. That means you'll be a millionaire by the time you're 40 if you start doing this right after graduating college. 3% happens to be the rate that stocks have historically appreciated above inflation, so by doing this you'll be a millionaire in today's money. Don't believe me? Try it: http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx http://www.bankrate.com/calculators/savings/simple-savings-c... EDIT: For the poor, there are many structural problems that lead to a cycle of poverty, but it is possible to escape even that with very good money management. I dated a girl whose parents came to America on a raft, with a fifth-grade education. They slept outside the 7/11 where they worked at first (didn't have to spend any money on rent), and ended up owning a large portion of their town by the time they were in their 50s. In short, don't knock thrift. Yes, earning more is always great, but savings combined with compound interest is magical.

ap22213 12y ago

I run into this all the time as I bootstrap my company. I have a deep temptation to try to do everything myself. And, a lot of times, I will do so. But, I have to keep reminding myself that there's way more value in outsourcing things. I have enough extra capital to do so, so there's no reason not to. But, it's a mental challenge to allow myself to drain the bank account, as I instead feel comfortable spending enormous time tinkering with things on the side. Trying to do all the code myself only takes more time. And time is more than money in this business.