Reply to Walk away from $1 million a year?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]OP here.  I should add that all the kids are out of college and married.  We have a mortgage of about 2k a month and no other debt.  [/quote]

I mean, I'd probably pay off the house. I know its not necessary but just a mental thing before quitting work. But obviously you can easily do what you are proposing. [/quote]

[b]I'd work one more year, pay off the house, get everything in order, then walk away.[/b]  [/quote]

Another miserable year, another million dollars that's taxed to death and ends up being a lot less.  [b]Then you pay off the house and have no mortgage but your overall net worth doesn't change.[/b]  You just have more of it invested in your house and not generating any income.  So your portfolio generates less money but you have no mortgage.

Isn't that six of one, half dozen of the other, except you've lost another year?    [/quote]

[b]You do not understand net worth, my friend.[/b][/quote]

Sure I do.  It's gross assets minus liabilities.  If you have, say, $5 million in stocks/bonds and a house worth $1 million but with a $500k mortgage, then your net worth is $5.5 million.  If you take $500k from the stocks/bonds and pay off the mortgage you now have $4.5 million in stocks/bonds and $1 million in your house -- $5.5 million again.  No difference.   [/quote]
[b]Then you don’t understand math?
The money doesn’t come out of investments if you work another year - that’s what the poster was saying. Work another year and pay the house off.[/b] [/quote]

OP here.  Why separate things like that?  It's all one big pot.  What you're basically saying is work another year and increase your net worth.  Ok.

[/quote]

No, it isn't one big pot.  Some net worth generates income; some doesn't.  A paid off house doesn't.  By working another year, you can keep the income-generating portion of your net worth as is, with no large withdrawals, and eliminate a monthly liability form your books.

You don't have to do this, of course - you could retire right now.  But, give your lack of financial understanding, perhaps it's better if you work longer and give yourself a bigger cushion.  
[/quote]

Respectfully, it's not a lack of financial understanding.  I understand that if I worked another year and paid off the mortgage I'd have the same portfolio generating the same $200k a year but wouldn't have a mortgage.  You're simply suggesting that you, personally, wouldn't feel comfortable with $200k a year and a $2k a month mortgage.  I get completely get where you're coming from.    [/quote]

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