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I could but I donít want to... #7432484 02/12/19 11:29 PM
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Sparky45 Offline OP
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I have a financial question for you guys dealing with my land.

I still have about 6 years left the note on my land.

Right now, I donít have any other debt but the land note. My home is paid off as well as my vehicles and I donít have credit card debt. I would like to pay off the land note by cashing in some investments, but I am making about 4 percent more off of the investments than the interest is on the land note so I think I should not cash in investments just to pay it off so I can say I am totally debt free.


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Re: I could but I donít want to... [Re: Sparky45] #7432509 02/12/19 11:58 PM
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If you have the means, double or more your loan payments which will also reduce interest paid.
I wouldn't cash out investments to pay off a land loan unless your income has substantially reduced or ceased and you don't see it returning to very near previous level.

Re: I could but I donít want to... [Re: Rustler] #7432532 02/13/19 12:23 AM
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Originally Posted by Rustler
If you have the means, double or more your loan payments which will also reduce interest paid.
I wouldn't cash out investments to pay off a land loan unless your income has substantially reduced or ceased and you don't see it returning to very near previous level.


That sounds pretty solid
I can pay larger sums down on the principal and I could do that a few times a year


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Re: I could but I donít want to... [Re: Rustler] #7432636 02/13/19 01:52 AM
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Originally Posted by Rustler
If you have the means, double or more your loan payments which will also reduce interest paid.
I wouldn't cash out investments to pay off a land loan unless your income has substantially reduced or ceased and you don't see it returning to very near previous level.


Did this myself and knocked off 3-4 years on my note
..Works

Re: I could but I donít want to... [Re: Sparky45] #7432811 02/13/19 05:10 AM
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There is no better "investment" than land and it's can't be taken away with the stroke of a key!

Re: I could but I donít want to... [Re: Sparky45] #7432814 02/13/19 05:28 AM
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Also, don't forget the interest is tax deductible.


If I'm not hunting something I must be dead.
Re: I could but I donít want to... [Re: Sparky45] #7432979 02/13/19 02:44 PM
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Worst case scenario, if you lose everything and have the land paid off, you keep the land. That's the emotional way of looking at it. Not the smart way of looking at it. If your investments are stable and out gaining your land it would be a mistake to pull the money and pay the land off. Keyword being stable investment. There are definitely better investments than land. Not all investments are even the same. Long term, short term, high risk. They all have benefits. Frankly, if your asking this question you should probably seek the guidance of an accountant or wealth manager. A professional getting a look at your finances can help you make some smart moves with your money. You just have to be smart to so you can insure you find a good one. Best of luck.

Re: I could but I donít want to... [Re: Sparky45] #7433022 02/13/19 03:16 PM
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Good advice guys..thanks


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Re: I could but I donít want to... [Re: Rustler] #7433221 02/13/19 06:43 PM
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Originally Posted by Rustler
If you have the means, double or more your loan payments which will also reduce interest paid.
I wouldn't cash out investments to pay off a land loan unless your income has substantially reduced or ceased and you don't see it returning to very near previous level.



I would agree, if you sell the investments to pay off the land you're also going to trigger some capital gains taxes most likely say 15% of the profit on the investment. I'm all for Dave Ramsey but selling productive assets to pay off debt that isn't putting a big dent in your wallet just to say you're debt free doesn't make a whole lot of sense. If you hit hard times and need to pay off in the future you can always sell the investment then and pay it off.

Re: I could but I donít want to... [Re: Sparky45] #7434186 02/14/19 08:33 PM
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In the example you gave, you would be cashing in part of an asset (investment account) to pay off another asset (land). So in effect you would be trading one asset for another, and have a net gain of 0. However, long term, it appears that you would be losing the opportunity to make a higher return on the investment account. I would do it for a house that is your primary residence, but not for this.

Re: I could but I donít want to... [Re: Sparky45] #7434201 02/14/19 08:51 PM
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Also, remember this. You are paying less and less interest on a decreasing balance on your land. However, your investment is making more and more money on an increasing balance. Considering that your land is the only debt that you have...and it may be tax deductible, You are better off continuing to make the minimum payments on the land, and take the $ that you would have paid towards the land and invest it instead. Of course, for this to make sense, the investment does need to be fairly stable, and have as high of a return or higher than the interest you are paying on the land.


Originally Posted by txhuntingguide
If I choose to hunt in a coon tail hat, a pink tootoo and hip waders that is my fine...
Re: I could but I donít want to... [Re: notamtchance] #7434212 02/14/19 09:07 PM
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Originally Posted by notamtchance
Also, don't forget the interest is tax deductible.

Think this depends on whether the land has a home structure that is resided in for xxx number of days, etc., business usage of property, etc. For pure unimproved land, don't believe that is interest deductible, at least what I was advised...

Re: I could but I donít want to... [Re: DQ Kid] #7434222 02/14/19 09:18 PM
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Originally Posted by DQ Kid
Originally Posted by notamtchance
Also, don't forget the interest is tax deductible.

Think this depends on whether the land has a home structure that is resided in for xxx number of days, etc., business usage of property, etc. For pure unimproved land, don't believe that is interest deductible, at least what I was advised...

I believe you are correct, however, it still would be a better idea to keep the investment earning more money than paying off a low interest loan.


Originally Posted by txhuntingguide
If I choose to hunt in a coon tail hat, a pink tootoo and hip waders that is my fine...
Re: I could but I donít want to... [Re: Thisisbeer] #7434308 02/14/19 11:11 PM
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Originally Posted by Thisisbeer
Worst case scenario, if you lose everything and have the land paid off, you keep the land. That's the emotional way of looking at it. Not the smart way of looking at it. If your investments are stable and out gaining your land it would be a mistake to pull the money and pay the land off. Keyword being stable investment. There are definitely better investments than land. Not all investments are even the same. Long term, short term, high risk. They all have benefits. Frankly, if your asking this question you should probably seek the guidance of an accountant or wealth manager. A professional getting a look at your finances can help you make some smart moves with your money. You just have to be smart to so you can insure you find a good one. Best of luck.


This is not correct. If you lose everything, the only exempt assets are your homestead, retirement assets and life insurance. All other assets are subject to judgments and become part of a bankruptcy estate if bankruptcy is filed. The IRS and your creditors can get to any nonexempt assets including land that is free and clear.

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