The Investment Scientist

Posts Tagged ‘mortgage

images-16A client I visited shared with me that he is very burdened by his debts. He has a primary mortgage, a secondary mortgage and a personal loan. He asked me whether he should pay off the debts and in what sequence. That’s a fantastic question.

Here are the partial details of his debts (I’ve concealed the amounts).

  1. The primary is a 15 year fixed rate mortgage with a rate of 3%.

  2. The secondary is a 5 year ARM with a current rate of 2.5%.

  3. The personal loan has a rate of 5%.

Here are my recommendations to him.

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Retirement Nest EggI met with three prospective clients on my trip to Los Angeles last week. I did a quick financial review with each one of them and gathered some lessons learned as well.

Prospective client A is a physician in his late 60s. He has already reached retirement age but he needs to keep working since he has less than $1mm saved for his retirement.

All that money is in tax deferred accounts, meaning far less than $1mm is available for his retirement. This is NOT retirement security.

Client A is not an extravagant person, so why is he in such dire straits?

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Author

Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.

Twitter: @mzhuang

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