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<blockquote data-quote="Thomas Rogers" data-source="post: 767655" data-attributes="member: 60724"><p>Caymen,</p><p></p><p></p><p></p><p>I've got it now.</p><p></p><p></p><p></p><p> You pay the govt extra each paycheck, you pay extra on your car and home loans so that you have these "forget about them" nest eggs that have money in them, either at the end of the year, or when you go to sell the house or trade in the car. In the case of loans you are increasing your equity, quicker.</p><p></p><p></p><p></p><p>Just remember, equity of this type has no true return (it doesn't grow by any other means that what you put it in) and equity of this kind can't easily be tapped without a significant event (sale of the item, refinance, etc). The equity seems to have a return in that you avoid paying some interest by shortening your loan duration. But that's it. It's not a return, its an expense avoidance. A true return has your money making money for you; the output is greater than the input. Each dollar you get out of the type of equity you are talking about comes from a dollar you put in.</p><p></p><p></p><p></p><p>Just so we are clear on those things.</p><p></p><p></p><p></p><p>Good luck.</p><p></p><p></p><p></p><p>TJR</p></blockquote><p></p>
[QUOTE="Thomas Rogers, post: 767655, member: 60724"] Caymen, I've got it now. You pay the govt extra each paycheck, you pay extra on your car and home loans so that you have these "forget about them" nest eggs that have money in them, either at the end of the year, or when you go to sell the house or trade in the car. In the case of loans you are increasing your equity, quicker. Just remember, equity of this type has no true return (it doesn't grow by any other means that what you put it in) and equity of this kind can't easily be tapped without a significant event (sale of the item, refinance, etc). The equity seems to have a return in that you avoid paying some interest by shortening your loan duration. But that's it. It's not a return, its an expense avoidance. A true return has your money making money for you; the output is greater than the input. Each dollar you get out of the type of equity you are talking about comes from a dollar you put in. Just so we are clear on those things. Good luck. TJR [/QUOTE]
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