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Author: Volucris Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5083  
Subject: Re: Financial Independence Per CNN Date: 7/1/2005 11:36 AM
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1) Do you have any bonds in your portfolio?
2) Are they mutual funds, our actual coupons?
3) If they are mutual funds, are you worried about interest rates rising pushing down the NAV?
4) If they are coupons, what is your yield?
5) What is the interest you owe on your house?
6) Is the interest you owe on your house above or below the yield on your bonds?
7) Is the interest yield on your bond at a higher risk than the risk of your paying down your mortgage not reducing your principal?

1. Yes
2. Both
3. No. Capital appreciation/depreciation in a bond fund from the change in the NAV due to interest rate changes is a small percentage of the total return in the looonnnngggg run.
4. Around 9.5%. I got them a long time ago.
5. 5.5% fixed
6. Below if you include the tax deduction
7. The risk of paying down a mortgage is 0. But what is the opportunity cost? That's a little harder to quantitify.
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