Comments on: Put Savings Towards Mortgage Balance, or Nah?

By: Gasem

Gasem — Mon, 23 Apr 2018 01:01:04 +0000

One the average you make more investing,and also don’t miss the effect of inflation. If you pay the mortgage now you pay with expensive dollars compared to future cheap inflated dollars, a kind of reverse compounding. Remember when you buy equities you own shares not just dollars, shares tend to keep up if not exceed inflation

By: Dr. Cory S. Fawcett

Dr. Cory S. Fawcett — Sun, 22 Apr 2018 13:03:11 +0000

I agree with paying off the house. I paid mine off years ago and have been very happy with that decision. If you need more ammunition to help you with the decision, read my book, The Doctors Guide to Eliminating Debt. There is no good reason for you to keep the mortgage at this point, especially if it is tugging at you to pay it off. You already decided to pay it off early, that’s why you put and extra $1,000 a month into it. Go for it, you won’t be sorry.

Dr. Cory S. Fawcett
Prescription for Financial Success

By: TJ

TJ — Fri, 13 Apr 2018 04:38:57 +0000

In reply to TJ. Also if the market crashes 40% and you've got the guts, with that amount of home equity you can cash out the HELOC and dump it in the stock market. 3.625% garraunteed return for now, then lots of greenbacks sitting back in the brick and mortar piggy bank you've already saved.

By: TJ

TJ — Fri, 13 Apr 2018 04:29:21 +0000

I would keep the 401k as it is. Max it out. I didn’t see the loan on the mortgage if it was a 15 or 30 year. Typically the interest on a 15, or in your situation even a 5/1 arm may be substantially lower than the standard 30 year fixed, so I’d look into that. Get a HELOC, it costs like 500 bucks if you get in a pickle. I like to keep at least 4-6 month safety net just in case. The remaining extra cash at the end of every month, since you are in your thirties would go 30% debt reduction, 70% into a taxable account. No T bill is gonna yield 3.625%.

We don’t waste money on cars, but do splurge on experiences and vacation at least a few times a year. You will be millionaires befor you know it.

Cheers,

By: Jill

Jill — Thu, 12 Apr 2018 19:39:18 +0000

If it were me (I feel the same leanings and am about to pay off our mortgage), I’d do the whole $122 to mortgage. Then I’d keep everything else the same except lower the weekend expenses big time, anything that doesn’t totally bring you lots of joy or sub those out with free and lower cost things. Use whatever you save there to send more to index funds. Then I would reassess how much you would need to knock the mortgage out in 12 months. Up your payments to make sure it’s done in a reasonable time frame. I would send those bonuses to the index fund and only rent off-road vehicles until the mortgage is done. Over 12 months starts to make you very antsy when you’re that close. Once it’s Done you can load so much extra money into investments you won’t have missed out on a whole lot for delaying that extra push only one year. Especially if it continues to go down.

By: J. Money

J. Money — Thu, 12 Apr 2018 17:59:14 +0000

In reply to NICOLE C. God job killing your debt though! Still very much a HUGE win!

By: NICOLE C

NICOLE C — Thu, 12 Apr 2018 17:35:18 +0000

I still kick myself from time to time for the decision I made to pay off the student loan 8 years ago.
The stock market was slowly recover from crash and the old me was burnt by credit card debt. At that point, all I want is to get out of debt, any debt.
Also, I wasn’t into personal finance yet to know what opportunity cost is.
I probably wouldn’t pay off my mortgage. But Only you would weight out what more important to you, either being debt free or the potential earning.

By: J. Money

J. Money — Thu, 12 Apr 2018 10:50:50 +0000

In reply to Ms ZiYou. Are they doing well with that strategy in general? I know there's a lot of people who only use cash, never take out loans, never invest, etc, but still doing good overall with $$$ - just not *great* with the investing in the mix, which I agree is key :)

By: Ms ZiYou

Ms ZiYou — Thu, 12 Apr 2018 07:32:38 +0000

Completely agree with the sentiment personal finance is always personal – if I was in their situation I’d invest rather than pay off the mortgage. As I’m a numbers geek, and I believe that market returns will beat the mortgage rate in the next 10 years.

My parents are vert risk adverse and all about paying off debt, and never invest, so it’s been a deliberate decision to try and take a different path myself.

By: J. Money

J. Money — Wed, 11 Apr 2018 13:35:35 +0000

In reply to Christy m. A nice treat for all that saving/investing/debt killing :)