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re: Pay $1,000 extra to house or invest?
Posted on 6/15/16 at 11:06 am to TexasTiger34
Posted on 6/15/16 at 11:06 am to TexasTiger34
Thank you guys for the advice. I do have a 401K and it is maxed as far as I am willing to go at the moment (company match, etc) I am still struggling with one thing in my thinking though. I get that I can build wealth with saving the $1K a month into something that compounds, but I don't get how freeing up that money per month would not help me after it is paid up. I freely admit that I am a per month type person. I look at finances and how much money I have to work with per month vs. long term. I simply cannot grasp how paying off the mortgage is not a good idea to consider with all of the other options as well. Is it strictly because paying off 120K towards a mortgage vs. investing the $120K and earning interest during 10 years that makes it better? Because in my mind I see that I can be mortgage free in 6 years and that would free up a tremendous amount of cash of future earnings. Yes it does leave me with nothing to show for it liquidity-wise, however, if I stay here long enough than won't that count? I am just trying to understand from a different perspective.
Posted on 6/15/16 at 11:21 am to statman34
Because mortgage interest is tax-deductible and as long as you invest in a product that is over 3.5% you win.
You can put thee thousand a month into some type of investment that yeilds more than 3% and when the time comes that the investment is the same as the principal then pay off the house if it means that much to you
You can put thee thousand a month into some type of investment that yeilds more than 3% and when the time comes that the investment is the same as the principal then pay off the house if it means that much to you
Posted on 6/16/16 at 9:04 am to statman34
quote:
I get that I can build wealth with saving the $1K a month into something that compounds, but I don't get how freeing up that money per month would not help me after it is paid up.
This is really a question you have to ask yourself. Do you think you can make more money by being mortgage free in 6 years or by investing $1k per month over 10. Most have already told you what they think...
Posted on 6/16/16 at 2:13 pm to statman34
quote:
I freely admit that I am a per month type person. I look at finances and how much money I have to work with per month vs. long term. I simply cannot grasp how paying off the mortgage is not a good idea to consider with all of the other options as well. Is it strictly because paying off 120K towards a mortgage vs. investing the $120K and earning interest during 10 years that makes it better?
So this is an important question, what would you do with the cash that you were spending on your mortgage once its paid off?
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