re: Should I pay extra towards my mortgage every month?

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So you'd rather pay $500 a month more and have no cash we're you to lose your job than have a couple hundred k in cash?

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Where did he say that paying extra $500 month left him no cash in savings if he were fired? $500 per month / $6000 year over 12-15 years is 200k in cash????

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Case A: I pay off my mortgage and then the next day I lose my job. Suddenly I wish I still had the money.

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I think that having your Biggest Debt and monthly note GONE would be a huge advantage, given this scenario. But, what if he purchased his house at age 30, paid house off by 45 and didn't lose job? He may not have a FAT retirement acct like you, but your still in debt and hes not. He now has 20+ years to fund the hell out of his retirement.

If you want to pay the 4% note on 250K for 30 years, go right ahead. If you want to pay the extra and eliminate your mortgage in 15 years, do it. I actually disagree with "Dave Ramsey" in a low interest rate environment we live in today. I get both sides of the debate and to answer the OP, if the $500 extra doesn't hinder you, go for it. As you can tell, there are people that want that FAT IRA and still have debt and others who want to eliminate debt, then fund the hell out of retirement. To each his own!

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The difference here is the guy who is consistently investing has years of accumulation that you will never be able to catch up. He also has the liquidity that home equity doesn't provide.

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I get that, but this is also assuming that each individual has the same goals and standard of living. If I have no debt and not a high standard of living, $1MM in retirement may be exactly what I need. Then again, the same scenario, but my standard of living is higher, then $1MM isn't close and def need the missed years of accumulation. He may have missed out on 12-15 years, but if he takes the mortgage payment plus $500 and rolls it straight into his retirement(401k,IRA, Roth IRA), he's playing catch up, I get that, but over 15-20 years, He's got a nice acct. Just way to many variable to say this is the way or NO, it has to be this way.

Don't assume that by him paying $500 month towards his mortgage means he's not contributing to any retirement plan. Might not be "MAXED OUT" but doesn't mean he's missing out.

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I get that, but this is also assuming that each individual has the same goals and standard of living. If I have no debt and not a high standard of living, $1MM in retirement may be exactly what I need. Then again, the same scenario, but my standard of living is higher, then $1MM isn't close and def need the missed years of accumulation

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The point is you can change your standard of living without doing anything besides putting money your already paying into something else. Why live at a lower standard for shits and gigs?

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It is up to the individual to put values on that.

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I don't disagree, but valuing "peace of mind" at 10s to a couple of hundreds of thousands of dollars is just pretty extreme to most people with financial sense.

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There is also such a thing as re-casting or re-amortization for those that have paid down principle early where you tap into the pre-paid principle amount to lower your monthly mortgage responsibility.

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true but many lenders won't recast. Also, you still have to do it. Investments just come that way.

Investing usually offers more flexibility. Paying down a loan is probably lower risk, and might help with a feeling of security.

I like the idea of paying down a home but when you look at the math, it just doesn't make sense. Although once we hit our retirement number, we will probably set up a fund to pay off our home.

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I get that, but this is also assuming that each individual has the same goals and standard of living. If I have no debt and not a high standard of living, $1MM in retirement may be exactly what I need.

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I understand different standards of living, but if one simply puts the same money into a different pot he will reach his $1MM earlier. Doesn't the ole boy want to retire and jump into his pirogue earlier rather than later?

Is the cash going in a qualified or non qualified acct?

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Even if it was in a retirement vehicle, I believe you can receive a hardship withdrawal if SHTF.

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Even if you didn't if you don't pull out in the first 2 or 3 you'd still come out ahead even with the penalty.

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I understand different standards of living, but if one simply puts the same money into a different pot he will reach his $1MM earlier. Doesn't the ole boy want to retire and jump into his pirogue earlier rather than later?

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Does being out of debt earlier allow him to get to that pirogue earlier, too?

If he's only putting $500 towards house and not some other Amt in retirement, I agree. If he's putting $500 towards home and funding retirement, don't see a down side. Especially if after year 15, put extra $500 and part of mortgage towards retirement for remaining 14 years.

Basically, 1 guy, 30 year old puts $1000 month towards retirement at 7% for 30 years and paying mortgage on 250k home. No extra towards home, so 30 years to pay off. Guy #2 puts $500 month extra towards 250k home, $500 towards retirement. At year 15, hone is paid off (guy 1 still owes 150k)and allocates extra $500 towards retirement (now $1000) and $500 from mortgage towards retirement. 15 years of $1500 month towards retirement at 7%. What do both accounts look like? I'm really asking. I'd like to see how much Guy #2 is behind the first for not allocating extra in early years. Guy 2 will be saving $1000 month / $12000 year / $180,000 over 15 years by mortgage being paid...does he stack money in bank, max another acct?

Guy 1 year 15
Guy 2 year 15

Guy 1 year 30
Guy 2 year 30

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No disrespect, but if you can't do this math you don't need to be giving people financial advice.

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Noted!

Can you answer the question?