Helping spouse understand my brilliance

[FIREarly]

Cash Flow is King

Which is making you more cash flow?
Your 2.58% mortgage OR Your investments?

Most likely it is your investments but they are not guaranteed. In my opinion, keep making more money in the market and pay your mortgage off over time.

Maybe there is a middle road. If you choose to speed up paying off the mortgage (paying 1/2 monthly payments every 2 weeks OR pay 1/2 mortgage at beginning of month and 1/2 in middle of month). This is paying off the mortgage faster and keeping money in the market.

End result, do what makes your wife and you happy.

 

[HI Bill]

Which is making you more cash flow?
Your 2.58% mortgage OR Your investments?

Most likely it is your investments but they are not guaranteed.

If one is about to FIRE, then paying off one's mortgage guarantees that one won't lose $ in the markets (with the $ used to pay it off), and guarantees that one won't have a hard time making payments if his/her assets drop by 50%. The OP, and most, would be better off staying fully in the market unless it tanks. But it's also about cushion, contingencies, and WR.


If one's a decade or so out from RE, then that's another matter.

 

[jjuneau]

Your approach is sensible. When we bought our house last year my wife suggested paying cash, but we chose to put about 1/3 down. Our loan rate is not as low as yours, but this was still the best financial choice.

Our investments are a little more aggressive than yours. The major portion of our funds are in mutual funds that have averaged about an 18% return over the past ten years. At that rate, if left alone, then the value will double every four years. Ours won’t grow that fast because we draw from it each month, partly to make the house payment. Still, the balance goes up faster than what we use for the house payment.

 

[Red Badger]

We've been retired 2+ years and just closed on a house with a 5% down, 30 year VA loan. No plans for extra payments or early pay-off. Not having a house payment does not improve my sleep. My Army pension covers the PITI on a very low interest loan. We have plans for some sweat equity improvements, but we are doing those for the improvements, the equity is just a little gravy.

DW is on board. That matters a lot.

 

[MarieIG]

A widow on our block, in her 80's was recently evicted from her home of over 50 years, in a foreclosure proceeding.

She did not understand her husband's brilliance in taking out a large HELOC. (She and her children were commenting that they didn't know why he took out that loan. I actually remembered why - but there was no point in bringing it up.)

I know the husband had a pension. The widow could not afford the payments after he died and her income was reduced. None of the children stepped up to the plate to help her out financially. I do not think her late husband would have wanted that to happen; he just didn't give it much thought.

 

[aja8888]

A widow on our block, in her 80's was recently evicted from her home of over 50 years, in a foreclosure proceeding.

She did not understand her husband's brilliance in taking out a large HELOC. (She and her children were commenting that they didn't know why he took out that loan. I actually remembered why - but there was no point in bringing it up.)

I know the husband had a pension. The widow could not afford the payments after he died and her income was reduced. None of the children stepped up to the plate to help her out financially. I do not think her late husband would have wanted that to happen; he just didn't give it much thought.

So what happened to the 80+ year old widow that was evicted? Did she move in with one of the unsupportive kids?

 

[levindb]

Wife wants to pay off mortgage because she wants to.

You want to keep 3 years of expenses in MM because you want to.

If paying mortgage interest does not get you a significant tax deduction, why not use the MM funds to pay off the mortgage, and then use the Bond portfolio interest to refill your MM funds. You both win, you both lose, and everybody will eventually be happy.

While the MM funds are there for an emergency or market collapse, the Bond fund can provide the same assurance, but provide you more interest income while you are waiting for a disaster to arrive.

Plus you can set up direct deposit so there is no effort involved and you don't have to sleep on the couch.

 

[MarieIG]

So what happened to the 80+ year old widow that was evicted? Did she move in with one of the unsupportive kids?

No. She moved in with another relative, to be near a disabled daughter, who had to be moved into a nursing home (as her the daughter's condition had deteriorated, to the point that the mother could no longer care for her.)