cardude
Full time employment: Posting here.
- Joined
- Feb 21, 2006
- Messages
- 599
I should be able to quit working soon, and I'll get a decent sized lump sum of cash when I do (next 2-3 months if all goes well), and I'm trying to figure out if I should pay off my mortgage or not.
My initial thinking was that I should keep a mortgage (but hopefully refinance at a lower rate) so I didn't tie up so much money in an investment that IMO will gain at best 1-3% due to my location and buy in price (I didn't steal it). Also, I liked the idea of keeping a higher cash level by not paying it off so I could take advantage of opportunities during a recession. Plus, I think my portfolio (but not the cash) will over time earn more than the mortgage cost of 6.5% (or whatever I can refinance it at-- I'm shooting for 5%).
Am I on the right track, or am I missing something completely obvious?
- If I paid off the mortgage I will still have 7 years worth of cash to live on.
- My mortgage is about 8% of my portfolio, including all cash.
- My mortgage rate is currently 6.5%.
- My investment portfolio, not including cash, has gained around 8-10% per year for the last 10 years or so. 100% stocks and a couple of mutual funds, almost all (95%) in after tax investments (non 401K, IRA I'm trying to say).
- I will not have any W2 wages, or if I do they will be 30K or less.
My initial thinking was that I should keep a mortgage (but hopefully refinance at a lower rate) so I didn't tie up so much money in an investment that IMO will gain at best 1-3% due to my location and buy in price (I didn't steal it). Also, I liked the idea of keeping a higher cash level by not paying it off so I could take advantage of opportunities during a recession. Plus, I think my portfolio (but not the cash) will over time earn more than the mortgage cost of 6.5% (or whatever I can refinance it at-- I'm shooting for 5%).
Am I on the right track, or am I missing something completely obvious?