Hi. Pay down mortgage or invest in TODAY's market ?

[FIREarly]

Quote:

Originally Posted by filmguyinla I'm not so much looking to pay off mortgage in full but when have extra couple/few hundred dollars each month, would you invest or pay down principle?

The reason for speaking about investing in MSFT is because the original question quoted above asks "would you invest or pay down principle?" That is his final decision but I believe it is worth it to look at MSFT as an option.

[jmp470]

Pay off the debt. It’s liberating.... We are on a kick to eliminate all debt before I try to retire again.... First time was good and taught me several things.

[Housewife]

FWIW, we recently paid off our mortgage. It was a large 15-year mortgage with substantial P&I payments. We struggled for a while trying to decide whether to keep the mortgage outstanding for a larger investment pot. We eventually pulled the trigger most due to: (1) Trump’s new tax law reduced the value of mortgage interest deduction, (2) the persistently low interest environment, particularly for investment grade FI instruments, and (3) Significant cash flow needs potentially constrain our investment allocation flexibility. Paying off the mortgage is indeed a relief for us psychologically. Although on the flip side, i have also noticed that we are spending more liberally on other stuff because of the lower (perceived?) expenses. The degree of financial discipline is just not the same any more.

[jmp470]

Quote:

Originally Posted by Housewife FWIW, we recently paid off our mortgage. It was a large 15-year mortgage with substantial P&I payments. We struggled for a while trying to decide whether to keep the mortgage outstanding for a larger investment pot. We eventually pulled the trigger most due to: (1) Trump’s new tax law reduced the value of mortgage interest deduction, (2) the persistently low interest environment, particularly for investment grade FI instruments, and (3) Significant cash flow needs potentially constrain our investment allocation flexibility. Paying off the mortgage is indeed a relief for us psychologically. Although on the flip side, i have also noticed that we are spending more liberally on other stuff because of the lower (perceived?) expenses. The degree of financial discipline is just not the same any more.

Reminds me of when people asked me how much my plan costs! I always told them, as much as the wife and I were willing to spend!

But with no mortgage, I believe you have more freedom. Maybe I’m just thinking emotionally about it.

[Maidensong]

Real estate we live in is almost always an emotional decision. We use numbers to justify our choices, but in the end, it's where our lives play out and we feel strongly about it. Which is why I suspect my comments struck a nerve. I didn't intend to offend anyone who opts not to pay their mortgage off early. I merely shared how we felt about it.

And lest you think we had a magic wand to wave the indebtedness away, let me assure you that is not so. We threw extra principle payments at the debt for many years. Perhaps the financial discipline involved is why people are congratulated when the mortgage is paid off early.

One other thing: We hope to leave an inheritance to our children. They may decide to sell our home and rental properties, but at least while they are trying to do that, they won't be burdened by a monthly mortgage payment. My cousins inherited a brand new lake home from their dad. None of them lived near enough to use so they put it on the market. It took 3 years to sell. And they had to pay the mortgage every month until it did.

[DeborahB]

I hoped to not have a mortgage in retirement but I moved and bought a house. I don’t have children or parents to worry about. I loved not having a mortgage. But the escrow for my taxes and insurance is close to $900 a month. My mortgage is at 4.125%. So I grit my teeth and remember that logically,I do better with a huge interest deduction.

[Eastbayboy]

Quote:

Originally Posted by ERD50 So your AA is 0/100? Good point, but it is generally one in favor of keeping a mortgage. The $40K will pay a mortgage for a long, long time. And the utilities, property tax, maintenance, insurance etc, and all your other non-house related bills, like food. If you pay it off, you have $40K less to cover property tax, maintenance, insurance etc. That is what could put you in a bind. Hogwash. Maybe it feels like a weight on your shoulders, but many of us are just fine with it, and have benefited immensely from it. Not all debt is bad debt. That kind of thinking holds you back from taking advantage of good opportunities. -ERD50

What he said! 👍