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Seeking feedback on next financial move...
Old 01-16-2020, 05:07 AM   #21
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Seeking feedback on next financial move...

We actually did both but right now if I didnít have one of those Ďfor life jobsí I think Iíd make sure I had a big emergency fund.

1. The market is astronomically high
2. No matter what your political persuasion is the arena is Ďvolatileí
3. Although apparently a lot of people are happy with the US. - a good number with guns near all that Persian Gulf Oil are not. I know their always angry but right or wrong someoneís just sprayed water on the hornets nest.

Respectfully I donít claim to be able to predict the market but to me it seems the phrase Ďpigs get burnedí is in order. I looked at my
Portfolio and discovered even thought Iím no longer on the accumulation phrase itís grown appreciably. Iíve sold and will sell some more.

Normally Iím a debt-free-is-absolutely-awesome-guy but 2008 feels like yesterday. I know people who have never really recovered..
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Old 01-16-2020, 06:56 AM   #22
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Originally Posted by pb4uski View Post
+1 If you lose your job or have an emergency that you need cash it is a lot easier to tap investments than your home equity.
Originally Posted by The Cosmic Avenger View Post
But conversely, if you lose your job it's very easy to stop contributing to a brokerage account, but not so easy to keep paying a mortgage. Personally, I think on that account it's close to a wash.

Either way, I think it comes down to your style of financial management. How long do you have on the mortgage? I assume from your username that you want to retire in 14 years. Do you want to spend a lot of time on actively managing your finances to maximize your return, or do you want to do more of a three-fund, set-it-and-forget-it kind of plan? Because if it's the former, then I would advise you to pay the minimum on the mortgage and invest any extra money in taxable accounts. If it's the latter, I'd recommend timing it so your mortgage is paid off (or close to it) when you retire. And whichever method you choose, having some money in taxable investments is a good idea for the years between your actual retirement and FRA/Medicare.
Not close to a wash!

OP will be investing or making extra principal payments of $500/month. If his take home is $4k a month and his monthly living costs are $3.5k a month before the extra $500/month in investment or principal payments then if he loses his job that $3.5k/month needs to come from somewhere. To be able to say... "whew, I can defer making $500/month in extra principal payments on my mortgage" does nothing to help provide the $3.5k needed for monthly living expenses.

If he has an investment account he can use it... being able to not make extra principal payments is next to useless to pay for food, car payments, property taxes, credit card bills, or whatever. If he has $10k or $15k accumulated when he needs it that will be a lot better than having a mortgage that is $10-15k lower.

The second part is silly too. The OP can simply invest in a target-date fund if he wants to keep it simple. Investing style is a totally separate question from whether to make extra principal payments.

Think for goodness sake.
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
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