Pay off mortgage?

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megamanx3

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Dec 30, 2019 43 Comments

Currently have a 650k mortgage. TC is 350k. After listening to Dave Ramsey I’m thinking about using all my RSUs as they vest to pay off mortgage principal at a faster pace for peace of mind. I should be able to pay off the house fully in 5 years. I already have 1 million saved in a brokeage account and another 800k in retirement savings.

I’m 40 and married with a kid. I’m mostly ok with my job, but I don’t see myself getting promoted anytime soon and I’m getting tired of office politics and playing the perf game.

I work in a small remote office in the midwest (think Chicago suburbs, Madison or Ann Arbor) with little chance for advancement, but the cost of living is very reasonable so my living situation is great (live in a big house on the lake). Work can be meh with a few bright spots here and there. Mostly working over video with people in Mountain View and flying out quarterly. Google is pretty much my only high paying option here, thus I’m eager to get rid of my debt since job isn’t guaranteed forever.

Any thoughts on what to do? Pay off mortage with RSUs or put it in a rainy day account?

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TOP 43 Comments
  • Amazon St. Ranger
    Mortgage rates are so low, I think it’s hard to justify locking up all that capital in equity. Even basic investments such as index funds will return 6+% (conservatively). But I also understand wanting the piece of mind of not having the payment, especially in the market you’re in. At most I’d consider splitting the difference somewhere so that I can get my payment low enough that any job will handle it. I’d then invest the rest in other, higher return options.

    Btw, nice job getting the $1M + $800K racked up!
    Dec 30, 2019 0
  • Facebook public2
    Dave Ramsey is for the lowest common denominator; not you. Take the free money instead.
    Dec 30, 2019 0
  • Google jumpy123
    Since you have 1mil in brokerage, I would just pay it off. Still leaves u with 350 liquid. And then you just start dumping what used to be your mortgage into mutual funds or ETFs. Congrats on basically being set financially.
    Dec 30, 2019 5
    • Microsoft 🐨 koala
      Put it all in s&p 500 of course
      Dec 30, 2019
    • New / Strategy
      NonCodeSW1

      New Strategy

      BIO
      program manager
      NonCodeSW1more
      Pay enough to take chunks off the principal but not so much that you're not net positive when you take into account your ROI? Make sure you're making more in passive income than what you're paying out?
      Dec 30, 2019
  • Google swinglyf
    Refinance for a lower rate or just stick with current. Dave Ramsey’s audience is not op, and incurring taxes on ops investments to pay off what’s probably already low interest debt is an insanely stupid proposal.
    Dec 30, 2019 0
  • Orbital Insight HYkJ18
    I personally know Dave and Sharon Ramsey. Based on what you posted, Dave would say to get that mortgage paid off as soon as you can. There’s no reason to owe anybody anything. You want to eliminate risk.
    Dec 30, 2019 9
    • Apple gPTe27
      Public2 you are so wrong with believing leverage is what leads people to accumulate money. As HYkJ18 tried to explain, you will know who’s been skinny dipping when the tide goes out.

      How’s this for logic —- you will have way more to invest and make it grow aggressively once you have paid off everything instead of trying to borrow on your house and invest that in the market.
      Jan 1
    • Facebook public2
      Leverage is exactly what makes most folks wealthy. Leveraging other people's money to build a business or buy assets is wealth building 101. Your logic is fine but sub optimal. As you alluded to time in the market is more important than trying to time the market. You have to catch the "waves" and the longer you are invested the more wealth you will have. If you wait to invest until you have paid off your house you will have missed years (if not longer) of compounding and will never be able to catch up. If you don't think you can beat 3% returns over a 30 year period then yes dont invest but most of us can do that with our arms tied behind our back. When the tide "goes out" is where I make the most; don't confuse leverage with over leverage. Again not everyone wants to be wealthy and that's ok. I understand that some people are stressed by logic, math, and are so risk adverse they would rather pay off their house and that is ok. It's a a huge missed opportunity but if you cannot handle even low levels of risk; money isn't going to be your thing and not worth sacrificing your peace if mind. It's hilarious how people can refute logic and follow dave or graham blindly but I guess some folks need that. How's that for basic math? :).
      Jan 1
  • Oracle KjCS82
    If you owned your home free and clear, would you take out a heloc in order to be able to purchase stock? There’s your answer.
    Dec 30, 2019 3
    • Oracle KjCS82
      It’s not a right/wrong answer. If you’re comfortable taking out debt to invest then that’s what you should do.
      Dec 31, 2019
    • Facebook public2
      Well, unless you think 1 to 3 is higher than 5 to 7; then there is a right answer :)
      Dec 31, 2019
  • Intuit
    huyendo

    Intuit

    BIO
    You won’t find anything useful here
    huyendo more
    With $1m in brokerage you can simply pay off that mortgage in a few years with the capital gains and dividends alone, not to mention your salary is high compared to your mortgage.

    You’re more financially stable than 99% of home buyers so being overly risk averse will only hurt you long term due to opportunity costs.

    What you’re worrying about is a black swan event where the market loses 90% value and you lose your job at the same time. Highly unlikely. What you could do for a peace of mind is to hedge against your stock portfolio, for a couple thousand you can hedge against your google stock/S&P for a 20% drop, meanwhile you still get to keep the stocks and take whatever long term gains it might bring you in the future. This will give you peace of mind while keeping the potential upside.
    Dec 31, 2019 1
    • Netflix chichvark
      This is rational
      Dec 31, 2019
  • Google topCon
    Two types of people in the world. Those who hate debt, and those who leverage debt. The mostly 1 percenters fall into the latter group
    Dec 31, 2019 0
  • New / Product GutsyDusty
    Let me tell you, as someone who paid off their $900k mortgage years ago, the feeling is amazing. I don't have to worry about the market affecting the security of my shelter. My house is not an investment, it's a necessary cost (and an endless money pit).
    Everyone's risk and reward equations are different. Do what you think and feel is right for you.
    Dec 30, 2019 0
  • Amazon seaseattle
    Is this for you and your spouse, or just you? Great job OP on being financially free!
    Dec 31, 2019 0

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