I bought house with loan 350k at 3% - 15 year fixed. Current stocks portfolio value is 90k. What should I do...let it stay invested or sell all stocks and pay against principal. TC 230k. Update1: Will be paying 85k more over the period of 15 years to cover the loan. If I pay 100k today then will save 25k over the period of 15 years, and finish the loan in 10 years. In last 4 years after investing 60k my portfolio is at 90k which is almost 50% return - FANG index ETFs. Can't consider this rate for future as looks like last few months have been crazy up. For the scenario of beating 3% with market return - I m paying interest for borrowing 350k for 15 years. But not investing 350k in stock. Update2: Paying 1000 more every month could do the same save aprox 25k in and pay off in 10 years.
3% is almost like having free money. Unless you are extremely risk adverse, you should keep the loan.
Also, money on hand you can liquidate easily is more valuable than tieing it up in a house you likely don't want to liquidate.
Definitely keep money on stock. It's practically free money. 3% is so low. Super easy to beat with stock market. I personally only put 20% down and made minimum payments even though I had money to pay cash. I'm so much richer for it
You don't think you can beat 3% elsewhere lol? Many low risk stocks have more than a 3% dividend.
At these rates, invest it all in stock and build up your wealth (keep some in a HYS in case of emergencies). Paying off a mortgage is not going to help you build wealth nor is it a guarantee of value.
It is a common question. Are you willing to lose 50% of the money? If you are , go for stocks. If you are not a risk taker and don’t want to lose 50%. Go for principle
Rofl. This is how you stay poor forever...
Come on blind... give us dislike option
Peace of mind has value. Yes historically investing the cash is better. Personally I would rather pay off the house I live in. That goal will make me save harder. Then once it’s bought invest.
I would pay off house. If there’s a crash, you lose on stock. If there’s not a crash, you paid off your house. Win win
Keep your stock. You might be able to trim down your mortgage but if your stock/portfolio doubles in value, you’ll have missed the boat.
Surprises how many illogical answers there are here. Maybe blind is losing it's audience:/
I would pay off the principle if it was me
Reasoning behind that would help a little more
You can build equity quicker by paying off the principal. I’d rather pay the house off as quickly as possible. Less stress down the line.