I have some extra $$ from my monthly budget and want to make a good use of it. Should I pay extra $$ on mortgage or invest in stocks?
Mortgage is good debt, keep it as long as possible and invest your money in VTSAX
You need to give us some numbers if you want a valuable advice
Anchoring fallacy. If your house was paid off, would you take a mortgage on it to invest on margin in this stock market?
At this time, I will take as much money I can get on 2.5% rate.
If your interest rate is lower than your avg. returns in the stock market then you invest it in the market. Otherwise pay off your debt. Most people can easily get over 4% return on their investments so if your mortgage interest is 4% or less then you’re better off investing it.
Add 2% (to account for inflation) to your mortgage interest rate if you really wanna be strict about determining which way to go.
1 extra payment per year takes a 30 year mortgage down to a 23 year mortgage; posting for general awareness. Per your original question, go 50/50 toward each.
I feel like if stocks were to crash your property value would go down too and you’re screwed either way. Just put it in stocks.
Never payoff a mortgage
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If it’s enough of an amount, split the amount between the two. I know there are many naysayers who are opposed to paying off a mortgage early, but it gives you peace of mind, builds more equity, and, let’s face it, no one should have a mortgage by a certain age - even with low interest rates.
Why so?
Risk, you don’t want to risk losing your house to foreclosure at old age