I owe about $400k on my $1.2million home. Because I plan to keep the home forever, I consider only the debt when calculating my net worth. Using that framework I have a net worth of about $1.9million. I feel like I have enough invested that I can redirect some of my income towards paying off my mortgage. I am taking about 50% of what I would have invested to put towards the house.
My rate is 4.625% and VMFXX is at 5.3%. Because the MM pays more than my mortgage interest rate, I am keeping the cash in the money market until it earns less interest than my mortgage charges. Does that math check out? Should I be thinking about this differently? And does should I think about this differently as I approach retirement? I feel like the closer to retirement I get, the more it makes sense to pay the house off.
Or should I continue to invest only? Markets have historically gone up over time, but I like the certainty of reducing my debt to get closer to my retirement goals. And if something were to happen like I or my wife lost our jobs, I'd rather face that with a paid off house.
My rate is 4.625% and VMFXX is at 5.3%. Because the MM pays more than my mortgage interest rate, I am keeping the cash in the money market until it earns less interest than my mortgage charges. Does that math check out? Should I be thinking about this differently? And does should I think about this differently as I approach retirement? I feel like the closer to retirement I get, the more it makes sense to pay the house off.
Or should I continue to invest only? Markets have historically gone up over time, but I like the certainty of reducing my debt to get closer to my retirement goals. And if something were to happen like I or my wife lost our jobs, I'd rather face that with a paid off house.
Statistics: Posted by bogletron — Tue May 21, 2024 11:37 am — Replies 7 — Views 537