Its not so much the equity. If the S&P historically returns 8-10%, why would you pay your home down when you possibly have a 2.5-3.5% interest rate.
Time For An Investment Manager?
- Thread starter 03cobra#2
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Stability
It's good to know that if anything goes down having a paid off house to fall back on is good security.
The S&P has returned 8-10% since 1980. Thats pretty stable.
Only recently. Paying down your mortgage outperformed the S&P for 43 years ending in 2013. The stonks go up generation doesn't realize there's another side to what we've seen the past decade. Apparently nobody learned their lesson in 2008.
Should I Pay Off My Mortgage or Invest the Money?
MoneyGeek analyzed historical mortgage rates and the S&P 500 returns over a 43-year period to find the best answer to whether you should pay off your mortgage.
Of course that's because interest rates were higher. Paying down your mortgage instead of investing in stocks is not outperforming because it leaves you nothing in your retirement accounts as well as a house that may not have appreciated much depending on location and what was paid for it. I, for one, would NEVER have tried to pay off the house in those days instead of putting money into other investments.Only recently. Paying down your mortgage outperformed the S&P for 43 years ending in 2013. The stonks go up generation doesn't realize there's another side to what we've seen the past decade. Apparently nobody learned their lesson in 2008.
Should I Pay Off My Mortgage or Invest the Money?
MoneyGeek analyzed historical mortgage rates and the S&P 500 returns over a 43-year period to find the best answer to whether you should pay off your mortgage.www.moneygeek.com
Update. Decided against using any type of financial advisor. I have consolidated my funds to A 3 fund approach (index fund, bond fund, and foreign fund) at a 60 / 20 / 20% allocation to give a nice broad scope to hopefully match the market. After dissecting my portfolio I realized my funds had pretty high expense ratios (.60 to.80) and total return was less than the market over the last 5 years. So I have ditched that stuff and went to much lower expense funds (.02-.05%). I did a lot of reading on this sight the last few months. Slow and steady wins the race we shall see.
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