We will have a total of 240,000 in our bank account next year. We currently have a mortgage of 300,000. Our house is currently worth 425,000. we are thinking of paying it down 200,000 next year and recasting the mortgage to gain more income. We feel this will allow us to have piece of mind that our family will always have a roof over our heads in case hard times come. We also feel it will allow us more income over the years to put into our investments for retirement. Currently, we are saving 85,000 annually. Once the house is payed down the plan is to invest more into our current index fund (S&P 500) for retirement as well as buy some more small rental properties. We do not have any other debt. We own everything except our house. We also live a frugal lifestyle. We cannot decide on this and would really appreciate your input. Would this be a smart decision???
Should we pay down house and recast mortgage for peace of mind and to build more income for years of investing
Take a look at the Phases of Investing here:
Assuming that you’re already on pace for a healthy retirement (which I suspect you are), then you’re probably on phase 6. If so, then yeah, I’d go for it. There’s nothing wrong with a paid for home. I’ve never met a broke person with a paid for home, and investing heavily in index funds with the full weight of their income. Sounds like a path to low stress with money and massive wealth. That’s a path that sounds pretty darn good to me.
Yayy!!! I’m super excited. Thankyou so much for the above information and your response! It sounds like I won this discussion! Low stress is exactly what we need and having debt really freaks me out. Lol So we will be mortgage free by the time I’m 37 and my husband is 40. We should meet 1 million networth by the time I am 40. My plan is to grow the rest of our millions through our investments.
Thankyou for inviting me to your site. As always you are extremely informative. I will be “investing” alot of my extra time here.
Haha. That’s amazing. Paid for home and millionaires by the age of 40. That’s called winning with money. Don’t let anyone tell you you should be burying yourself in debt to leverage to greater returns. To what end? More stress, more risk and still have as much money as you need? Happiness doesn’t come at a certain net worth. It comes from freedom and choices, which you’re buying yourself with these decisions