34 min
Should I Payoff My Mortgage Early or Invest? Broken Pie Chart
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- Investing
Strong opinions exist on each side of this debate. Some believe plowing money to pay off the mortgage early is better. Others would rather step up their periodic investments and keep a low rate mortgage? In this episode Derek walks through how interest rates affect mortgage monthly payments. Key things to consider when evaluating which is better pay off early or invest. Also, what percentage of your monthly payment goes to principle and to interest depends on where you are in the loan and current rates.
What should you consider when evaluating whether to try and payoff your mortgage early?
How does inflation make your payment lower over time?
The present value of your mortgage payments equals your loan amount
How paying off your mortgage rather than investing the funds might overweight real estate
Considerations should you need to pull money out for emergencies
Will you do better over time investing periodically or paying down mortgage early?
How to calculate when you will pay more in principle than interest
Key assumptions that you will increase 401k contributions or investments monthly
Understanding how interest rates change the calculus on the decision to payoff mortgage or invest
Does the FIRE movement and Dave Ramsey get this question wrong?
Return on paying off mortgage early vs. potential investing returns
Liquid vs. illiquid investments
Mentioned in this Episode:
4% withdrawal rate and retirement considerations https://podcasts.apple.com/us/podcast/is-the-fire-movement-doable-and-the-4-withdrawal-rate/id1432836154?i=1000461766880
Inflation and purchasing power of the dollar https://podcasts.apple.com/us/podcast/how-purchasing-power-dollar-is-eroding-plus-why-inflation/id1432836154?i=1000433222599
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek www.razorwealth.com
Strong opinions exist on each side of this debate. Some believe plowing money to pay off the mortgage early is better. Others would rather step up their periodic investments and keep a low rate mortgage? In this episode Derek walks through how interest rates affect mortgage monthly payments. Key things to consider when evaluating which is better pay off early or invest. Also, what percentage of your monthly payment goes to principle and to interest depends on where you are in the loan and current rates.
What should you consider when evaluating whether to try and payoff your mortgage early?
How does inflation make your payment lower over time?
The present value of your mortgage payments equals your loan amount
How paying off your mortgage rather than investing the funds might overweight real estate
Considerations should you need to pull money out for emergencies
Will you do better over time investing periodically or paying down mortgage early?
How to calculate when you will pay more in principle than interest
Key assumptions that you will increase 401k contributions or investments monthly
Understanding how interest rates change the calculus on the decision to payoff mortgage or invest
Does the FIRE movement and Dave Ramsey get this question wrong?
Return on paying off mortgage early vs. potential investing returns
Liquid vs. illiquid investments
Mentioned in this Episode:
4% withdrawal rate and retirement considerations https://podcasts.apple.com/us/podcast/is-the-fire-movement-doable-and-the-4-withdrawal-rate/id1432836154?i=1000461766880
Inflation and purchasing power of the dollar https://podcasts.apple.com/us/podcast/how-purchasing-power-dollar-is-eroding-plus-why-inflation/id1432836154?i=1000433222599
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek www.razorwealth.com
34 min