Assuming you already have an Emergency Fund in place and you’ve paid off all other debt (credit cards, student loans, car loans, etc.), you may be ready to consider the question of whether to start hacking away at your mortgage debt or invest that money instead.
Frankly, you can’t go wrong either way. Paying down the mortgage is a guaranteed return(if you pay-off a 4.o% mortgage, you’re effectively earning 4.0%).
Investing is a risk at leveraging. If you choose to invest, you’re essentially saying you believe you can out-earn the mortgage interest you’re paying by investing elsewhere. So if you believe you can “arbitrage” like banks do (borrower at a lower rate than you invest), investing may be the better choice.
If you like the safe bet, you may prefer getting rid of that mortgage.
You may want to see another FAQ on this page when considering investment options - “Should I contribute to a 401k or Roth IRA?”
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