Why paying off mortgage instead of investing in the stock market?
I’m confused. If a fixed mortgage is 7%, wouldn’t it be better to invest in the stock market for an average of 10% in the long run. In this case, I could have a tax deductable while gaining in the stock market. So, should I pay off the mortgage asap or invest in the stock market? ptstrobl 5:46 am on September 30, 2009 You’re absolutely correct. Also, keep in mind that the interest you pay is being reduced over time, so it’s less and less through the years. If you throw inflation into the mix, with a fixed mortgage, you are effectively paying 3-4% less every year. Your extra cash is much better off being invested–first a cash reserve (3-6 months expenses in case you are temporarily disabled or lose your job), and then hit your accounts with tax benefits like Roth IRA and your company’s retirement plan. Of course, none of the investments do anything for a sound financial plan if you aren’t properly insured. Harsh T 5:46 am on September 30, 2009 You should try to balance. Payoff mortgage
