U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old Yesterday, 02:57 PM
 
214 posts, read 134,849 times
Reputation: 359

Advertisements

I'm about 4 years into my mortgage. Am I better off to make some extra payments on my mortgage or invest in some stock?
Reply With Quote Quick reply to this message

 
Old Yesterday, 03:05 PM
 
65,827 posts, read 67,139,137 times
Reputation: 44094
i would always invest it elsewhere , no question . trapping the extra money in the house rarely makes financial sense , just perhaps feeling good sense . . over time markets prevail nicely.

think about it , the less time you let money sit invested the more your time frame dependent you become . time is your friend .

on the other hand your mortgage ain't changing over time nor is effected by time .
Reply With Quote Quick reply to this message
 
Old Yesterday, 03:06 PM
 
206 posts, read 97,232 times
Reputation: 562
It's always good to pay down debt. Can you do both?
Reply With Quote Quick reply to this message
 
Old Yesterday, 03:09 PM
 
65,827 posts, read 67,139,137 times
Reputation: 44094
debt that can't change with time growing shorter really has no rush to pay it off . the more you wait to channel money in to investments the shorter the time frame for markets to act on it and the greater the need for your time frame to be better then it may be .

the longer you let markets work on it the greater the odds that you can just about set your watch to the fact you will be up nicely . delay that money and you decrease those chances as time gets shorter .

just following the mortgage schedule as is they would be doing both .
Reply With Quote Quick reply to this message
 
Old Yesterday, 03:26 PM
 
2,256 posts, read 1,209,554 times
Reputation: 4607
Unless the debt bears interest higher than the historic s&p average you should invest.

If you haven't started, you should invest regardless. Many have a tendency to delay endlessly because new car, kids, new furniture, new phone, new debt etc

It really never ends and the only thing to do is start investing and let that take hold. Then it becomes a savings game and the mere act of just starting pushes you to cut back and push to save more.

The most important step is the first.
Reply With Quote Quick reply to this message
 
Old Yesterday, 03:28 PM
 
65,827 posts, read 67,139,137 times
Reputation: 44094
not even close today unless their mortgage is are over 9%. even today mortgages are back under 5%
Reply With Quote Quick reply to this message
 
Old Yesterday, 03:29 PM
 
7,697 posts, read 3,869,826 times
Reputation: 10693
That's an impossible question. You can calculate precisely the effect of applying extra payments to the principal on your mortgage but you have no idea what will happen in the stock market. You could double your money or lose it all. Given current bearish market conditions, closer to the latter unless you invest like a genius.


All we can say is that your best "guaranteed" option is to pre-pay the mortgage. That will shorten your loan term and save you lots of interest cost.
Reply With Quote Quick reply to this message
 
Old Yesterday, 03:30 PM
 
65,827 posts, read 67,139,137 times
Reputation: 44094
odds are well in your favor that if you have at least a decade you won't get hurt . we don't have many time frames in history that took more than just a few years to recover . especially if diversified in to fixed income and assorted market segments .

in fact to date 50/50 has never ever lost money over any 10 or 20 year period . did i say never!

these are the worst periods .


https://photos.smugmug.com/photos/i-...-WpkXRpT-S.png

https://photos.smugmug.com/photos/i-...-FbsN3LW-S.png

Last edited by toosie; Yesterday at 04:44 PM.. Reason: Copyright
Reply With Quote Quick reply to this message
 
Old Yesterday, 04:11 PM
 
Location: USA
16,896 posts, read 16,519,500 times
Reputation: 12849
Quote:
Originally Posted by inquisitive2 View Post
I'm about 4 years into my mortgage. Am I better off to make some extra payments on my mortgage or invest in some stock?

Depends on your interest rate...

Determine, if your average return from your investments will be greater than your interest rate, then go with investment contributions.
Reply With Quote Quick reply to this message
 
Old Yesterday, 04:39 PM
 
2,451 posts, read 2,161,417 times
Reputation: 2699
Over the long term, it is pretty easy to invest at a rate higher than what mortgage rates were 4 years ago... so I'd go with the stock market.

But that's the long term. If your investment drops 20% next year, knowing you made the decision that is usually right probably won't make you feel any better.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top