Should you pay off your mortgage early or concentrate on investing? It’s an old-time debate. In this video, I dive right into actual numbers, historic information, and potential threats to discover the truth. Making use of a 30-year timeline starting in 1994, I contrast two circumstances: paying off your home loan very early vs. investing $350 month-to-month into the S&P 500. The outcomes may amaze you!
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Trick Insights:.
The Mortgage-Free Strategy:.
By paying $350 additional month-to-month, the mortgage is repaid by 2009, saving $83,526 in rate of interest. However does this strategy compare to lasting financial investments?
The Investing Approach:.
Investing $350 regular monthly right into the S&P 500 from 1994 to 2023 results in a portfolio of $324,111. What takes place throughout market downturns like the Great Recession?
The Risk Factor:.
The spending route includes dangers– market crashes and task layoffs can leave you financially susceptible compared to being mortgage-free.
Hybrid Strategy:.
A combination of both strategies, spending and paying added on the mortgage, may give a well balanced course to financial flexibility.
Source for ChooseFI Data: https://choosefi.com/newsletter/fi-weekly-september-13-2022.
Chapters:.
0:00 – Introduction: Mortgage vs. Investing Debate.
0:08 – Why This Video Focuses on Real Data.
0:22 – The Scenario: 1994 Start Year.
0:36 – Mortgage Details: 8% Rate Refinanced to 3%.
0:57 – Investing Scenario: $350 Monthly in S&P 500.
1:15 – Emergency Fund: The Foundation Before Paying or spending Off Debt.
1:47 – Mortgage Strategy: Saving $83,526 in Interest.
2:30 – Investing Results: $89,364 by 2009.
3:00 – The Great Recession’s Impact on Both Strategies.
3:50 – Job Loss Risks and Financial Security.
4:27 – 30-Year Comparison: Investing vs. Mortgage-Free.
5:12 – Hybrid Strategy: Balancing Both Approaches.
5:45 – Retirement and Expenses: How Each Strategy Affects Your Needs.
6:09 – Tax Implications of Non-Tax-Advantaged Accounts.
6:50 – Conclusion: Which Path Should You Take?
7:10 – Next Steps: Exploring Other Scenarios.
#OverpayMortgage #InvestorPayOffMortgage #FinancialFreedom.
* Disclaimer: Bob is not an economic advisor. Please contact a specialist financial expert prior to making any kind of decisions. Several of the links and various other items that show up on this video clip are from firms in which Bob Sharpe gains an affiliate commission or referral reward. Bob Sharpe becomes part of an affiliate network and receives compensation for sending website traffic to partner websites. The web content in this video clip is accurate since the publishing day. A few of the deals discussed might no more be available.