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Reply to "If you were to inherit $2 million, would you pay off the remaining $150k of your very low interest mortgage?"
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[quote=Anonymous][quote=Anonymous]Can someone ELI5 why it would be bad to pay off your mortgage, in this scenario at least? We are self-employed with irregular income and not having a mortgage sounds like a dream. And maybe also teach me how to turn money into more money, because we are looking at a similar windfall at some point in the future…[/quote] We used to be self employed (contractors) and always have at least a year's worth of expenses, including the mortgage payment. I also lived through two recessions, and the mortgage meltdown. So I've learned to be very conservative with my savings. If your income is irregular, you want to have a huge cushion to pay your monthly bills. If you use that $150K to pay off your low interest mortgage, and you lose your contract, you might not have a mortgage to worry about, but you also have $150K less to pay your other expenses. I would put that cushion into a safe, low risk investment account like a money market.[/quote]
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