Reply to What to do with an extra $750K?

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Reply to "What to do with an extra $750K?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]"This is the the worst advice ever. The OP is coming into a windfall, and you guys are giving her advice that keeps her in debt or worse, puts her in MORE debt"

I'm the pp who wrote this and would like to add - instead of these options, 
1) pay off your student loans, all of them
2) pay off your mortgage

You are now debt free in DC with a comfortable HH income.  Congratulations!  Now, take the money you were putting towards your student loans and mortgage and start aggressively saving for your addition, your new car, and your children's tuition.  [/quote]

I'm 9:36. I think your advice might be good for someone in their 50s or someone nearing retirement, but for someone in their mid-30s with 4 small children at home, having liquid investments and cash is more important than a paid off mortgage. Plus, OP said her mortgage rate is 3.5%. With the interest deduction, the rate is effectively 2.5%. That is a really, really low interest rate. Over time, inflation will eat away at the payments and it will be miniscule compared to their income. There's a time for paying off every single debt, but that's generally not good advice for people in their 30s (like me). Better to sock away the money for the future and slow pay the low interest debts. The only exception to this would be if they're in a situation where there's a lot of job insecurity, but that doesn't sound like their situation.[/quote]

+1, though on DCUM it's heresy to not pay off your mortgage. Which is sad for a lot of people.

[/quote]

1. Paying cheap dept is an emotional decision (peace of mind)
2. Not paying cheap dept is a financial decision (leverage to build wealth)

There is no wrong answer here but you can not have both. OP chooses 1 or 2 based on what is more important to her and her family. What I do not understand is why some DCUMer feel so strongly about other people's choices.

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