Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's correct to check the interest rates

ETF generally return 7% a year so I would invest vs pay the mortgage

If student loans are higher than 7% pay them otherwise invest

This is the dumbest financial statement I have heard in a while, and that includes the woman who stopped her husband's retirement funds to pay for a nanny.

Op here: please tell me more (I am dumb and don’t know what the average ETF return is, although I understand it is the long term trend that matter)

NP. If you pay $10k extra on your mortgage this year, the total amount you owe will drop by roughly $10,400 (i.e., a 4% return). This will keep growing every year until the mortgage is paid off due to compounding. If you put 10k in an ETF and the market grew by 4%, you would have $10,400 at the end of the year. Ignoring tax differences and fees, you would be in the same place. Most people think an ETF will grow faster than 4% over the long term and hence paying off a 4% loan is not a good investment.

Anonymous wrote:

Anonymous wrote:OP - the answer depends on what your objective is.

Is it to grow your net worth and maximize wealth? So you can do what? Have the ability to walk away from your job at any time? Retire early? Leave money to your kids? Or take care of your aging parents?

Or, is your objective to pay down all your debt because that would reduce your anxiety and would feel good emotionally? Or, perhaps the objective is only to pay off your mortgage because that would feel good emotionally. Or because it would free up funds to pay for college. Or retire early?

This PP knows what she/he is taking about!

OP- I am an economist. The answer to your question depends on how risk averse you are and for how long you are willing to spread the risk you may take. If you have long term goals, you may consider investing in S&P, because the average annual historical return is well above your mortgage rate. Also, if there is a good chance that your income will grow significantly in the future, your mortgage may look not a big amount to you in the future as much as it does now. You can always pay it off when you have funds to do so.

Anonymous wrote:OP - the answer depends on what your objective is.

Is it to grow your net worth and maximize wealth? So you can do what? Have the ability to walk away from your job at any time? Retire early? Leave money to your kids? Or take care of your aging parents?

Or, is your objective to pay down all your debt because that would reduce your anxiety and would feel good emotionally? Or, perhaps the objective is only to pay off your mortgage because that would feel good emotionally. Or because it would free up funds to pay for college. Or retire early?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's correct to check the interest rates

ETF generally return 7% a year so I would invest vs pay the mortgage

If student loans are higher than 7% pay them otherwise invest

This is the dumbest financial statement I have heard in a while, and that includes the woman who stopped her husband's retirement funds to pay for a nanny.

Op here: please tell me more (I am dumb and don’t know what the average ETF return is, although I understand it is the long term trend that matter)

dumbest financial statement eh I posted the 7% I'm very curious on your response...

OP you might like this basic overview

https://www.moneyunder30.com/pay-off-student-loans-or-invest

Another poster said this below, but it bears repeating:

There's no such thing as an 'average ETF return' -- there's only the historical return on whichever ETF you choose to invest in, and even that isn't predictive.

The initial response suggests that here is a "general ETF" - which is arrant nonsense.

so you put your money under a mattress lol, you can't be that dense stock market returns 7% on average there you happy

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's correct to check the interest rates

ETF generally return 7% a year so I would invest vs pay the mortgage

If student loans are higher than 7% pay them otherwise invest

This is the dumbest financial statement I have heard in a while, and that includes the woman who stopped her husband's retirement funds to pay for a nanny.

Op here: please tell me more (I am dumb and don’t know what the average ETF return is, although I understand it is the long term trend that matter)

dumbest financial statement eh I posted the 7% I'm very curious on your response...

OP you might like this basic overview

https://www.moneyunder30.com/pay-off-student-loans-or-invest

Another poster said this below, but it bears repeating:

There's no such thing as an 'average ETF return' -- there's only the historical return on whichever ETF you choose to invest in, and even that isn't predictive.

The initial response suggests that here is a "general ETF" - which is arrant nonsense.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's correct to check the interest rates

ETF generally return 7% a year so I would invest vs pay the mortgage

If student loans are higher than 7% pay them otherwise invest

This is the dumbest financial statement I have heard in a while, and that includes the woman who stopped her husband's retirement funds to pay for a nanny.

Op here: please tell me more (I am dumb and don’t know what the average ETF return is, although I understand it is the long term trend that matter)

dumbest financial statement eh I posted the 7% I'm very curious on your response...

OP you might like this basic overview

https://www.moneyunder30.com/pay-off-student-loans-or-invest

There's no such thing as an 'average ETF return' -- there's only the historical return on whichever ETF you choose to invest in, and even that isn't predictive.

Anonymous wrote:

Anonymous wrote:The basics:

1) Investors (that's you) want high returns and low risk. Not surprisingly, you can't get both. To get people to make higher-risk investments, average returns have to be higher. So money market returns are pretty low, bonds are bit higher (and little riskier), and stock returns are significantly higher and much riskier.

2) The rate you can borrow at is generally higher than you can invest at; that's how banks make money.
2a) Mortgage rates are generally lower than student loan rates because they are guaranteed by your house.

3) Paying down a loan is the same as investment money at the rate of the loan.

4) Therefore, paying down your student loans is likely the best deal.

man yall are dumb most student loans are below 7% correct

Private or Parent plus student loans - no; federally backed students loans or consolidated student loans - probably. My DHs student loans are at 1.7%. We only pay the minimum for obvious reasons.

Anonymous wrote:The basics:

1) Investors (that's you) want high returns and low risk. Not surprisingly, you can't get both. To get people to make higher-risk investments, average returns have to be higher. So money market returns are pretty low, bonds are bit higher (and little riskier), and stock returns are significantly higher and much riskier.

2) The rate you can borrow at is generally higher than you can invest at; that's how banks make money.
2a) Mortgage rates are generally lower than student loan rates because they are guaranteed by your house.

3) Paying down a loan is the same as investment money at the rate of the loan.

4) Therefore, paying down your student loans is likely the best deal.