Anonymous
Post 08/06/2025 11:49     Subject: A nice problem to have
Op here. Thanks for the (mostly) helpful advice. My concern is that if we have a large fund that doesn’t have withdrawal penalties we’ll just spend it rather than make the compromises we’ve been making for the last 30 years. The only reason that we have so much in retirement savings is that neither of us can stomach the penalties that we would have to pay if we raided it.
Anonymous
Post 08/06/2025 09:55     Subject: A nice problem to have
Anonymous wrote:We (2 working parents, three teens) came into a large-ish wind fall. Not enough money to quit working but enough to pay off the house and do a once in a lifetime vacation for our family of 5. The debate is whether we should we pay off the house (with its 3% interest rate) or put it into the market (we already max out our retirement accounts). My thought is that we should pay off the mortgage as having this money around will just be too much of a temptation. My spouse thinks it’s nuts not to keep this interest rate especially with college right around the corner. Wwyd.


With that mortgage rate, I would put the money in the market and invest in low-cost S&P500 index funds earning around 8-10%/ year over the LONG term. Although this highly-overinflated market is due for a significant pullback based on historical economic numbers, it’s difficult to consistently time the market. Paying off the mortgage with that rate is really a psychological move, if you want peace of mind.
Anonymous
Post 08/06/2025 09:51     Subject: A nice problem to have
Do whatever will help you sleep better (i.e., the psychological benefit mentioned by the previous poster). If you cannot decide, maybe try a little of everything. Unless there are some unmentioned restrictions, no one is forcing you do anything immediately.
Anonymous
Post 08/06/2025 09:38     Subject: A nice problem to have
First, paying off the mortgage is financially the wrong move. BUT, the psychological benefit can exceed the financial, so it may not be the wrong life move. 100% agree that if you do this you then set up an automatic payment into savings and investment equal to your old mortgage payment.

Second, it does have to be pay it off or not. You can split the money and pay half off.
Anonymous
Post 08/06/2025 05:16     Subject: A nice problem to have
Pay the mortgage down by a third to a half, invest the rest. No reason it has to be one or the other.

But, I would dollar cost average given the recent returns and max uncertainty, right now.
Anonymous
Post 08/05/2025 23:51     Subject: A nice problem to have
Anonymous wrote:
Anonymous wrote:This is a no-brainer. You do not pay off the mortgage. That is a very middle class way of thinking.


The rich don't have mortgages my friend. There is plenty of $$. No need to scrimp. You have a poor mans mentality.


The rich certainly do have mortgages. And those that don’t, still use debt. Probably more aggressively than nearly anyone else.
Anonymous
Post 08/05/2025 21:20     Subject: A nice problem to have
Anonymous wrote:Keep your low rate mortgage. You’ll never be able to borrow more cheaply than 3%.

Take your nice vacation. I’d save the rest in either brokerage, MMF or, if you feel you’ll be tempted, put it in a CD or TBill that you can’t easily touch.





Lots of people got 2.5-2.75 during that early 2020 window.
Anonymous
Post 08/05/2025 20:13     Subject: A nice problem to have
Anonymous wrote:
Anonymous wrote:This is a no-brainer. You do not pay off the mortgage. That is a very middle class way of thinking.


The rich don't have mortgages my friend. There is plenty of $$. No need to scrimp. You have a poor mans mentality.


The rich generally do have mortgages - makes sense to have a 3% loan on your house and invest elsewhere. It’s why luxury home prices drop so much as interest rates rise
Anonymous
Post 08/05/2025 16:53     Subject: A nice problem to have
Anonymous wrote:
Anonymous wrote:This is a no-brainer. You do not pay off the mortgage. That is a very middle class way of thinking.


The rich don't have mortgages my friend. There is plenty of $$. No need to scrimp. You have a poor mans mentality.


You, sir, are an idiot.

https://finance.yahoo.com/news/why-billionaires-elon-musk-mark-150100026.html
Anonymous
Post 08/05/2025 16:53     Subject: A nice problem to have
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:You know yourself best. If keeping that much $$ is going to tempt you into spending habits that you don't want, then paying off your mortgage is the smarter choice.

You could pay off your mortgage then set up an automatic monthly transfer of an amount just under your old mortgage payment into to an investment account. And then don't touch that account until you really need it.


Op here. That’s a great option - my plan would be to push the old mortgage payment into the 529s.

So, from one bad decision to another. If this is not a life-changing money for you, make it into life-changing money.
This money is probably enough to build generational wealth and fund retirement tax free for 3 kids. Don't put it into 529 to die.


good point here--if your kids work, have them open Roth IRAs and match whatever they earn with retirement contributions up to the annual max. This will be a small portion of your windfall that can pay off for your kids down the road. Just invest in a target date fund or a broad ETF or something.


Unused money in 529s can now be rolled over into Roth IRAs.
https://www.savingforcollege.com/article/roll-over-529-plan-funds-to-a-roth-ira
Anonymous
Post 08/05/2025 16:51     Subject: A nice problem to have
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:This is a no-brainer. You do not pay off the mortgage. That is a very middle class way of thinking.


The rich don't have mortgages my friend. There is plenty of $$. No need to scrimp. You have a poor mans mentality.


The rich have mortgages from when they were available at 3% or less. And they are in no rush to pay them off.

I have a 3% loan. Why would I give extra money to my bank as a mortgage payment and have them lend it to someone else at 5-6%, when I could instead give it to them in a high-yield checking account or CD and have them pay me 4-5%? The latter is more money and more liquidity for me.


By them you mean us. There is no Them. My mortgage is owned by Freddie Mac which I in turn own as an American tax payer along with you.


And what if my mortgage is owned by a corporation? I feel no loyalty to them or their shareholders. If you would like to make a donation to Freddie Mac to make life easier for American taxpayers, go for it. You can also send money directly to the US Treasury if you want.
Anonymous
Post 08/05/2025 16:48     Subject: A nice problem to have
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:You know yourself best. If keeping that much $$ is going to tempt you into spending habits that you don't want, then paying off your mortgage is the smarter choice.

You could pay off your mortgage then set up an automatic monthly transfer of an amount just under your old mortgage payment into to an investment account. And then don't touch that account until you really need it.


Op here. That’s a great option - my plan would be to push the old mortgage payment into the 529s.

So, from one bad decision to another. If this is not a life-changing money for you, make it into life-changing money.
This money is probably enough to build generational wealth and fund retirement tax free for 3 kids. Don't put it into 529 to die.


good point here--if your kids work, have them open Roth IRAs and match whatever they earn with retirement contributions up to the annual max. This will be a small portion of your windfall that can pay off for your kids down the road. Just invest in a target date fund or a broad ETF or something.
Anonymous
Post 08/05/2025 16:48     Subject: A nice problem to have
Anonymous wrote:
Anonymous wrote:
What is your current mortgage rate?


Learn to read


+1

Good lord
Anonymous
Post 08/05/2025 16:46     Subject: A nice problem to have
Anonymous wrote:
Anonymous wrote:This is a no-brainer. You do not pay off the mortgage. That is a very middle class way of thinking.


The rich don't have mortgages my friend. There is plenty of $$. No need to scrimp. You have a poor mans mentality.


Not true AT ALL
Anonymous
Post 08/05/2025 16:45     Subject: A nice problem to have
We inherited over 2 million a couple of years ago. We did not pay off our mortgage (less than 2.5% interest rate) and the money has done very well invested. We contributed some to our 529s as well.