- The Finance Gourmet

Should I Pay Off My Mortgage Instead of Investing

October 3, 2022July 19, 2021 by Finance Gourmet

Figuring out what the best thing to do with your money can be difficult. Many people get caught up in all the possibilities. They wonder if it is wise to pay off your house mortgage. Should they pay off credit cards or put higher down payment on a new home? Should I pay off my car loan with a home equity loan? Is it better to pay off your house or keep the money? And, most of all, should I pay my house off at retirement? We have discussed if it is smart to pay off your home early before. Unless paying off your home still leaves you with a sizable amount of cashable assets, the answer usually is not what you think. For people without substantial assets remaining after paying off the mortgage, owning your house free and clear does nothing but trap a lot of money where you can’t get it, inside your house. Financial professionals call the equity in your home that you are not going to sell “dead equity.” Here is what to do with your assets before you pay off your mortgage, and, a quick look at understanding the pros and cons of a reverse …

Use Accounts to Save and Budget

September 25, 2015 by Finance Gourmet

I talk a lot about the psychology of money. The reality is that no matter how much something makes sense mathematically, it just may not work for most people because money isn’t just something we move around on a spreadsheet. One of the most common questions I see are in the form of “What should I do with $5,000,” or “How should I invest $3,000?” The answer is to put it in your savings unless you currently have enough money saved for your emergency fund and short-term goals, otherwise, put it in one of your investment accounts. People don’t like this answer. Why? Money psychology. Use More Accounts to Save One of the problems with money on a personal financial level is that it comes and goes so easily, often without really noticing or appreciating it. Consider a man (or woman) age 35. He earns $120,000 per year, has a mortgage, a car payment, some nice hobbies and he puts money away for his kid’s college and his own retirement. Honestly, that’s pretty great and he should be (and is) pretty happy. Financially speaking, this means that each month he earns $10,000. His company takes out $5,000 for taxes, insurance premiums, …