Debt vs investments

Depends on interest rates and how successful you are investing.

I wouldn't advise paying the house off early

Thank y’all. I’m really trying to get a grip on my finances.

Yes, our company puts in 4% for our 5%. I put in 6% and get the full match at 4%.

yep, comes down to interest rate. House should most likely not be a concern

If you are already maxing out your 401k to your employer match, which it sounds like you are...

Pay down the cars.

Start with paying down the one that has the most time left on the loan.

The way amortization works, the longer you are in the loan, the less your payment goes to interest.

If you have one vehicle that has 2 years left, and another vehicle that has 4 years left, start making extra payments on the one that has 4 years left.

It sounds counterintuitive, and Dave Ramsey wouldn't agree, but the math works out better for you that way.

The only exception is if you have a cash flow problem and you are struggling to make ends meet, in which case you pay off whatever is the easiest (lowest balance) as soon as possible.

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And a mutual fund through Edward Jones.

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CAIBX?

Shoot, AGTHX was my second guess.

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I dont get this line of thinking but to each his own.

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Main Reason
1. The rate you pay on your home is likely smaller than what you can earn on other investments (stocks, investment properties, etc.).

Another Good Reason
2. You can write off mortgage interest on your taxes.

Lagniappe
3. You're less attractive to attorneys looking to sue bc you have a lien on your home and don't own it free and clear.

All of this holds true for personal residences....but with investment properties, you can claim depreciation in addition to items 1-3 above.

I like leverage and using it to my advantage.

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Main Reason
1. The rate you pay on your home is likely smaller than what you can earn on other investments (stocks, investment properties, etc.).

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This is the only semi-rational point you make. This strategy ignores risk. Returns on your other investments are not guaranteed, and can even lose money.

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Another Good Reason
2. You can write off mortgage interest on your taxes.

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Get real. You're paying a dollar to get a quarter. Plus the new tax structure means very few people will itemize anyways.

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Lagniappe
3. You're less attractive to attorneys looking to sue bc you have a lien on your home and don't own it free and clear.

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States have their own laws around this, but in many states your equity is absolutely at risk. The courts can force a sale, and once your mortgage obligations are satisfied the remaining proceeds are used to fulfill the judgment. In any case, you can get an umbrella policy for less than the cost of carrying a mortgage balance.

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If you've already paid off your high interest credit cards, and your vehicles, you've already maxed out your Roth and Traditional IRA's, you've got a 12 month emergency fund set up, and your kid's college funds are fully funded, and you've got a nice fat vacation fund, and your HSA is fully funded, and you still have money left over, then by all means, pay off your house early.

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but you can invest that leftover money and get a higher return than the interest rate on your mortgage!

honestly the two sides of the argument boil down to risk tolerance. To some people the additional return on investment isn't worth the risk of owing somebody money on your house. I just hate when people denounce it as stupid when it is more a matter of personal preference.