“Majority of feedback indicates to stay the course as market returns outweigh paying down the mortgage”: Should I keep 400k in investments or pay off my 6.25 mortgage early?

Hey Money Minder,

Should I sell my stocks and pay down my 600k mortgage at 6.25% or keep my money in the market? I’ve got 400k after bouncing back from being 100k in the red last year.

Here are some deets on my mortgage:
– Purchase Price: 1.15m
– Loan Remaining: 600k
– Years Left: 29 Years
– Interest Rate: 6.25%
– Monthly Payment: 5,200 (3.2 interest, 1.1 taxes, 0.9 principal)

Some background:
– Age: 33, no wife or kids
– Job: Corporate Strategy/Finance
– Years at job: 8 years (3 promotions)
– Employer: Top 10 in the industry, Fortune 100 Company
– Total Income: 180,000 – 250,000
– Primary Income: 150,000 – 200,000
– Rental Income: 30,000 – 50,000
– Maxing out 401k and HSA contributions

Feedback says stick with the stocks for now. More gains in the market should beat out paying off the mortgage. But you could consider putting some extra towards the principal to cut down the interest.

Catch you later,
Financially Fabulous

Response from THE MONEY MINDER:

Hello There,

Hello,

I can truly understand the dilemma you are facing with your current financial situation. It’s commendable that you are seeking advice on whether to sell your stock market investments to pay down your mortgage. Given your background information and the details provided, here is a practical approach that you might consider.

Based on the feedback received and considering your stable income and career trajectory, it may be wise to stay invested in the stock market. The potential returns from the market could outweigh the benefits of paying down your mortgage at this time. However, it might be a good idea to evaluate your risk tolerance and financial goals before making a decision.

One alternative approach could be to consider a balanced strategy. You could sell a portion of your stock market investments to make a lump sum payment towards your mortgage. This can help in reducing the interest burden in the long run and also provide a sense of security in owning your home outright. It’s essential to weigh the pros and cons of both options and choose the one that aligns best with your financial objectives.

Remember to also review your investment portfolio periodically and make adjustments as needed. Your stable income and financial discipline put you in a strong position to make informed decisions regarding your investments and mortgage.

I hope this advice gives you some clarity on your options. As always, it’s recommended to consult with a financial advisor for personalized guidance based on your specific circumstances.

Farewell from THE MONEY MINDER.