Why I Stopped Investing to Pay off my Mortgage

Should you pay off your mortgage early or focus on investing? It’s an age-old debate. In this video, I dive into real numbers, historical data, and potential risks to uncover the truth. Using a 30-year timeline starting in 1994, I compare two scenarios: paying off your mortgage early vs. investing $350 monthly into the S&P 500. The results may surprise you!

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🌟 Key Insights:
💰 The Mortgage-Free Strategy:
By paying $350 extra monthly, the mortgage is paid off by 2009, saving $83,526 in interest. But does this strategy stack up against long-term investments?

📈 The Investing Approach:
Investing $350 monthly into the S&P 500 from 1994 to 2023 results in a portfolio of $324,111. But what happens during market downturns like the Great Recession?

🧠 The Risk Factor:
The investing route comes with risks—market crashes and job layoffs can leave you financially vulnerable compared to being mortgage-free.

🔍 Hybrid Strategy:
A combination of both approaches, investing and paying extra on the mortgage, may provide a balanced path to financial freedom.

Source for ChooseFI Data: https://choosefi.com/newsletter/fi-we...

Chapters:

0:00 - Introduction: Mortgage vs. Investing Debate
0:08 - Why This Video Focuses on Real Data
0:22 - The Scenario: 1994 Start Year
0:36 - Mortgage Details: 8% Rate Refinanced to 3%
0:57 - Investing Scenario: $350 Monthly in S&P 500
1:15 - Emergency Fund: The Foundation Before Investing or Paying Off Debt
1:47 - Mortgage Strategy: Saving $83,526 in Interest
2:30 - Investing Results: $89,364 by 2009
3:00 - The Great Recession’s Impact on Both Strategies
3:50 - Job Loss Risks and Financial Security
4:27 - 30-Year Comparison: Investing vs. Mortgage-Free
5:12 - Hybrid Strategy: Balancing Both Approaches
5:45 - Retirement and Expenses: How Each Strategy Affects Your Needs
6:09 - Tax Implications of Non-Tax-Advantaged Accounts
6:50 - Conclusion: Which Path Should You Take?
7:10 - Next Steps: Exploring Other Scenarios

#OverpayMortgage #InvestorPayOffMortgage #FinancialFreedom



*Disclaimer: Bob is not a financial advisor. Please contact a professional financial advisor prior to making any decisions. Some of the links and other products that appear on this video are from companies in which Bob Sharpe earns an affiliate commission or referral bonus. Bob Sharpe is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.