Should I Invest My Inheritance or Pay Off My House?
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Inheriting money can be both a blessing and a burden. While it may be tempting to splurge on a lavish vacation or indulge in expensive purchases, it is important to consider the long-term benefits of investing your inheritance or paying off your house.
One option to consider is investing your inheritance. Investing can help grow your money over time, providing you with higher returns than simply keeping it in a savings account. The market can be volatile, however, so it is important to do your research and consider the risks before investing.
Another option is to pay off your house. This can provide you with a sense of financial security and peace of mind. However, it is important to consider the interest rates of your mortgage. If the interest rate on your mortgage is lower than the potential returns from investing your inheritance, it may be more beneficial to invest your money instead of paying off your house.
It is also important to consider your personal financial goals. If you have a lot of high-interest debt, such as credit card debt, it may be wise to use your inheritance to pay off those debts before considering investing or paying off your house. Additionally, if you plan on moving or selling your house in the near future, it may not make sense to pay off your mortgage.
Ultimately, the decision to invest your inheritance or pay off your house is a personal one that depends on your individual financial situation and goals. It is important to do your research, consider your options, and consult with a financial advisor before making any major financial decisions.
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Doesnt he have to pay taxes on it?
My mortgage is set to be paid off at the end of 2024 if I make no more additional payments. I could pay it off at the end of 2023 & save myself a whopping $200 in interest for 2024! I paid down the principle early but it makes no sense to continue the remaining 3-5 years. There is very little money saved in interest in the final few years.
I’m not jealous, but it would sure be nice to inherit some money
Pay off the house. The stock market goes down for no reason
So glad i invested my inheritance in my home, i did not squander any of it. I feel good about my decision.
Paying you house off is the most smart, wisest desicions anyone can make.
Reasons are:
-Peace of mind.
-Better cashflows.
-Appreciation with no risk.
From there on anyone can save for retirement, college, almost anything they wish to save for
Regardless of some gurus have said.
If anyone dare to use a calculator and with simple math will understand that the longer you take to pay your own house the more money you would lose at the end.
If you have that choice, the decision is easy–do what makes you feel good! My wife and I could have invested and had more net worth but. apparently like you, we like having our house. It's quite satisfying for those of us who have that joy. But if you want to invest and see how much you can make, go ahead! That can be fun too.
Why not buy a new house and have a renter pay off the mortgage on the old house for you?
Invest the 250,000 because you can get 8- 10 percent return on your money. I bet your home is financed at 2.9 percent. Invest that money. It doubles every 7-10 years. His advice on that is wrong.
Personally I would invest some of it. You inherited $250K and the mortgage is most of that. If you inherited $1 million and the mortgage was $240k, then I'd say pay it off buy you will get a much better return investing it. Treat it like your income so go and spend some of it, invest some of it and pay some off the house.
Also, I'd look at your total net worth and see how much of that is the house. If your worth $1 million with a $400k house I'd say that's 40% of your net worth tied up in a house. I wouldn't want more than 20% – 25% of my net worth tied up in a house when I could be investing it instead with a 3% mortgage.
Walk and chew gum at the same time
I'd pay off the house too, no question. I realize that if I used the money to put into a good ETF that my net worth could grow much bigger investing it instead… but then again I might die in a year so I'd rather have a year of freedom than another $250k to pay off watching my portfolio grow on paper.
If you prioritize getting money, invest it. If you prioritize paying off your house, pay off your house.
Dave has a dead fingernail.
This co host is a real tool…
You can always go back and get the mortgage if you don’t like it.
It’s an easy decision when the market is hitting all time highs daily. It gets more complicated when the market is down 10% and inflation is 7.5%.
This advice is going to cost some 30 year old millions by retirement. Terrible advice.
Invest. Paying off your house early is costing you millions in retirement.
An inheritance of $250k gives this caller a lot of options. Of course, Dave immediately goes to "muh baby steps" and tells the caller to pay off the house. A competent financial advisor would present about six options along with the risk/rewards of each. There's really no right or wrong answer here.
I realized that the secret to wealth is saving for a better investment. I always tell myself you don't need that new car or that vacation yet and that mindset helps me make more money investing. I invested 100k in TSLA, NVDA, SBUX stocks and made 380k with the help of my F,A Rita Wildrin Mora, but guess what? I put it back with her in a 60/40 stock/bond portfolio. It compounded and now I'm rounding up close to a million.
At 2.0% the mortgage is the asset and the house is the liability.
If the interest on the house if less than 5% then invest, especially if we have a market correction or crash
Do a new study Dave with young folk. BTC is the future my friend.
He is preaching to the choir.
Payoff the house.
Then start maxing out the retirement investing.
I didn't catch how old they are. If they're nearing retirement, a paid off house (assuming it's their "forever home") is priceless. Might allow them to retire or semi-retire earlier too, coz that's ultimate peace of mind. However if they're not at that age yet, I'd invest the money. With interest rates so low and as long as their repayments are manageable, I'd rather invest for the long-term. I'd think about fixing the rate too, as interest rates will surely rise in the not-too-distant future.
Data doesn’t lie but people putting data together can mislead the facts!!! It’s always worth looking at who put data together and where did they get it
wow. I don't think my wife will share her inheritance from her parents. lol
People can do what they want, but I hate when Dave gives this advice. It is WAY better mathematically to invest versus paying off the house — especially at historically low interest rates like we're seeing now. Let's say you're the caller: Home values increase roughly 4% a year (being generous). If you put $250K in a house today, after 20 years it would be worth $555K. If you put $250K in the stock market instead after 20 years, at 10% returns, you'd have $1.8 million. Also, when you have money tied up in a house, you can't take out any of that money unless you sell the whole house. Whereas with stocks it's much easier to cash out small amounts as needed. How is it not more financially risky to have to sell the roof over your head if you need money in an emergency as opposed to selling off a few stocks?
With a paid off house, you lose that mortgage payment & then you can focus on putting what you used to put into the house into investing.
John is just too much for me lol I want George!