Our Financial Path and I had the opportunity to square off in Rockstar Finance’s Money Match-up. The Money Match-up is a series at Rockstar Finance where bloggers debate two different sides of a money related topic.
Our topic discusses paying extra on a mortgage versus investing the excess funds elsewhere. I took the side of paying extra on the mortgage. If you’ve been following my story you know we’ve been aggressively paying down the mortgage for the past 2 years.
Pay Down the Mortgage vs. Investing: Rockstar Finance Money Match-up
The reasons to pay down the mortgage include:
- behavioral aspects,
- guaranteed return on investment,
- decreasing monthly expenses (when the mortgage is paid),
- protection against a recession, and
- not being tempted to spend the extra money instead of investing.
Overall I believe that paying down the mortgage is more beneficial if you are seeking peace of mind and financial freedom. If your goal is to get as rich as possible as fast as possible, then I understand the argument of investing instead. However, this approach also comes with additional risk. Overall, Our Financial Path makes several good arguments to invest instead of pay the mortgage. It’s just not my preference.
Please check out the article and let us know which side you fall on. This tends to be a very personal topic and can ignite a lot of passion. My wife and I have been on both sides of this argument as well. Only recently did we move to the side of paying down the mortgage aggressively.
In the end, if an someone is in position to either make extra payments on the mortgage or invest the excess funds then they are likely doing very well financially. With the majority of Americans barely scraping by or living paycheck to paycheck, those of us fortunate enough to be in this position should be grateful.