Thanks shipo! I'm glad to hear that you managed to invest some.
Can you explain this return on investment better? I don't know how to crunch the actual numbers to see math. It still somehow makes sense to own a home free and clear and to also be able to use that for rental income later.
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You're more or less in the same boat I was in 2015 when I filed for my Chapter 13; I was in my late 50s, all of my investments had been consumed, I'd lost my house, I had a 14 year old car (which rusted away during my 4th year of my Chapter 13), and had just started a new 401(K) plan with my new employer. In my case, I ramped up my 401(K) withholdings to the IRS maximum, my (now former) company had a whopping 10% match, and in the space of the next six years that fund had grown from zero to over $330,000 when I left the company. Keep in mind, this was partially due to the large annual contributions, but also due to the single fund I put the money into.
Fast forward one year and markets are in huge turmoil and yet I still believe investing is the path forward. This Ukrainian war won't last forever, COVID seems to be on the wane, and my bet is we're going to see a reprise of the Roaring 20s, 100 years later. Said another way, 2022 is probably going to be a huge bust for investors, however, beyond that, I don't see any benefit to paying down your mortgage versus investing. Think about it this way, investing when the markets are down allows you to buy in when prices are depressed; you'll essentially be buying more for less.Leave a comment:
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Paying Down Mortgage v. Investing
So after more than half a life of not saving or investing, I find myself in my 50s, in Chapter 13 and looking towards the future. I have NOTHING set aside for retirement unless you want to consider around 2k worth of stocks that are steadily losing value my home the latter of which is my best chance for investing.
The interest rate on the house is 5%. I missed out on refi opportunities because of litigation with mortgage company and horrible credit. I read that by the time I get out of bk, then the interest rates might be well above 5%.
If I can't get a guaranteed return on any investment of 5%, then isn't it best to try and pay down the mortgage rather invest? If no, why not?
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