{ "media_type": "text", "post_content": "I would normally set aside $1k of take home income per month and invest in large index fund. But given the volatility of the market these days and the chance of a big second wave, should I just use that $1k towards my mortgage? I have about $100k on my mortgage and interest rate is around 3.5%. I already have sufficient money in my emergency fund.", "post_id": "5ee6255ad03baa001a27eaea", "reply_count": 4, "vote_count": 1, "bowl_id": "5b3f7377ab53db00136f7b4c", "bowl_name": "FIRE Financial Independence Retire Early", "feed_type": "bowl" }
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I would normally set aside $1k of take home income per month and invest in large index fund. But given the volatility of the market these days and the chance of a big second wave, should I just use that $1k towards my mortgage? I have about $100k on my mortgage and interest rate is around 3.5%. I already have sufficient money in my emergency fund.

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Don't try to time the market, just dollar cost average. I would say still put $500 per month to index fund and $500 towards the mortgage

likesmart

Second E1. Also try to refinance. 15-yr FRM around 2.5%

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There's a bit of personal psychology twist to this. Over time, you'll get a better return investing vs paying down a mortgage at a historically low rate. Some people feel a huge personal relief from having now mortgage.... I'm not one of them because, due to taxes and insurance, I'm never just feel like I'm truly free and clear.

My personal approach is paying nothing extra on the mortgage and instead invest the excess. (The savjng/investing is obviously key vs just spending it away). Once I'm ready to retire from full time work, I will probably pay it off in a lump sum as the seriously decreases my monthly cash requirements and prevents a sequence of return risk of a market crash right when I need to start withdrawing. (It effectively locks returns a small portion of my portfolio at a paltry 3.25% mortgage rate.) I'm still a few years away, depending on market returns, to getting to prove this out, though!

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I think it depends on when do you need this money. If you are going to need it in 3-5 years, it’s risky right now to get in. But if you plan to grow it over 10-15 years, then it doesn’t really matter you start buying now or six months later.

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