My savings are invested in the stock market, and the returns I get from that are higher than the interest on my mortgage. If I liquidated my investments to pay off the house, the savings from not paying mortgage interest would still be less than what I’d make from the market over the same period. I’d rather use the profits from my investments to cover the mortgage interest - that way I still have money left over. If I did the opposite, I’d lose that extra money.
No, even regular savings accounts have ~4% interest, so it makes sense for anyone who got a mortgage more than 2-3 years ago when the rates went up. Any extra money shouldn’t be going to pay down old debt faster, it should be in savings or other high yield accounts.
The value of my portfolio dips too, but I don’t actually lose anything unless I sell. I just hold and wait for prices to recover - as they always have so far. In fact, when the market drops I buy even more, because the same money gets me more shares. People don’t lose their savings because of a crash; they lose them because they panic and sell for less than they paid.
We’re talking about an average over 30 years. The market will dip multiple times through that period, but it will likely average ~10% per year gains as it has for more than a century.
I meant more like something akin to the great depression, but I get the point, if you have a buffer to wait out bad times you can enjoy some extra money for less price
My savings are invested in the stock market, and the returns I get from that are higher than the interest on my mortgage. If I liquidated my investments to pay off the house, the savings from not paying mortgage interest would still be less than what I’d make from the market over the same period. I’d rather use the profits from my investments to cover the mortgage interest - that way I still have money left over. If I did the opposite, I’d lose that extra money.
Your personal financial situation is not really representative of the financial situation of Americans in general though.
No, even regular savings accounts have ~4% interest, so it makes sense for anyone who got a mortgage more than 2-3 years ago when the rates went up. Any extra money shouldn’t be going to pay down old debt faster, it should be in savings or other high yield accounts.
What would happen if stock market dives?
The value of my portfolio dips too, but I don’t actually lose anything unless I sell. I just hold and wait for prices to recover - as they always have so far. In fact, when the market drops I buy even more, because the same money gets me more shares. People don’t lose their savings because of a crash; they lose them because they panic and sell for less than they paid.
We’re talking about an average over 30 years. The market will dip multiple times through that period, but it will likely average ~10% per year gains as it has for more than a century.
I meant more like something akin to the great depression, but I get the point, if you have a buffer to wait out bad times you can enjoy some extra money for less price