Key insights
- An individual is debating between paying off a mortgage and continuing to invest in dividend-paying stocks. The portfolio's growth and dividend income are projected to cover the mortgage payments in the future, while paying off the mortgage would provide immediate debt freedom. The decision highlights the risk-reward trade-off between guaranteed debt reduction and potential investment gains, with a slight positive influence on the market due to continued investment.
I have this "great problem". I managed to save around 160k towards my 290k mortgage last year. I have a 2.8 interest rate. Then I decided to invest the 160k instead. So I bought around 90k in s&p, qqq, some mag7 individual stocks and also bought around 30k SCHD, 20k QQQI, 10K SPYI, 10K JEPI. The portafolio has grown to 230k by now and is paying me around $750 in monthly dividends. My monthly mortgage payment is 2k. I will continue to contribute to this portafolio $750 monthly (not sure what holdings) plus all dividends will be DRIP. According to dividend tracker app my investment should generate 24k yearly dividends in 8 years if I DRIP everything. I want to retire in 8 years which fits perfectly to reach retirement with a way to cover my mortgage plus the portafolio will grow to around 490k. My wife would like to payoff the mortgage ASAP but I have a different way of thinking. She says use the entire portafolio towards the mortgage as well as our savings and we can be "debt free tomorrow" then we can save more and build up another portafolio but we'll be debt free. I love the idea of being debt free but the investing numbers don't let me do it. I lean more towards building up a machine that generated enough monthly income to pay off the monthly mortgage plus I keep the portafolio and adds liquidity. By the way, we are not fighting and understand each others point, but each of us lean more towards opposing directions. What would you do?