What do you do when faced with the possibility of either paying off your mortgage, in part or in full versus using that lump sum to invest? The numbers are very black and white but your decision is more grey and is very individualistic to your feelings and circumstances. Watch Caitriona’s short vlog to learn more
So how do you navigate the grey of such a predicament? The answer really comes down to your individual circumstances and what your top values are. I explain the vlog how I’ve encountered both sides of this and in both instances made totally different decisions.
In 2015, I chose to put all spare cash into equity investments instead of increasing my mortgage payments. I did this because at the time growth was a priority for me and I wanted to capitalise on the returns available in equity investments to expand the available cash that I had. And the strategy worked beautifully as I funnelled all spare cash into my index trackers and it expanded with the magic of compound interest very quickly to a large lump sum.
However just a few short years later I was gifted a large sum of money and in this instance I chose to pay down my mortgage. I made a different choice despite the mortgage rates being significantly higher and equity returns being about the same. The key reason for my decision was because I had just come through a divorce and the security and safety of my home for my kids was my priority so my decision reflected my priorities.
There is a case to be made also when you are unsure to hedge your bets and do a bit of both in proportion to what feels right to you. So of the spare cash that you have in a lump sum or a monthly amount to split it 50/50 or any other way between the two options.
The right thing to do can only be decided by you and you alone. To really feel into what this is, I urge you to create some space in your life to be able to feel/hear/sense what is the best option for you based on your circumstances right now.
If you would like to avail of a complimentary Financial Wellness clarity call, then book yourself in a slot here and we can chat through what’s going on for you right now and how you can best navigate your next step in your financial wellness. Book your spot here https://bit.ly/financial-wellness-clarity-call-
To Your Financial Wellness,
Caitriona
