Tuesday, April 12, 2016
Okay, all you financial whizzes, let me run something by you
Disclaimer: Money talk ahead.
When my mom died a few years back, I inherited a bit of money. Let's just say it's more than fifteen thousand, and less than twenty thousand. Okay?
I promptly invested that money in an investment fund, a mix of stocks, bonds, and overseas investments with a "moderate", middle-of-the-road strategy - nothing too risky.
The damn thing's been losing money ever since. Nothing much, but it's two years on, and instead of making money, I'm down by a few hundred bucks. The fees are eating up any gains that I make.
So what I'm thinking is, instead of letting that money sit there and stagnant, hoping that at some point the fund will turn the corner and start earning me some interest, I should take that money and pay down my mortgage.
My mortgage interest rate is currently 5.75%. I've been paying extra on the principal every month for the past couple of years, and if I continue at that pace, I'll have the thing paid off in eight years or so. If I take the money out of the fund and put it against the mortgage, I'll have the mortgage paid off much, much quicker. (If I put the fund money against the mortgage, it'll bring the remaining mortgage down to 14K.)
But!, you say. Your job situation is not stable! Yes, that is true. HOWEVER, I do have other savings, which will carry me through if necessary for several months until I get find another position, and in the meantime, I feel like I would sleep easier at night knowing that my mortgage was practically all paid off, PLUS the fund money, instead of making me zip-zero-nada, would instantly generate a return of 5.75%, or the interest rate on the mortgage.
I ran it by someone IRL who I trust very much, and they said it sounded like a solid plan. Now I would like to know: What do YOU think? Enquiring minds want to know.
(And I've been thinking about this for some time now, so no, it's not the meds talking. I've also been thinking about this since before the whole my-boss-is-a-lunatic thing, so it's not *just* the job situation talking.)
Let me hear it!