Use Mutual Fund to Pay Off Car?
Dave suggests what Patrick should do with $70,000 in mutual funds and $76,000 in debt.
QUESTION: Patrick just refinanced to a 15-year fixed mortgage. He has about $70,000 in a mutual fund and has a $6,000 car payment and a $70,000 mortgage. Should he use his mutual fund to pay off these two debts, even if he doesn’t think he’s going to be in this house much longer?
ANSWER: Withdraw the $70,000 and pay off the car today. Then finish paying off the house in about 3 months. Finally, take the amount you were putting toward car and house payments and have that automatically drafted into good growth stock mutual funds. You'll have that account back up to $70,000+ in no time!