Keep Investing Or Pay Off Mortgage?
Richard needs to listen to his wife on this one and pay off their mortgage before continuing to invest in real estate.
QUESTION: Richard and his wife bring home $130,000 a year, which comes from rental properties. They have a mortgage of $250,000 on a home worth $460,000. Richard wants to continue investing in real estate, but his wife wants to pay off the mortgage. What should they do?
ANSWER: Listen to your wife. Pay the house off. She has a risk meter that’s better than yours. You’re doing everything with math; she’s calculating risk and intuition in the equation. If the paid-for house is going to make your wife feel more secure and stable, then you need to pay it off. It will give you more emotional and relational stability, which will make you a better investor in the long run.