Paying Off With Investments

Dave helps George see the logic in going ahead and paying off his house with the money he has in stocks and mutual funds.

QUESTION: George wants to know if he should use his non-retiring savings and investments to pay off his mortgage before he leaves with the Army reserves. His mortgage is $180,000 and he has $300,000 in stocks and mutual funds.

ANSWER: If you had a paid-for house and you had $120,000 in stocks and mutual funds, would you go borrow $180,000 on your house and invest that money in stocks and mutual funds? Probably not. It’s the same situation in reverse. By saying that, it makes you think with your head as well as your heart. You have to use both in personal finance. You measure math with your head and risk with your heart.