Should You Pay Off Your Mortgage Early or Invest? | Financial Advisor Explains

In this video, we go over the best way to go about where to put your excess cash when you have an existing mortgage. What is the optimal decision? Is it really smarter to invest the money instead of paying off the home? What are the other intangible factors? All that will be answered today.

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WHO AM I?
Hello 👋 I’m Humphrey, I used to be a financial advisor, worked in gaming/tech, and started my own eCommerce business. I make practical, rational content on investing, personal finance, the news, and much more with a data-backed approach. My goal is to help you with financial literacy and creating wealth.

PS: I am no longer a current Financial Advisor, any investment commentary are my opinions only. Some of the links in this description are affiliate links that I do receive a commission for & they help support the channel!

⏱️ Timestamps:
0:00 - Start Here
0:55 - How Mortgages Actually Work
4:24 - Stock Market Returns
9:16 - Tips to Pay Off Mortgage Early

[humphrey]

What's your current mortgage rate and are you considering paying off your mortgage early or investing? PS: Be aware of the spam/scam comments in the below comment section. I just purged a bunch, but there will inevitably be more that pop up. If theres ever a comment with a lot of likes but they're referring you to some random person's name and promises of returns...its a scam.

[Patriciabanks]

My husband and I were fortunate enough to be able to pay off our mortgage early. We were both still working, and took the payment amount that we had been using to pay off our mortgage faster and we put it straight into investments. We were able to retire early because of almost 7 years of putting away what would have been our mortgage payment as well as maxing out our 401K/403B plans. Thankfully we were taught by both of our parents the value of living within our means.

[bernadofelix]

Mortgage rates are currently at an all time high since 2000(24 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market

[BrewerVera]

I've kept much of my savings in cash for safety, but I'm unsure if it's right for retirement. Contemplating investing $400K in stocks, as I've heard investors can profit in tough times. Unsure about my next move.

[appleztooranges]

Paid off my house in 2019 at 31 years old. Debt free ever since. Zero stress anymore

[dannyowen-ky]

I want to diversify my portfolio worth around $200k, i'll be buying some Tech stocks, what are some new gen stocks i can add to my portfolio to get reasonable increase and protect my future

[HAARTVON]

I started investing in stocks at 18, grew portfolio to $600k by 33. Recently, lost over 30% and want to mitigate risks. Also, plan to pay off my mortgage and want my portfolio to grow. What should I do for stable cashflow?

[alicegomez]

I’m 35 and I have about $250k liquid in savings which I plan to put towards becoming a homeowner but based on the current high prices on real estate, do you suggest I hold from buying or do stocks for now?

[soveinaaraceli]

For me, the ultimate goal of wealth is freedom. In my mind, 5 million is the magic number that will allow me to worry-free at 65 years old. Is it better for me to save money or allocate a significant amount of my income to stocks in order to accomplish this goal?

[nicodimus]

The feeling of having no monthly rent or mortgage payment is AMAZING. It changes your entire outlook. That should be what retired life feels like.

[KateShawn-jvwh]

I had initially planned to retire at 62, work part-time, and save money, but the impact of high prices on various goods and services has significantly disrupted my retirement plan. I'm worried about whether those who experienced the 2008 financial crisis had it easier than I currently am. The volatility of the stock market is a concern as my income has decreased, and I fear that I won't be able to contribute as much as before, potentially jeopardizing my retirement savings.

[LoveFrank-cptv]

My husband and I were fortunate enough to be able to pay off our mortgage early. We were both still working, and took the payment amount that we had been using to pay off our mortgage faster and we put it straight into investments. We were able to retire early because of almost 7 years of putting away what would have been our mortgage payment as well as maxing out our 401K/403B plans. Thankfully we were taught by both of our parents the value of living within our means. Thank you for your advice. I know it will help people. we are interested in investments that could set me up for retirement, I mean I've heard of people that netted hundreds of thousands during these crash, I listened to someone on a podcast who earned over $650K in less than a year, what's the strategy behind such returns?

[somehandle]

I’m paying extra on my 2.99% mortgage to achieve my goal of no mortgage by the time my kid graduates high school. It’s fun to track progress on the amortization schedule.

[EmanuelAmbriz-mlnk]

Wow. I am blown away by this presentation. I was an insecure 49 year old on SS in January 2018 when I started buying Bitcoin/crypto. Everyone though I was irrational. Most still do. I put my income in every month and watched the value drop each month but for some reason really believed in Bitcoin and alt coins/blockchain even though I don't totally understand. Finally, the crypto market started turning around and I am astonished at the value of my crypto currency portfolio today. I engaged in active trading and managed to grow a nest egg of around 2.3B'tc to a decent 27B'tc....At the heart of this evolution is Kerrie Farrell, whose deep understanding of both cryptocurrency and traditional trading has been instrumental. Her holistic approach to investment and commitment to staying abreast of market trends make her an invaluable ally in navigating this new era in cryptocurrency investment....

[NicholasBall]

I paid up all my mortgages in 2yrs while working with a Financial Adviser. I’m 50 and my husband 54 we are both retired with over $3 million in net worth and no debts. We got to realize that the secret to financial freedom is making better investments.

[zacksmith]

Max out 401K match and Roth IRA first. All remaining goes to mortgage principal. That’s my strategy with a 6% rate

[AAABBB-jcjd]

I was looking for someone to make this video and you read my mind. Thank you so much.

[JeffFindlay]

Paid my house off in about 9.5 years dumping everything i could and renting out rooms for half of those years. Bought it FHA with 3% down with a 5.25% and a PMI, then refied to a 15 yr after about 2 years to a conventional at 4.35%. Opened my 1st 401k/stock account the next year and now trying to catch up there. Very glad i did it that way, the peace of mind is priceless and the flexibility to not need any other forms of debt will continue to make my dollars efficient.

[irisflower]

I say do a bit of both. I’ve been maxing out my 401 for several years now while also working towards paying off our house. We paid off our 375K loan in 12 years with a 3% rate. Now I’m dumping a bunch of cash into a brokerage account, beefed up kids’ college investment fund, and also maxing out HSA (8, 200 in 2024) and investing that too (I’ve been doing that for years too). I’m 42 and hubby is 45 so we still have plenty of years until retirement, although we’re shooting to retire within the next 15 years or so. We don’t own expensive cars, toys, second homes, or designer bags. We do travel though, that’s about the only thing I’ll go all out for. But we keep it to pretty much one big family trip per year.

[jamesbrumfield]

Paid off my mortgage in 6.5 years(interest rate was 5% in 2016, refinanced to 2.7%, and paid off in 2022) while maxing out my 401k for the last 15 years. So, my "investing" came in that form with the employer-matching contribution. Started my brokerage account last year and been daily cost averaging and plan to keep at it until I retire. Paying the bank more interest than I need to is something that doesn't sit right with me. Could I have made more gains investing outside of my 401k during that 6.5 year period? Maybe. For me, I didn't have the tolerance, discipline, or knowledge to be an effective investor at that time. Not being indebted to ANYONE is peace of mind and something I hold in high regard. Love your page @humphrey.