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And that is where I would appreciate any thoughts, opinions, suggestions. Are we better off putting everything toward paying off house, then work on building up the short term retirement funds? Or some ratio of both. -- Kevin

It seems that most of financial advice is to pay off your debts, then invest.

My personal, non-investment-professional view of the subject is that my mortgage costs me 4% per year (and is deductible). Using your target of earning 8% on investments, are you better off investing at 8% or in essence getting a return of 4% by paying the mortgage faster?

I'm retired and we lived for a little while without a house (rented a condo from our daughter). Last summer, we bought a house and got a mortgage with a balance around $200k even though we could have paid 100% cash. Why? Because it's cheap money and I have a long history of earning more though my investments than that money costs me. So, I usually earn enough from investing that $200k or so every couple months than the annual interest cost. And in an extra month, I earn enough to pay the rest of the mortgage (the principal) for a full year. The rest is gravy. YMMV.

Still, most professionals would never do it this way. But it isn't rocket science.

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