Message Font: Serif | Sans-Serif
No. of Recommendations: 6
I think with your income, I'd continue to keep contributing to the retirement accounts, though I might be inclined to use additional cash flow to paydown the mortgage a little more aggressively. I think an extra $1000 a month could probably turn a 30-year mortgage into a 10-year mortgage or something like that. And in reality, I wouldn't rely on a HELOC for an emergency fund. Yes, to an extent it can be used for that, but you'd be taking on debt at a time when you could least likely afford it. Cash is king for an emergency fund. So I might be inclined to scale back the extra principal payment to get somewhere between $30-50K into the emergency fund. When that is funded, then I'd go back to the extra principal payments...maybe (see below).

Oh, and it's Dave Ramsey, not Tom, I believe you're referring to. And I know how much he hates debt, but I have a hard time advocating that someone push to pay off a 5% loan early. I'd rather plow that into tax-efficient taxable investments, I think, which could be used to pay down/off the mortgage in the future if need be.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.