I did a mortgage for Sharon 2 years ago. Her interest rate is 3% and has 13 years remaining. She was wondering, should I prepay my mortgage? I will always answer, it depends.
Sharon, in the past two years, what are you getting for a return on your other investments? Knowing her as I do, I know she would know this answer, at the tip of her tongue. She said, between 6% and 9%. How much money would you add to your regular payment? She told me between $500 and $1,000.
It was time for me to ask her a question. Sharon, if you are earning between 6% and 9% on your investment, wouldn’t it make more sense to take that same $500 to $1,000 per month and put it into your investment accounts, so that your return can compound over time?
I have been asked the same question many times, I don’t always give the same answer, as every situation is different.
