Finance_Novice
Registered User
- Messages
- 12
1. Our strategy has always been to repay our mortgage as quickly as possible while maintaining our lifestyle but having watched "How to be good with money" with Eoin McGee and following him on Instagram, we are wondering if that is still the right strategy. He suggests that investing into a fund is a better use of excess cash than overpaying the mortgage.
Also, its available to access if there was an emergency whereas when you pay the mortgage its gone.
Is it not a calculation whereby if we take current mortgage rates at say 2.5% or less. If you put money away for 20 or 30 years, will it not grow at a rate after expenses and taxes of over 2.5%. I would of thought those returns would be very achievable over a long time frame?
Is that not what these guys are suggesting, that this sort of after tax return is attainable?
Where does the 5/6% return come from, how do you come up with that figure when repaying the mortgage?It might.
But repaying a mortgage is the equivalent of getting a GUARANTEED return of circa 5/6% from an investment.
Imagine if there was an investment where you could get that sort of return, GUARANTEED?
Grossed up for taxes, fees & charges...Where does the 5/6% return come from, how do you come up with that figure when repaying the mortgage?
Where does the 5/6% return come from, how do you come up with that figure when repaying the mortgage?
Eoin constantly promotes a 'no-brainer portfolio' of 60/40.
Grossed up for taxes, fees & charges...
Possibility of capital appreciation? (I admit it's unlikely with rates already so low)Why would anyone invest 40% in bonds while carrying mortgage debt,
We like how he simplifies financial jargon
Possibly. You're just gambling on interest rate movements though. Long term bond funds have had a phenomenal return over the last 2 years. But, over a longer term investment timeframe it doesn't make sense; held to maturity the return is known (with a credit risk), and the maturing bonds are replaced with lower yielding ones.Possibility of capital appreciation? (I admit it's unlikely with rates already so low)
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?