Investing or Paying Off Your Mortgage – What Should You Do?
When it comes to building wealth and securing your financial future, one big question often pops up:
Should you invest your extra money or pay off your mortgage early?
The answer? It depends on your personal situation. Let’s break it down.
Step 1: Pay Off All Other Debt First
Before even thinking about investing or attacking your mortgage, there’s one golden rule:
🔑 Clear all outstanding credit cards, car loans, student loans. Anything with high interest.
These debts usually have higher interest rates than a mortgage and will keep you stuck in a cycle if ignored.
Step 2: Build a Solid Savings Habit
Start saving 25–35% of your total income.
This isn’t always easy, but if you live below your means and automate saving, you’ll be shocked how fast it adds up. This cash buffer gives you flexibility, safety, and options.
Now You Have a Choice:
1. Pay Off the Mortgage Early
This is for those who value security and peace of mind. Being debt-free means no matter what happens—job loss, illness, market crash—you’ve got a roof over your head. No bank owns it.
It’s a more conservative route, and one Dave Ramsey fans will know well. His “Baby Steps” help the average family climb out of debt and into financial peace, one focused step at a time.
2. Invest for Growth
If you have a solid income, minimal debt, and are comfortable with calculated risk, then investing could bring higher returns.
You might choose:
🏠 Property
📈 Stocks & Shares
📊 Business ventures
₿ Crypto (for the more risk-tolerant)
The upside? Potentially greater wealth.
The downside? Risk, volatility, and responsibility.
3. Split It 50/50
Can’t decide? Do both.
Put 50% of your surplus cash into investments, and 50% toward paying down your mortgage. This balances your need for growth with the security of reducing debt.
What Worked for Me
Years ago, I chose the investing path. With little personal debt, I focused on expanding my property portfolio and accumulating Bitcoin when others weren’t paying attention. If I had only focused on paying off the mortgage, I wouldn’t be where I am today. It wasn’t without risk—but the calculated leap changed my life.
Ask Yourself:
- What’s my annual income and is it stable?
- Do I have any dependents or major family responsibilities?
- Am I living below my means?
- Am I willing to take on risk for potentially bigger rewards?
Bottom Line
🔁 Clear all non-mortgage debt first.
📉 Save aggressively.
🏁 Then choose: security or growth.
Whatever you do, make sure your decision aligns with your long-term goals, lifestyle, and risk tolerance.