[Robert]

We’re in our 40’s, no debt except our mortgage $88k at 5%. We invest in 401k’s, Roth’s, brokerage accounts.

We’re leaning the $25k towards the mortgage principal to push to have zero debt and get this liability paid off.

Thoughts..

[Ross]

Pay down that 5% loan as slowly as possible and put the $25k to work (assuming you already have an emergency fund).

[Philip]

5% mortgages right on the line, Can’t go wrong either way. I’d split it half-and-half

[Mike]

That’s fine. Or keep maxing 401k, Roths, HSA, etc.
I would do principle over Brokerage.

[Kurt]

Think of it this way. If you want a 5% tax free return on the 25K for the life of your mortgage go for it.

Don’t miss: Should I put 15% down on mortgage loan or 20% to avoid PMI?

[Sean]

Mathematically it’s best to invest it. If you’re already max all tax advantaged accounts, then put it in a taxable brokerage.

[Jatzel]

Great job for being debt free, that’s awesome!

Regarding your question there are 3 main accounts needed to reach financial independence.

1: Emergency fund (50%)

Which is 3-12 months worth of living expenses

2: Short term savings (25%)

This is savings for anything you plan to buy or spend on within the next 3-5 years.

3: Wealth building (25%)

Which is 401ks, IRAs, and other investment accounts.

I’d take the $25k and allocate it to these 3 accounts according to the percentage.

If you’re not planning on spending or buying anything in the next 3-5 years, you could take that 25% and put it towards the house.

That would be my recommendation.

Take care!

[Author]

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