Friends That Invest Invest in Shares or Pay off Mortgage?
Jan 19, 2026
Discover the age-old debate of investing versus paying down your mortgage! Sim breaks down how each choice affects your cash flow using real numbers. She shares a compelling case study about a couple managing a $500K mortgage and a $100K windfall. With insights on interest savings versus investment returns, Sim presents a three-question framework to guide your decision. Ultimately, she emphasizes that there’s no one-size-fits-all answer, and sometimes splitting your funds can be the best approach to maximize your financial growth.
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Mortgages Eat A Big Slice Of Income
- Average mortgage balances vary widely by country and skew the picture of affordability.
- In many places mortgage payments now consume ~26–40% of household pre/post-tax income, showing real pressure.
Jazz And Bobby’s $100K Windfall Example
- Sim uses a couple, Jazz and Bobby, with a $500,000 loan and a $100,000 windfall to show choices.
- She models paying $100K down at 5% and shows monthly cash flow and faster payoff benefits.
Treat Mortgage Paydown As A Guaranteed Return
- Do consider paying down mortgage principal to get a guaranteed, risk-free return equal to your interest rate.
- Do note this also frees monthly cash flow, builds equity faster, and protects against future rate hikes.