Should I use my extra money each month to invest or pay towards the balance of my mortgage?

I have about $1,000 extra each month that I want to either invest or pay towards the principal of my mortgage ($81,000 with a 5.75 percent interest rate). What would be the best use of my money?

Debt, Investing, Real Estate
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3 weeks ago

I'm of the opinion that even a 5.75% mortgage rate is low cost money.  Over a 100 year period and even during the past 30 years stocks have averaged a 10% annual return and bonds 6%.  So if you were to invest 50% in equity funds and 50% in bond funds you would most likely make 8% over the long term and that is an significant improvement over 5.75%.  Also an investment portfolio will be less risky than home equity and much more liquid.  As your investments grow you could always withdraw to pay off the house if that makes you feel more secure.

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