<#-- Rebranding: Header Logo--> <#-- Rebranding: Footer Logo-->

What should we prioritize financially with a surplus of money?

My wife and I continue to plan for our financial future. We are trying to determine what our best options are with surplus monies. Here are our options:
pay more off of our mortgage (4% interest); pay more off of a truck loan (1.99% interest); invest the money with our financial advisor (4%-9% return).

We have investments in low-risk stocks and bonds, but are still exploring a bit more in the stock market with medium-high risk stocks. I've recently opened a Scottrade account and joined Investopedia to expand my knowledge in this subject. But, we mainly go through our UBS financial advisor.

Debt, Financial Planning, Investing
Answers
Sort By:
Most Helpful
March 2017

This should be a "lay up" for your financial advisor due to the fact that he/she probably has answers to some of the key questions one would need to make this decision. When it comes to debt reduction versus investment options, these sort of decisions are quantifiable, which makes them cut and dry. But there are key questions that should be addressed. In what stage are you in as it relates to your mortgage (how many years left and what amount is now going towards principal)? That information can be found on your amortization schedule. The same holds true for your truck loan. Normally, the ideal situation is to have the debt load rate significantly lower than your capital investment rate of return. That seems to be the situation here. But other factors to consider is whether you wish to increase your monthly cash flow by paying off some debt and reinvesting that new cash flow. Some forecasting may also play a role in the decision. If your advisor sees a pull back in the market, take the opportunity to pay off/down some debt, freeing up extra monthly cash flow, and dollar cost average you way back into the market.

March 2017
March 2017
March 2017
March 2017