Bend Economy Bulletin Board

[redb]

Say you you inherit $100k. You approach your finiancial advisor and she tells you that over the next ten years they "believe" they can get you a 7% return on average, if you invest with them. While leaving the meeting, you realize that the remaining balance owed on your mortgage, which has 25 years left on it, is exactly $100k at 5.85%. What do you do?

[JoeFromSFO]

Pay off the mortgage and all other debt. Run from advisors who sell loaded mutual funds or worse yet annuities.

[bendbb]

I'm debt averse so I'd opt to pay off the mortgage.

Also, I'll use financial advisors as information resources, but I won't invest with them.

[geo]

Nearly my circumstance about 5 years ago. Paid off my mortgage.

[blofeld42]

You'll wind up paying about $190K on the loan. Depending on your marginal tax rate you'll be able to deduct some of the $90K on your taxes, and inflation should improve things for you a bit more, assuming you've got a fixed rate.

I'd be highly skeptical of the claimed 7% return, though.