I agree with the general investing principle that a mortgage, or any debt, can be viewed as a "negative bond," i.e. a stable "investment" that consistently nets a negative return.
Whether you continue to invest in equities or not given this mortgage is up to you (I would pay off the mortgage) but I agree with the other posters that I would absolutely stop investing in bonds. Every dollar invested in bonds currently is losing you money and if your bond contributions are in tax-sheltered, there is an argument to be made to switch that 15% allocation to stocks (so go 100% equities), and to switch 15% (at minimum) of your taxable contributions toward the mortgage. To be more extreme, it may follow to sell your bond holdings (15% of 2 million = $300,000) or replace with stock in tax-advantaged, and sell stock in taxable to pay down mortgage. You will have ample time to buy bonds back later.
This is not commonly stated here on Bogleheads, but elsewhere you will find recommendations not to invest in bonds until you are debt-free, unless your debt interest is lower than your post-tax bond return.
Whether you continue to invest in equities or not given this mortgage is up to you (I would pay off the mortgage) but I agree with the other posters that I would absolutely stop investing in bonds. Every dollar invested in bonds currently is losing you money and if your bond contributions are in tax-sheltered, there is an argument to be made to switch that 15% allocation to stocks (so go 100% equities), and to switch 15% (at minimum) of your taxable contributions toward the mortgage. To be more extreme, it may follow to sell your bond holdings (15% of 2 million = $300,000) or replace with stock in tax-advantaged, and sell stock in taxable to pay down mortgage. You will have ample time to buy bonds back later.
This is not commonly stated here on Bogleheads, but elsewhere you will find recommendations not to invest in bonds until you are debt-free, unless your debt interest is lower than your post-tax bond return.
Statistics: Posted by breakfastinbed — Mon Sep 02, 2024 12:10 am — Replies 9 — Views 688