Healthy Debt

debt 200x200 Healthy DebtIf you are fortunate enough to have a few extra dollars at the end of the month after paying your mortgage what should you do?

Sample Mortgage Details

  • 5.25%
  • 25 year amortization
  • $400,000 loan
  • loan payments of around $2400
  • our user has an extra $600 every month in free cash.

Option 1: Put the money into a dividend paying stock

In this scenario the user decides to pay the mortgage for the full 25 years and invest the extra $600 directly into a dividend paying stock. Our user finds a stock with an dividend yield of 6%, once the appreciation in the stock’s value is included the return amounts to 7.25%.
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