Should we take a flyer?
Question;: We owe about 95,000 on the house. We will get between 60 and 65 thousand this month from my grandmother’s estate. We both agree that we would like to pay off the house as soon as possible. We were looking at adding 2000 a month to the payments for 5 years. We come within 30,000 of being done. We can’t get around this. The money wouldn’t grow much in savings but it would be a safety net. I am wondering should we take 5 to 10 thousand and put it in stocks as that sector is starting to take off or maybe play around with gold or something. Derrick isn’t sure because the money is there and doesn’t want to lose it. We earn about 80,000 a year with one kid, before taxes. Kat, Grants Pass, OR
Answer: It all depends on what you’re trying to accomplish with the money. Stocks are risky. Gold is a speculation. You can’t get around it. So, if this is money you don’t want to lose, its part of your financial safety net, and it’s a critical sum of money toward the goal of getting rid of your mortgage then I would steer clear of stocks and gold.
You can get a good sense of the risks associated with chasing stock market values listening to Tess’ interview with columnist Jason Zweig of the Wall Street Journal. Gold is a far more speculative investment than equities.
To be clear: This isn’t a brief against putting money into riskier assets. But my take is that you have a goal of owning your home. Derrick doesn’t want to lose the money. So, I would stay conservative, paying down the mortgage or a combination of accelerating mortgage payments and topping off your emergency fund.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.
You make our
Support nonprofit news you love with a gift today.