Invest for the future, or clear your mortgage ?

Murphy_The_Cat

I have often wondered what people consider to be more important / a btter thing to do with their spare 'investible' money at the end of the month.

On the one hand, mortgage interest is usually at a low(ish) rate and isn't expensive borrowing, on the other hand, making sizeable profits from S&S investing is (according to most financial journos) going to be a lot harder for a while, and a lot of people are going to get their fingers burnt.

So what do you reckon ?

With your spare investible money each month, what will you do with it this year ?

dunstonh

Its a risk thing and also a tax thing and also what you plan to do long term thing.

Using the stocks and shares ISA allowance can be far more beneficial in the long run as it is a use it or lose it allowance. The long term benefits of having money in an ISA can outweight the short term gains of reducing the balance.

Remember stocks and shares doesnt have to mean stockmarket and there is more to the stockmarket than the UK. The UK media is too London focused.

cloud_dog

I just knew you were going to be sooooo sensible and post something like this :beer:

butterfly72

Intresting. I was wondering the same.. only I'm saving for a house deposit. I sort of want to use my S&S allowance but also know that a larger deposit will be beneficial. I don't have stacks to spare and am putting approx 1k into cash savings per month. I have a few months to ponder!!

Murphy_The_Cat

cloud_dog wrote: »

I just knew you were going to be sooooo sensible and post something like this :beer:

moi ? :rotfl:

If the press is to be believed, Joe Public Investor is pulling out of S&S and into cash at an ever increasing rate - I was curious to see if MSEers were/are the same.

cloud_dog

Murphy_The_Cat wrote: »

moi ? :rotfl:

If the press is to be believed, Joe Public Investor is pulling out of S&S and into cash at an ever increasing rate - I was curious to see if MSEers were/are the same.

MTC, you're off the hook, it was aimed at DunstonH.

Another option, how about being in cash in your S&S ISA? :j

McSaver

I just put all my cash into savings accounts, At least it isnt at risk on the volatile stock markets, Although I may put a spare £1,000 or so into a Unit Trust S&S ISA and see what happens. Since Saving is a bit boring.

Dithering_Dad

I'm doing both at the moment. I'm paying down my mortgage quite heavily with large overpayments, which has so far reduced my monthly mortgage payments by £300 per month. I have used this 'freed up' money to invest in my wife's stakeholder pension and I invest the same amount in my own.

In my view, I am securing myself financially in the short to medium term by utilising mortgage overpayments which are lowering my debt levels, lowering my monthly outgoings and increasing the length of time my Emergency Savings will last. I am also securing myself financially in the long term by paying into the pension plan.

I'm currently 9 months into a 3 yr challenge to pay off my mortgage and build up a combined 100k in our pension pots. If this all works out I'll be a long way down the road to financial freedom.

Paul_Herring

If I had a mortgage, I'd be tempted to split it 50/50* with S&S ISA (which is a proxy for my pension.)

* the 50 being variable since I can only stick so much in my ISA.

purch

I know the sensible thing is to look at the Tax situation, rate of return blah blah blah.......

Personally speaking I have been lucky enough to be mortgage free since 1993 (33yo) and I can tell you the freedom and peace of mind that affords you to do all or any of the other choices is worth everything in my book

derrekmay

I would invest in the fututre.
If you are able to pay a little bit of your mortage each time it is really worth it.
However you have to find a investment that generates a good profit with relatively low risks...