Apr 1, 2015
7:53:34am
7:53:34am
It depends on your risk tolerance. But you could evaluate it this way:
Take this formula:
equity value in house (be conservative)
divided by total net worth (all of your assets less your liabilities - don't include personal property like cars but include your house)
If that number is greater than 25%, I would definitely lean toward more investments. If it is less than 25%, I would allow yourself some feel good, but continue to put most of your "new" savings each month into something besides your house. Maybe take 90% of your savings each month for investment and use 10% to make extra payments.
Hard to give an exact formula without specifics, but hopefully that gives you something you can plan/evaluate.
equity value in house (be conservative)
divided by total net worth (all of your assets less your liabilities - don't include personal property like cars but include your house)
If that number is greater than 25%, I would definitely lean toward more investments. If it is less than 25%, I would allow yourself some feel good, but continue to put most of your "new" savings each month into something besides your house. Maybe take 90% of your savings each month for investment and use 10% to make extra payments.
Hard to give an exact formula without specifics, but hopefully that gives you something you can plan/evaluate.
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