Olga Zavyalova

A friend of mine has faced a dilemma – a few years ago he inherited a good house in the neighborhood of Denver. The house is pretty big with two floors and a spacious garage for two cars. But my friend is crazy about another city – West Palm Beach (Florida) where he’s been living for the last two years.

He considers this city ‘the best place for the youth and for fun’. Well, I can agree with this statement as I lived there in 2003-2004. The city is great for entertaining and relaxing but for me it’s too noisy even in the suburbs.

But the problem is that you’re not going to stay young and single (unless you want this) all the time. And for a family life a quiet house near Denver is a better option. My suggestion is the following: 8-9 onths in Denver and 3-4 months in West Palm Beach. Good idea?

What is better: to invest the money or pay out the mortgage?

This question is a difficult one and it largely depends on the full financial environment. You have to take into account not only your profit. Before taking the final decision, ask yourself and answer the following questions:

-         How much current savings do you have?

-         Do you have any retirement savings?

-         How much do you need for everyday life?

-         Are you going to move or change a place of work?

-         Do you have money for some unexpected challenges?

If you invest the cash, the tax advantage is kept, liquidity is kept, and you can pay down the mortgage if you need later. But if you pay off your mortgage, you’ll stay without money and probably you won’t have chance to get cash again. 

“Cash is king”, in case of need having cash is much better than having more equity in their real estate property.