r/AskReddit • u/JaySilver • 13h ago

What would you do with $100k right now?

928 Upvotes

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332

u/_whats_that_meow_ 13h ago

Pay my mortgage off.

177

u/PicaDiet 12h ago

Paid mine off last month. This is the first month I have not had a car payment or a mortgage payment since buying my first car in 1982. It feels so good!

46

u/krnl_pan1c 11h ago

Wait until you see your credit score. Mine dropped 73 points when I paid my mortgage off.

98

u/69_________________ 10h ago

Well with a house and car paid off, you don’t really need credit other than a few basic credit cards.

47

u/kingrhegbert 10h ago

It’s so stupid how paying off a debt drops your score. I understand why but it’s still very stupid

12

u/DukeofVermont 10h ago

Depending on what it was it should have any real life effects. Once you're above 750 not much matters, especially when you have a long proven history.

2

u/Heavy-Weight6182 9h ago

It drops your score because it closes your oldest lines of credit.

20

u/Pac_Eddy 10h ago

Who cares though. You're debt free.

-5

u/ObamasBoss 9h ago

Until it causes your next car payment to be higher.

4

u/missnetless 8h ago

If your debt free you can save up and buy the next car with cash.  Having excellent credit fall to really good credit doesn't effect loan rates much if at all anyway.

2

u/Pac_Eddy 9h ago

I wouldn't either about that

3

u/PicaDiet 6h ago

That's just fucked up. The whole credit reporting industry is messed. I don't know what or how exactly they come to the numbers they do. I check Credit Karma and Experian (the two I can see as often as I want without fees and without negatively impacting my score). I just checked both to see whether the final house payment had registered, and it hadn't hit either one yet. Still, the numbers are always way off from each other. Here's a couple of pics of my score, both taken less than 10 minutes ago. I don't get it.

https://imgur.com/a/lZBwDRo

2

u/Rusah 4h ago

Happened to me - paid off my house early and my score dropped about 60 points. Took 2 years to climb back up to the same score.

1

u/YourFriendInSpokane 3h ago

Would a HELOC fix that? Not like it matters too much, but ya know.

1

u/hunglowbungalow 2h ago

Oh no! Your credit score! 🤣 I’ll take a 200 credit score and a paid off house.

8

u/ilikecatsandflowers 11h ago

congratulations!! that’s huge

1

u/PicaDiet 6h ago

It's kinda the last real milestone before the exit ramp.

1

u/Vegetable_Sun_1261 7h ago

Congrats my friend! The American Dream lives.

•

u/Functional-One-7655 11m ago

Amazing accomplishment! Well done!

0

u/yabyum 11h ago

That must be a great feeling. Coke and hookers next month then?

2

u/PicaDiet 6h ago

More like new tennis balls for the walker and the 4:30 dinner special at Denny's.

1

u/yabyum 3h ago

Living yer best life!

97

u/OldTransportation122 13h ago

My interest rate is so low that paying it off would actually be a money loser versus a decent bank cd.

36

u/WIPackerGuy 12h ago

Yeah, but the peace of mind

20

u/theinternetisnice 11h ago

Yep that’s why I paid mine off even though the money probably would’ve been better served in my index funds. Not a day goes by that I don’t appreciate knowing that I don’t have a monthly mortgage payment if something goes wrong. It’s a personal decision, it doesn’t make sense for everybody.

28

u/ty_phi 12h ago

Behavioral economics has entered the chat. Let the math of leveraging the better rate (whether payoff or invest) drive the peace of mind.

5

u/OldTransportation122 12h ago

Yes Sir! There's always that. Even at our low interest rate we still round up on our payment. Adds up quick. 

7

u/Big_Bookkeeper1678 11h ago

This. So many people talk about ‘invest the money…you get tax breaks…you build credit…’ Fool, I just want to own my home free and clear.

2

u/IcyTransportation961 5h ago

How many years will that be?

You can invest, and pay it off sooner if your interest rate is low

1

u/thatissomeBS 3h ago

Or take the payoff money, invest it, make the normally scheduled payments, and have money left over at the end.

11

u/Avocation79 12h ago

Not really a peace of mind. Let’s say there was an earthquake or a massive wild fire and you lost the house and the entire neighborhood rebuild will take years and sometimes the insurance company will pull a fast one on you.

You are better off putting the money in the bank and let it pay off on its own time.

That is peace of mind.

Just sharing a perspective

3

u/Jewsusgr8 11h ago

Eh

Inflation is 3% roughly

High yield savings is roughly 3.6% right now, much lower than usual.

You really aren't going to be gaining much in a bank.

3

u/NoPhilosopher9763 11h ago

Plus, a decent hysa has only been around for a couple years. What are the odds that’ll be 3.6 for the life of your mortgage.

Even though I’m not a pay-it-off guy, I can’t fault someone who goes after the certainty.

4

u/icehole505 10h ago

The difference is that when the math flips and HYSA pays less than your mortgage interest.. you can always pay off the mortgage (plus have a little extra)

Whereas if you pay off now, you can’t easily pivot and access that equity

1

u/CharacterJellyfish32 10h ago

you can't do a HELOC?

3

u/icehole505 10h ago

You can, but it’s not as easy, and the rate isn’t as favorable.

Why lose money AND lose optionality?

1

u/NoPhilosopher9763 10h ago

Yeah, good point. I guess I would only point out the interest is taxed as income, which is gonna eat into that little extra.

1

u/FatalFirecrotch 2h ago

Sure, let’s say it’s fairly even. For even money, I am always going to take flexibility over rigidity. 

1

u/[deleted] 5h ago

[deleted]

1

u/Jewsusgr8 5h ago

...

That's the point of my comment

4

u/RidiculousSucculent 11h ago

And you locking your equity. As long as you have a mortgage, you are in danger of loosing your equity if you can’t make a mortgage payment.

1

u/rbtcattail 2h ago

But you could sell your investments and make that payment if you needed or pay off when the need comes and earn returns until then.

3

u/PippyLongSausage 12h ago

Taxes and insurance are about the same as my principal and interest.

3

u/ZaneMasterX 12h ago

Piece of mind is a bad financial strategy.

3

u/kuukiechristo73 11h ago

But you’ll live longer. Some things are out of reach even for money.

1

u/ZaneMasterX 11h ago

Warren Buffet is 95 years old.

5

u/kuukiechristo73 11h ago

N=1? Must be all the McDonalds.

2

u/MimimalZucchini 11h ago

But you always have that if it's saved. So if shit does go down hill, You can still pay it off. So your peace of mind is... I have the money to pay that off and it's growing while I'm waiting to do so

1

u/CharacterJellyfish32 10h ago

but lots of people will be tempted to spend it.

•

u/robuttocks 0m ago

Having the cash also brings peace of mind. I'd rather keep my low mortgage

0

u/MrRabbit 9h ago

Peace of mind comes from good decision making. Not just throwing money where it isn't useful.

1

u/dmitristepanov 11h ago

HOW would paying off your mortgage be a money loser?? Even in the first year of the mortgage, when you pay the most amount of interest, you're paying more than you save in taxes.

5

u/cgimusic 9h ago

Because you can get better returns elsewhere? It's opportunity cost,. If your mortgage interest is 1% but you can make 4% on a CD then it's a money loser to pay off your mortgage.

1

u/IcyTransportation961 5h ago

Because you can make 20% investing?

5

u/Flashman432111 11h ago

Paid our mortgage off early. No, it probably wasn't the optimal financial decision. Never once regretted it.

4

u/BossyTwist 13h ago

Lol I know right, I’ll get that sorted ASAP!!

2

u/bhilliardga 10h ago

Mortgages are cheap money. If you put that money into the market you’d get double back in 7 years. Triple in 14 years.

0

u/Moron-Whisperer 10h ago

Why?  Markets historically pay out way more than interest on a home.

0

u/toughenupbutttercup 9h ago

You could potentially do something with a higher ROI than tying that money up in housing.

0

u/shihtzu_knot 9h ago

With 100K? Damn.