Advice from Nashville's Financial Guru Dave Ramsey
Dave Says
By Dave Ramsey
Author of Financial Peace and The Total Money Makeover
8/28/2006
"Received inheritance … use it to pay off debt?"
Dear Dave,
I'll be inheriting some money soon, and was wondering if I should pay off my house or invest in mutual funds. I'm 48-years-old and debt-free except for the house, and my mortgage rate is 6.5 percent. What do you think?
Rob
Dear Rob,
If your home was paid off, would you borrow on it to invest in mutual funds? Of course not! The same principle applies here.
Pay off the house, Rob. Then take the money you were putting toward your mortgage payment, along with as much other cash as you can wring out of your budget, and have it automatically drafted from your account every month and poured into a good growth stock mutual fund.
If you do this, your nest egg will grow at a PHENOMENAL rate and you'll have a big chunk of cash waiting for you at retirement!
- Dave
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