Do I pay off the home loan, invest or put more into super?

One of my jobs is to help clients make sensible decisions about money.

One of the most common questions I get is,
“Should I repay the home loan, invest or put money into super”?

And, perhaps unsurprisingly, the answer is always that it depends ….  each individual needs to make a decision based on their personal values and their personal goals. For example, if your goal is to be debt free, then sure, pay off the home loan.

However, if we put the emotions to one side for a moment and look at the hard facts, the answer is pretty simple – but contrary to popular belief.

I have given you access to a fabulous visual calculator which you can acess by clicking on this link. Move your cursor to a point on the graph that intersects the return on the market (8% is a conservative guess), with your home loan rate. The answer as to where your money would be best invested will appear.

Have a play around, clicking in different parts of the graph and note how if the interest rate on your home loan is high, and the markets have fallen down a hole, then paying off the home loan is best. If this is not the case, then super or geared investments are better.

Mmm interesting. Call me to see how this could work for you.

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