Fran Walsh

Your mortgage rate is the key variable in this decision. Below ~5%: investing the difference may win on paper. Above ~6%: paying it off starts to compete. Above ~7%: the math often favors paying it off. Here's the full framework ↓

Your mortgage rate is the key variable in this decision. Below ~5%: investing the difference may win on paper. Above ~6%: paying it off starts to compete. Above ~7%: the math often favors paying it off. Here's the full framework ↓

@cliffcornell_ What percentage of people would immediately plan their move if this was implemented?

A proposed NY estate tax exemption reduction from $7.35M to $750,000 with the top estate tax rate reaching 50% rather than 16% would be a significant change. Of course, this is just a proposal. But I can't help myself from thinking of the potential planning implications.

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@Invested_In_You Great piece here. With the right planning this can be a game changer in retirement

There's a 0% federal capital gains tax rate. It's not a loophole. It's sitting in the tax code, available to millions of people every single year. Most Americans have no idea it exists. Here's how it works:

@Invested_In_You Yep - I’m not aware of any other 7% guarantees!

@FranWalsh73 A guaranteed after tax return of 7% is hard to beat!

@RomanPuglise This is great - "Build wealth through concentration, and keep it through diversification" is a common quote we hear. Super applicable when it comes to high earners with equity comp

If you earn $400k+ and have seven figures in company equity... You’re probably focused on the wrong thing. It’s not just about taxes. It’s about how much of your life is riding on one company. Here’s how we think about it👇

@Hammer459265 That's a great framework - and if you can continue those savings rate you will likely achieve financial independence way quicker than most

@FranWalsh73 I invest 25% for retirement and above that goes to my 6% mortgage

@Greiser For sure. Its more of an optimization argument down the line when everything else is sorted out rather than one of the first 2-3 things one should be focusing on

@FranWalsh73 The last point is the most important one. Max the 401k and Roth first. The mortgage vs. invest debate is mostly irrelevant until the tax-advantaged space is fully used. Most people are arguing about the wrong decision.

@cliffcornell_ Absolutely - appreciate you brother!

@FranWalsh73 Fixed rate mortgages can even be an inflation hedge! Great stuff, as always here!

@Financialguide Lol, 0 chance you read the thread as usual. Just wait til you see the thread later this week on Whole Life and Annuities I'm sure you'll love that one!

@FranWalsh73 Oversimplified greatly

@Greiser For Philanthropic individuals this is a game-changer. My brother & I were both able to attend catholic school because of EITC donors - its a fantastic program and one everyone should take a look at!

Pennsylvania gives you a choice most people don't know they have. Pay taxes to the State. Or fund private school scholarships. Same dollars. Your call. Here's how one client is redirecting $9,000 of her state tax bill away from Harrisburg every year: ↓

@RomanPuglise For sure. Debt weighs everyone down differently & the emotional/behavioral aspect is often much more important to people than the math. If you have the wits to use both you'll usually be in great shape!

Awesome thread! Paying down mortgages is such a hot debate because there are so many more variables than just teh guaranteed return or being able to invest the difference. Often times, when having discussions, clients tend to throw out the numbers and it becomes much more behavioral. It becomes a cash flow and lifestyle decision because even at a 4% rate, not everyone sleeps well carrying debt.

That's a wrap! Foundations first. Do what's best for YOUR SITUATION. Everyone has different views on risk, debt, etc. 1. Follow me @FranWalsh73 for more of these 2. RT the tweet below to share this thread with your audience Disclaimer; This thread is for educational purposes only. The contents expressed are my thoughts alone. You should always consult a qualified tax, legal, or financial advisor before making decisions for your family.

TL;DR - Mortgage vs. Invest: - Rate = your guaranteed return on paydown - Under ~5%: investing may win significantly - Above ~6-7%: payoff competitive risk-adjusted - Many don't benefit from the mortgage deduction - Hybrid: max accounts, invest bulk, one extra payment/year