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Michal reacted to KDave in Goal - Financial Independence In Ten Years
I have change my mind
Over payments when comparing investing vs over payments over the same time frames - ie, saving 5 years from the mortgage vs investing for the same time frame, the compounding effect is lessened which makes it easier to justify the over payments.
Although on paper you are better off investing by several thousand if you can find the return, and if you use long time horizons then the compounding returns win easily - nothing is guaranteed over such a time period and I am not convinced such a return, or the earned capital, could be reliably maintained. There is also the question/risk of interest rates rising. The idea of eliminating a recurring living cost several years early is very attractive. Although overpaying is a rather low return, it is a guaranteed return in saved interest, vs a speculative bet on compounding returns which only really matter over significant time frames. I think I can live with the lost paper capital that may or may not have come to pass in exchange for the guaranteed returns (financial and otherwise) of paying off the debt early.