I Play the Imaginary Lottery Game to Clarify My Financial Goals
I want to start by saying that I don’t actually play the lottery. But I dream about winning it.
We have a pretty big financial goal, so every penny we can get goes to some form of living, saving, debt paydown or investing in something that will make us more money. But as prices go up and savings opportunities go down, I have rethought a lot about where any dollar beyond the bare minimum should go.
Here’s the Conundrum:
Does it make more sense to pay down all our debt? It’s all very low-interest but we have a lot because we have rental properties and a house with a mortgage. The benefit is that our cost of living drops. The drawback is that any extra cash we have is now locked into equity and we can only take advantage of other opportunities the cost of a saved mortgage per month. Also, if we were to pay off our loan now, it’s unlikely we would get another one quite so low if we had an emergency in the future.
If we put it all in emergency savings, even high interest, inflation makes it worth less and less. If a dollar goes 5% less far than a year ago and we earned 1% on that money, then our money is worth 4% less in December than it was in January.
Investing in traditional things like stocks (never individual stocks, always index…
