[USER]

I’m seeking advice at the age of 42. Recently, I lost my high-paying job, and my monthly mortgage payment is $3,800. Have around 1m in eTFs.

Finding a job in this market might be challenging, and there’s a possibility of a recession that could further complicate my job search and potentially reduce the value of my investments.

Considering these factors, does it make sense to allocate around $200,000 towards principal so that I can work part-time in the meantime to pay my bills?

Alternatively, I could focus on preparing for the future and avoid heavily relying on a high-paying job

I do have enough emergency fund to cover for one year.

[Huan]

You are still young and have time to pivot. Don’t make any drastic change yet!

Keep $200k as your emergency fund.

That will be good enough for at least 2 years (which should be enough time for the job and stock markets to recover).

[Yims]

If you have other rooms in the house, consider renting out. Or, sadly, if it comes to it, renting out your master bedroom and moving yourself into one of your smaller bedrooms.

It can help stabilize the house situation as long as you get th right kind of tenants who will. not add drama.

[Colleen]

Retain cash. Paying principal helps you zero. Pay the payment from the cash if needed.

[Caroline]

Wait! Are you planning on using $200k to pay down the mortgage principal? If that is the case, then no.

At this stage, you need liquidity, specifically the ability to pay all bills as they come due until your employment situation stabilizes.

Suggest you use the $200k that way. And pat yourself on the back that you have that $200k, OP.

[Pablo]

If I had a million in ETFs, I would just go to any country in SE Asia and retire, live on that and let it continue growing.

In 8-10 years it would likely double, even while living on $1200 a month (which you can easily do there).

[Shainalee]

The worst thing that can happen in a recession is a job loss. Whatever you can do to keep your house is the correct option imo.

Especially where your investments are going to drop quite a bit, I think taking care of your house and giving yourself breathing room until you find a comparable job to what you had is a good idea.

[Diana]

Ask your mortgage servicer whether you can recast, usually there is a fee.

With recast, you can make a huge payment and redistribute your payments, reducing your monthly payments.

[Author]

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