[USER]

Hi, I’m seeking some advice above and beyond that of my financial advisor and research I’ve done on my own.

We’re approaching $850k net worth (home equity, investments, cash, retirement, etc.) and my wife and I both work.

Our only debt is our mortgage ($424k balance, 2.875%) and one vehicle ($50k balance, 5.99%, other vehicle paid off).

I’m in tech sales (W2, $151k base, $302k OTE) and she’s in IT ($100k salary), one kid, two more on the way.

I had a great year and have set myself up to make between $500k-$700k due to the commission on a massive deal I just sold, which will pay me about $350k before tax.

My wife and I will both be maxing out our 401k (I max mine out every year), as well as HSA and three 529s ($16k total is tax deductible in our state).

I plan to beef up the emergency savings account to $70k liquid (6 months of normal expenses with current lifestyle, or at least 12 months if we live conservatively) because tech can be tumultuous.

My commission will come in two $175k traunches – the first in February, and the second later in the year. Should I pay off the vehicle to avoid the 5.99% interest rate, or invest that money?

(I’m currently in VOO, VOOV, VOOG, and VGT.)

That $50k invested today, assuming 10% annualized gains, would be worth $88k at the end of the six years, but it sure would be nice to wipe it out since we have twins on the way and all three will be in daycare, so that extra $800/mo could go far.

But the other part of me wants to keep making the payments as I have been, live frugally, and invest it so as to not miss out on potential gains.

[Jule]

I’d pay off the debt on the car loan. It’s only about 1/5 of the total bonus.

I’d also increase your emergency fund to a year since tech can be difficult at times to go from job to job.

[Scott]

Dude. You make 500k. the vehicle goes down in value every day plus your 6% finance charge. the market avgs 10% it’s not linear.

So, after 2 back to back 20% years, the odds are good a crap year is coming soon.

Pay off the car.

[Jonathan]

I’d go a step further and pay the house off. What would happen in 2026 if you had a major accident and couldn’t work, I doubt your spouse’s salary would even be able to cover the mortgage.

When I paid my house and rental properties off it was the best insurance policy I gave myself.

I’ve made poor financial decisions but being debt free isn’t one of them, it totally changed my mindset.

[David]

Pay off the car. Hate to break it to you, if you spend $140k q year before the kids you’re not living that frugally btw

[John]

So, you’re thinking about “playing the spread” between a 100% guaranteed 6% ROI (paying the car off) and a ‘totally not at all guaranteed 10% ROI’ for a net 4% return (ONLY if your upside forecast works out)?

Dave Ramsey did a study on successful millionaires.

They don’t carry $50k car loans at 6%. They own their cars outright.

Act like the millionaire you are about to become and pay off the damn car.

[Author]

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