Engineer With $450K Condo And $35K Cash Boom Faces Huge Decision: 'Pay Off Mortgage Or Bet Big On Stocks?' Reddit Is Divided

The dream of FIRE or Financial Independence Retire Early, has contoured in the minds and hearts of many people and more individuals have started to think about how they can achieve it.

Yet, for many trying to get out of the 9-to-5 grind, one question draws near: How do you divide the money to make it happen?

That’s exactly what one 31-year-old software engineer has been wondering after a $35K sports betting windfall, which made him turn to Reddit for investment advice.

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The engineer already has a lucrative income: $150K base salary and $30K in bonuses and RSUs. Still, he’s considering optimizing the recently won $35K to accelerate his FIRE dream, which has a 14-year time window.

The options he’s considering? The 31-year-old is thinking of either paying the mortgage for his $450K condo with the $35K since it would cut 2.5 years off, investing the whole sum into VTSAX, waiting for a market dip, making a down payment for an investment property or maxing out i-bonds.

“Leaning toward VTSAX but the mortgage is at 4.5% (2021 refi). Property values rising are fast in my area, so an investment property is tempting,” he writes.

What would other Reddit members do if they were in his position? Let’s see what they recommend in the comments section.

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Where to Invest $35K? Redditors' Advice for the 31-year-old Software Engineer

VTSAX for the Win

Most commenters agree that investing in a long-term index fund, in this case, VTSAX, is a good idea. The rationale behind this recommendation is that these funds grow over time steadily with minimal effort or risks.

“Personally? I’d just invest it in a long-term index fund and forget it,” one Redditor wrote.

Another comment suggested the 31-year-old invest the full amount into VTSAX.

“Lump into VTSAX,” the comment says.

A third Reddit member of the r/financialindependence community where the post was written has also agreed that lumping into this particular index fund is a good idea.

“Lump sum into VTSAX; it is the only one worth considering,” the user says.

While another Redditor recommended investing in VTSAX, he also wondered if people are still buying I-bonds.

“VTSAX imho – are I-bonds still worth buying?” he wrote.

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Avoid Prepaying a Low-Interest Mortgage

Some of the commenters advised against prepaying a low-interest mortgage with the $35K because the money could be better invested in higher-return assets.

“Dunno if this helps, but the additional mortgage payment is probably not a good idea. Mortgages leverage OPM and have tax benefits. You’ll probably be selling and moving to another house someday. If not, like you’re sure you want to live there forever, then I’d still suggest you keep the mortgage unless you’re going to cut your mortgage payment time in half or something (2.5 years does not sound like that),” one Redditor said.

Another member of the r/financialindependence community believes that paying the mortgage in advance is an awful idea.

“Don’t waste your money prepaying a low-interest-rate mortgage,” his comment reads.

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Stop Gambling

A significant number of comments urge the 31-year-old to quit gambling because the addiction and the likelihood of losing the winnings is beyond high.

“I think the key point here is to absolutely under no circumstances go back to gambling. You won this time and so you’ll be tempted to again. A gambling addiction is the #1 way to make sure you’ll never retire. So what would I do in your position? I’d stop gambling,” one of the first comments reads.

Another user pointed out that uncontrolled gambling is a big concern and the huge sum the software engineer won likely implies that he has a higher risk appetite than they should.

“Uncontrolled or addicted gambling is a real issue. And admittedly a 35k sportsbet win suggests someone who is probably risking more than they should,” the user wrote.

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