Quote:
Originally Posted by feh
10% is in cash for a couple reasons:
- Following the advice I've read for 2007. After the run-up over the last 10 months, many people seem to think the market will be volatile this year, so having cash on hand is just hedging.
- Our portfolio is fairly aggressive; we have very little money in bonds. Having the cash reduces our overall risk.
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In this case I would not consume all 10% into paying off new house. I would keep some cash on hand.
Fundamentals behind WHY you made the decision to go 10% cash have not changed, yet if you pay off your new house, your allocation will have changed.
I think the flexibility of having cash is a luxery you can afford... you will probably get a long term return of 6-11% on the cash based on your current allocation... and the return on that money from a mortgage would be around 4-5%.