Should I pay off my mortgage or re-invest my inheritance?

[Jonathan Studdard]

I'm inheriting enough cash to pay off my existing mortgage of a little over $180,000 and still have a little under $15,000 leftover. While the idea of having a paid-off mortgage seems awesome, I feel as though with the right strategy I can use that cash to make more money flipping real estate, which I ultimately want to do. I'm brand new to the game and don't know what my best starting point is given my situation.

[David C.]

Split it up.  Allocate $50,000 to start up your flipping business.  Pre-pay your mortgage with $50,000, so each payment you make is now farther down the amortization schedule.

Put the remaining 95,000 in a separate account a revisit the decision in a year.  If you have failed spectacularly, you probably only lost 50,000.  If you have done awesome flipping, you can add capital to it.  If you get sick or injured, you have 95,000 to make your life easier.