Let’s start here: You’re right, these are all great options to consider. But don’t get stuck trying to make the perfect decision that you don’t make any at all. When all options are good, decision-making can get murky. Lessssss break it down:

Option 1: Sell Down Your Portfolio to Pay Off The Mortgage

Pros:

• Immediate cash flow relief, lower monthly fixed costs = more breathing room.
• Emotional safety and stability, especially with unpredictable income.
• Potentially less stress = more creative capacity to pursue your music goals.
• Guaranteed “return” - if your mortgage rate is 6%, paying it down is like earning 6% risk-free (plus, you can always put it in an offset for max flexibility).

Cons:

• Capital Gains Tax, depending on how much those assets have grown. You’ll get a 50% discount if you’ve owned the asset for more than 12 months.
• You reduce your exposure to diversified market growth over time (especially important if you're young-ish and still in wealth-building mode).
• Once the money is in your home, it's not easily accessible - especially if you need liquidity later. And you might find, if you’ve had a period of lower income, the bank may not let you release additional equity and pull out the cash when you need it.
• Interest rates might keep going down (we love that), meaning the differential in the overall return between both could be larger over the long term.

Option 2: Keep The Portfolio Invested and Chip Away at The Mortgage

Pros:

• Your investments could continue to grow over time, potentially building more long-term wealth to replace, or supplement your income for the long term.
• You maintain liquid, diversified assets and flexibility.
• Avoid triggering capital gains tax in the short term.
• Depending on what you’re invested in, you might get higher long-term average returns than your mortgage interest rate.
• A weird one, but it might force you to keep an eye on your income. If you pay off the mortgage, you may then have loads more time to be able to do creative pursuits (awesome), but it might mean that it comes at a cost of being able to achieve some of your longer-term financial goals (not as awesome).

Cons:

• Less monthly cash flow (you’ll still have a mortgage to cover).
• You carry higher risk if investment markets fall or income slows.
• Emotional load - this option may feel less “safe” during income dips. And financial stress is real my friends.
• Investment returns are never guaranteed, but you can be pretty darn confident your mortgage will always have an interest rate attached to it.

Option 3: Do a Hybrid - Reduce But Don’t Eliminate the Mortgage

This is often a sweet spot. You sell some of your portfolio to lower the mortgage balance significantly, reducing your repayments and increasing cash flow, but keep some investments working for the long-term.

Why this can work:

• You get the emotional, time and financial benefits of reduced debt.
• You still participate in market growth and have diversified assets. Eggs in many baskets. We like that.
• Your monthly cashflow burden is reduced - so you have either more cash monthly to deploy to your financial goals (don’t forget your Super here, especially if you think you might be reducing your income), you can stash additional cash in your offset and/or create a regular investing plan with the surplus.
• You're basically having some cake and getting to munch away on it. This means you haven’t completely forfeited one goal (being mortgage-free, or having a passive income), at the expense of the other. It will take you longer to reach both, but one isn’t sitting on the cutting room floor.

The great news is, all of these are good options. If financial freedom means being able to fund a season of creative output without any mortgage stress, the answer might lean toward clearing the mortgage. If it means building wealth for long-term security, investing may stay in the mix.

Either way, sounds like you’ve built a great base - now it’s about actively making the decision that works for you. Good luck. 

Have a money dilemma?

Money dilemmas can be a nightmare! They can leave you up all night ruminating about what to do, have you feeling alone and isolated or just plain ol' stuck. So, we are here to help. I am going to tackle one a week and give you my unbiased, no BS general thoughts on how to tackle your conundrum. We would love for you to send yours (or someone you know) in. 

Obvs all of this is general advice only... especially important to note any and all of the comments above do not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs.