Is 2.8% free money?

[chesebert]

Got about 50k in loan (LOC) sitting at 2.85% at the moment. I have a mortgage of 50k at 3.75% on a rental. Several options to consider for future cashflow:

1. Use a little over half a year' of future savings (about $50k) to pay off the loan;
2. Invest the future savings in the market (DCA);
3. Put the savings as a downpayment on a second rental (will start looking in the fall); or
4. Buy a new amplifier and headphone system ($25k) and, in general, engage in rampant consumerism :D

[arebelspy]

Since it appears you don't have much of a plan in terms of paying down debt, investing, asset allocation, or anything of that nature, I voted for the headphones and amp.  Might as well enjoy the money you're blowing. ;)

(This is tongue in cheek for: this thread is ridiculous, don't ask strangers on the Internet where to invest a surplus, ask where to get the knowledge for you to figure out the best plan to invest the surplus.)

[chesebert]

The last option was meant as a joke. Removed to improve poll accruacy.

One clarification, the LOC is a private bank loan not guarenteed by any real property.

I am primarily concerned with risk/reward and gain between the securities market and real property market, on the one hand, and lock in a 2.8% after tax-free gain by paying off the loan, on the other hand.

[arebelspy]

The last option was meant as a joke. Removed to improve poll accruacy.

Clearly you missed the whole point of my post.

None of the above is my vote.