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Reply to "If paying off your mortgage is dumb, why do so many rich people do it?"
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[quote=Anonymous]Most rich people don't do it. They know the power of cheap leverage. But some rich people do because they are not that smart about money. Others might not care about optimizing. Buying a house entirely in cash is also often a good negotiating tool and also can avoid transaction fees. That's different than paying down your mortgage sooner and can make sense. I'm opposed to it because it's less secure tbh--I'd rather keep my 250k ibonds in the bank earning 6-11% right now, another 50k in a 5% cd etc. than pay off the remaining 200k on my mortgage at 2.49%. And it's not just because it's a better deal. I can pay off ANYTHING I need with those bonds/cd, if it goes into my house I just have no mortgage (still have to pay taxes and insurance). With 300k in "safe money" I feel confident to invest in other things that make even more. [/quote]
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