Reply to If paying off your mortgage is dumb, why do so many rich people do it?

Forum Index » Money and Finances

Reply to "If paying off your mortgage is dumb, why do so many rich people do it?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Investments tank. No one can take away a house I own.

I don’t need to optimize the return on every dollar. I need to sleep at night.

- 2 houses and 3 rentals, $1.5M in retirement, zero debt[/quote]

The government can and will take away your home if you don’t pay the property taxes. If all your money has gone to pay your mortgage down and you have nothing left to live on when you lose your job you will either be forced to sell the property or stop paying some of your bills.

Not caring about optimizing your return is perfectly valid if it helps you sleep well at night.[/quote]

Learn to read, PP. None of us mortgage-free posters put "all our money" into our homes. We simply chose to aggressively pay off debt while at the same time saving and investing.

Just as another PP noted, being debt free was a financial goal for us. We never fly first-class or stay in 5-star resorts, our newest car is 11 years old, those things were not a priority for us (and never will be).

Also, because we paid off our mortgage more than 15 years ago, the money we would have sent to the bank instead went into the market. Do that math.

[/quote]

More than 15 years ago is a very different interest rate environment--for anyone who has taken on a mortgage in the past 15 years however, they have been able to refinance down to very low rates so advice to pay it off early really doesn't make sense--for optimization of money OR for security.  It doesn't matter if you do all those things--whatever money you are putting towards pre-paying your mortgage is money you are not putting into a cash equivalent that currently pays more than most people's mortgage interest rates and/or the market which might be right for someone's strategy.

People haven't mentioned climate risk yet, but more and more individual homes being a large part of someone's assets but located in one place --all the insurance companies are really working on this right now.  Insurance rates could go through the roof in the next 10 years if your particular home is now considered endangered--also making it harder to sell.  As a PP noted, banks will work with people for short sales or whatever if they have some of their own money tied up in the asset.  If you own it, you're on your own.

Rich people don't have to optimize their money, but telling middle class people to pay off their mortgages early now is bad financial advice.[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics