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

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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]We aren’t paying off our mortgage because we have a very low rate. Our non-retirement savings are in a combo of high yield savings accounts and low cost index funds. We are not doing anything fancy or aggressive, so we’re out earning our mortgage rate as-is. We don’t have the desire to invest our time and energy at this phase of life (young kids) to be more sophisticated investors. College saving is on track and we plan to retire in our mid-late 60s.

I see paying off a mortgage as a mental and emotional decision in addition to a financial one. I can see how, for many people, freeing up that monthly cash flow helps them feel more comfortable. We contribute to our retirement accounts, college savings, an employee stock purchase plan. If we fell on hard times, we can stop or reduce any of those payments to free up cash flow. I recognize that is a privileged position and many families don’t have a lot of optional monthly spending. In that scenario, freeing up the cash flow to the mortgage may not be the most financially advantageous choice in the long run. It is however an “insurance policy” to help them feel better about their ability to adjust to changing financial needs. [/quote]

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