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][quote]This is an important point that is overlooked often.  We, and suspect many people here, are "rich" by any rational definition.,  But we aren't "rich" in that I can come up with the outstanding balance on our mortgage (~$700k) at the drop of a hat without adverse consequences.  Sure, we have it, but we'd get smoked in taxes, and potentially other penalties.  That's just a longer way of saying what the PP said - if I paid off my mortgage, I wouldn't have easy access to liquidity.  
 [/quote]

I feel the same as above.  In addition payoff math is not that trivial and simulations show that both approaches are valid.

https://www.honestmath.com/mortgage-math

The math behind this classic tradeoff is much trickier than it seems

For U.S. equity investors over the prior 30 years, there was little to no difference between paying off your mortgage over a 15- or 30-year time period

Any cost or benefit for this tradeoff was just as likely to come from tax benefits as it was from investment arbitrage economics

Stock market volatility, leverage, and timing (luck) are essential to the economics

The decision on whether or not to prepay a mortgage might be better served by factors other than perceived arbitrage opportunities (e.g., risk aversion, personality, personal goals, unusual tax implications)[/quote]

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