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=Anonymous][quote=Anonymous]For us, paying off our house was freeing.  We still saved for college and retirement but we had a lower-cost house.  [b]I don't see why you wouldn't pay it off.[/b]  Now, if something happens we know we will be ok in terms of housing and can live on far less if we need to.  Now instead of the mortgage, we can invest the money we would have spent on the mortgage or do things we might not have done otherwise.[/quote]

I wouldn't pay it off because the math speaks in favor of keeping the mortgage due to low interest rates. I understand the emotional aspect of being mortgage free in case something happens. But I more of a risk taker and I value the returns more than the peace of mind. If I didn't have a risk taker mindset, I wouldn't have quit my good paying nine to five job to start my own business. 
Most people are more conservative and play it safe. That's why most people aren't entrepreneurs. Just like they value the safety of a nine to five W2 job more, they will also value the safety of a mortgage free house more. People with entrepreneurial mindset think differently.  [/quote]

But when the mortgage interest rates are lower than what you can get in an FDIC insured bank cd or treasury ibond, paying off the mortgage is not about preventing risk.  That's the situation most homeowners are in right now.  It's not a choice of pay off the mortgage or invest that money in the market for more gain.  It's pay off the market or put the money in the bank for more gain.  It just doesn't make sense even if you're totally risk-averse.[/quote]

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