Reply to If you were to inherit $2 million, would you pay off the remaining $150k of your very low interest mortgage?

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Reply to "If you were to inherit $2 million, would you pay off the remaining $150k of your very low interest mortgage?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]To those of you that wouldn't pay off the mortgage, how many times in life do you spend money on yourself that you don't need to spend, like on an expensive vacation, jewelry or a new car? Those expenses are more wasteful than paying off a mortgage.[/quote]

+100

The whole "I'm more interested in optimizing my money" philosophy rings hollow unless you are extremely frugal in all other regards, which many on DCUM are not, as evidenced by all the "We make $350K but live paycheck-to-paycheck" threads.

This is just late-stage bubble stuff that happens after a 16-year bull market, and we've seen this before.  I've watched all of Berkshire Hathaway's annual meetings, and there are instances of Buffett in the late 90s talking about how unrealistic expectations had become, citing a survey showing that investors were now expecting to get 16-17% a year from the market based on returns from the early 80s through the late 90s.  And, of course, shortly thereafter, we began a "lost decade" for stocks.  How many people who inherited $1M in 2008 were likely eager to put it all in the market instead of using a small fraction to secure their family's home and eliminate their largest bill??[/quote]

THIS 1000%

The mortgage payoff is a Guaranteed Rate of return (whatever interest rate you have).  Nobody can take that away from you.  so as long as you have an Emergency fund (which with $2M you should), it's likely a wash.  Because you pay taxes on the CD/MM interest, and the stock market can take a 40% dive at anytime.  And now for the future, you can take you monthly mortgage payments and continue to invest it in the market.

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So lock in the “guaranteed rate of return” by paying off your mortgage because the stock market could crash. Then after you pay off your mortgage, use the monthly payment you would have made and invest in the stock market?

You contradicted yourself. [/quote]

Well you can lock in the guaranteed rate of return for the mortgage payoff (no more interest).  Then it's up to you if you take that mortgage payment and invest in the market, put into a ladder of CDs/MM/Treasuries or burn it on vacations/dining out/fine wine/etc.  It frees up the mortgage payment to do whatever you want with it.  
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