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[quote=Anonymous][quote=Anonymous][quote=Anonymous]I learned that many people with high incomes, who look and seem very responsible at work, are very leveraged in their personal lives.

About a decade ago I was a VP at a company that went bankrupt (various reasons including some bad luck). The company was bought out by a small group of private investors. There was a long transition, almost 6 months, tons of layoffs. These investors were horrible and unethical, it was very clear. They absolutely were in some shady, illegal business. Many of the people one level above me, c-suite and EVPs, and I had the option to stay on. Everyone wanted to leave but about half stayed on and all gave me a similar story that they couldn’t afford to be unemployed for any significant amount of time. All had been there years, and were making from 400-900k for many years. I was much younger, making 300k (and much less just a few years earlier). I wasn’t worried at all, I had savings and knew I would find a job fairly quick. They were making on average double what I made, and for many more years. They had little to no savings! All of them also had much nicer houses than I did….leveraged! I couldn’t believe it for most of them, even the super conservative CFO told me he made some bad financial decisions in his life. People leverage…lots of people, not just a few outliers.[/quote]

Aaaand this is why the "paying off your mortgage is dumb" crowd are idiots.  So often, leverage is simply an excuse to live beyond one's means.  If you are the type of person who will plow an extra $5-$10K in principal to your mortgage every month, you basically never get in trouble financially.[/quote]

Paying off your mortgage instead of investing is dumb.  Paying off your mortgage instead of spending down every dollar of your $400-900k salary would not be dumb. [/quote]

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