Leaving the house mortgaged is a reasonable and prudent decision, particularly at the rock-bottom interest rates of the past N years. The size of the house may

Leaving the house mortgaged is a reasonable and prudent decision, particularly at the rock-bottom interest rates of the past N years. The size of the house may be excessive, on the other hand -- most of the returns on a large home are not investment returns, but rather a form of consumption -- and the purchase of a boat, financed or otherwise, was probably the real five-or-six-figure mistake. I made $500k last year (selling 1.5 years' of equity compensation near the top of the market) and I'm celebrating with a brand new mortgage and a car, but my monthly payment on both will be lower than what I was paying in rent, inflation is eroding the value of my mortgage debt. A conforming loan of $647,200 at 4% is an inflation hedge with a rate of return around $2000/mo, or ~60% of the mortgage payment. The car is going to be used (real interest rate around -4% to 0%, details TBD). Boat? Maybe a kayak or canoe. :)