4 ms·

I think you can probably do better investing than in paying off a mortgage, depending on when you got in on the mortgage rate. Plus, yes, you have that money m

I think you can probably do better investing than in paying off a mortgage, depending on when you got in on the mortgage rate. Plus, yes, you have that money more liquidated when you need it. (Plus mortgage interest is tax deductible).

LatencyKills 11y ago
I agree with you but on the existential side of things not having that mortgage payment hanging over you every month is quite liberating.
- xienze 11y ago
  Yes, assuming you also have a job. Having no job (and no desire to get a job) and little savings (the author says it almost all went to paying off the mortgage) is a little stressful, to say the least. In this situation having a big pile of cash and a mortgage would be preferable.
  - eevee 11y ago
    I do also have some pre-existing savings; I just don't want to use them if at all possible (and have to start all over, sob), so I've been deliberately pretending they're unavailable.
    - kctess5 11y ago
      I understand what you're saying, but a technical note: you say "start all over," but I think that is untrue. You would be starting from the position of having no debt and owning your home outright (a positive net worth.) That's an excellent position to be in, in terms of trying to build savings. Congrats on the mortgage! :)
stinkytaco 11y ago
Mortgage is tax deductible if you are itemizing, which most people in the US do not. He's almost certainly not going to be itemizing if he doesn't have an income any more. Additionally, you probably can do better investing, but we don't know when he took out his mortgage. I got a mortgage in 2000 and the rates were much higher. A guaranteed 6.5% return on my investment? Not too bad. Refinancing can be expensive, and depending on what remains on the mortgage it may not be worth it. So really, it's almost impossible to speculate on whether paying of the mortgage was a good idea until we know more of the details. I admit I would be inclined to pay it off just for the certainty and the immediate lowering of expenses. Investing can take time to return, possibly more time than he has.
ryandrake 11y ago
You need to account for risk in your calculation, since investing in stocks or bonds is risky, but paying off a 4% mortgage gets you a risk-free 4%. Show me any other risk free investment out there that's that high.

LatencyKills 11y ago

I agree with you but on the existential side of things not having that mortgage payment hanging over you every month is quite liberating.

xienze 11y ago
Yes, assuming you also have a job. Having no job (and no desire to get a job) and little savings (the author says it almost all went to paying off the mortgage) is a little stressful, to say the least. In this situation having a big pile of cash and a mortgage would be preferable.
- eevee 11y ago
  I do also have some pre-existing savings; I just don't want to use them if at all possible (and have to start all over, sob), so I've been deliberately pretending they're unavailable.
  - kctess5 11y ago
    I understand what you're saying, but a technical note: you say "start all over," but I think that is untrue. You would be starting from the position of having no debt and owning your home outright (a positive net worth.) That's an excellent position to be in, in terms of trying to build savings. Congrats on the mortgage! :)

stinkytaco 11y ago

Mortgage is tax deductible if you are itemizing, which most people in the US do not. He's almost certainly not going to be itemizing if he doesn't have an income any more. Additionally, you probably can do better investing, but we don't know when he took out his mortgage. I got a mortgage in 2000 and the rates were much higher. A guaranteed 6.5% return on my investment? Not too bad. Refinancing can be expensive, and depending on what remains on the mortgage it may not be worth it. So really, it's almost impossible to speculate on whether paying of the mortgage was a good idea until we know more of the details. I admit I would be inclined to pay it off just for the certainty and the immediate lowering of expenses. Investing can take time to return, possibly more time than he has.

ryandrake 11y ago

You need to account for risk in your calculation, since investing in stocks or bonds is risky, but paying off a 4% mortgage gets you a risk-free 4%. Show me any other risk free investment out there that's that high.