We paid off our house early, and the stress levels have gone down considerably. I semi-retired by changing careers so that I could be home to take care of the kids, couldn’t do that if we still had a mortgage to pay off. We considered using the cash we had to pay off the mortgage to invest in the market, but the risk of lose was not worth it. Paying off a house is about risk mitigation. When you have a mortgage, or worse a margin account against your home, you are at risk of losing it. When it is paid off, your expenses are property taxes, which should be manageable.
The stock market has many unpredictable declines that can wipe you out if you are not careful and investing for the short term. There are plenty of people on TV showing how well they did, but most people can’t time the market and loose a significant amount of money during the downturns. The question to ask, can you afford to loose 50% of your investments and still have a house over your head? I wouldn’t want to try and find a rental in this market, there is nothing available in my town and many people are having to move 45 minutes away just to find an available rental. Warren Buffet has a famous quote, which I am going to butcher, but basically be fearful when people are enthusiastic about the market. When people are going all in to the stock market, it is usually the peak, so invest wisely.
The stock market has many unpredictable declines that can wipe you out if you are not careful and investing for the short term. There are plenty of people on TV showing how well they did, but most people can’t time the market and loose a significant amount of money during the downturns. The question to ask, can you afford to loose 50% of your investments and still have a house over your head? I wouldn’t want to try and find a rental in this market, there is nothing available in my town and many people are having to move 45 minutes away just to find an available rental. Warren Buffet has a famous quote, which I am going to butcher, but basically be fearful when people are enthusiastic about the market. When people are going all in to the stock market, it is usually the peak, so invest wisely.