Why Pay Off Home Instead of Invest?
Dave explains that the biggest factor as to why you should pay off the home, rather than invest in 12% annual mutual funds, is risk.
QUESTION: Why should a listener pay off his home if he can put the money in a 12% annual increase mutual fund?
ANSWER: With this plan you’re not considering the taxes that you pay on the investment, which will bring your investment down to about 9%. You’re also leaving out risk. An investor who fails to factor risk into the equation is naive. A borrowed home adds substantial risk to your portfolio versus a paid-for home. Remember, the borrower is slave to the lender.