[ColdNoMore]

Originally Posted by BK001

Here's an interesting perspective on mortgages:

Why you shouldn’t pay off your mortgage sooner: a loan officer’s perspective.

Good article.

Originally Posted by BK001

I too agree with a "debt-free" lifestyle, and, to a large extent, is how I've lived my life as well. But just another point of view to consider.

While minimizing revolving credit (ie: high interest credit cards) is almost always a good idea, someone would have to be pretty dumb to avoid all debt....while ignoring (or not understanding) 'opportunity costs.'

If I can use someone else's money at a low interest rate (1% auto loans/3% home loans/etc.), while my own investments are compounding at three to five times the amount of the loan interest...it would be dumb not to do so.

Given that most large corporations often borrow money, even when they have the cash on hand...should be a clue.

Opportunity Costs(poke here)

The cost of paying cash is the cash itself. The opportunity cost of paying cash is the interest the cash could have earned, had you kept it, that you no longer get to earn because you don’t have the cash.

We humans have a funny way of looking at loss. If you had something and then lost it, we consider that a loss. But if you had the potential to get something, and then lost that potential, that type of loss is a bit harder to wrap our brain around.

The interest you pay when you finance is money you had that’s being taken away. That’s why it’s an apparent loss.

What’s harder to see is what your cash could have done for you, had you kept it.

Then again, there are those who like to keep their cash under their mattresses...and believe they are financial genius' also.