Quote:
Originally Posted by Joe C.
I don’t like having a mortgage ..... especially in this economic downturn, so I paid off my mortgage this month. This way, if my wife’s pension (from a state up north) goes bad, at least we will have a place that the bank can’t foreclose on. Same for my annuities .... if they go bad, we still will be ok.
Better safe than sorry.
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This attitude is one of retirement is for the protection of wealth, not the maximization of wealth, is very healthy. The probability for state pension bankruptcies and other bankruptcies is not zero, and not a fixed probability. That's why there are re-insurance companies, to insure insurance companies. That is also the basis of the behavioral bias "recency bias"
Most if not all accidents or mistakes come from the assumption that all possible outcomes are assumed to be taken into account. Then after the accident the harmed usually says something to the effect that "I didn't see that coming". Same can be said for personal financial outcomes. Free and clear eliminates any risk of being called away for reasons beyond your control, or loss of assets/income backing the payment.
Ask pete carroll with the play which lost the superbowl to the patriots. Not one play has a probability of 100% guaranteed outcome, not even a kneel down.
Our 25 year mortgage, taken in 2014, will be paid off this year (2021), after 6-7 years, for this reason.
So Joe picked blue as well. . .