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Now in college I realized that having a fixed attitude about debt is missing part of the financial picture.

Maybe, but having a paid off mortgage is worth more than I had at first realized. Scott Burns wrote an article about the advantages. It is like having a tax deferred asset that increases in value according to your location and provides tax free shelter services. Quite a nice investment indeed.


Those are points in favor of home ownership regardless of whether you carry a mortgage. I also disagree with an earlier post suggesting that paying off the mortgage means you'll always have a roof over your head. All it really means is one way of losing your house has been eliminated, and even then it may only be temporary if financial disaster strikes and you're unprepared for it.

Having said that, I too plan to pay off my mortgage as soon as I possibly can. The reason we're doing this is because I know in my gut that paying down the mortgage instead of saving or investing holds down our consumption levels more than an equal contribution to other savings or investments would. Assets that you can easily value and can easily liquidate are just harder to leave untouched than home equity is. "Doing without" is more difficult when you have liquid or near-liquid assets screaming to be spent (Personally, I hate spending money, but my wife is a little less averse to the idea).

A household disciplined enough to save, to "do without" and to risk temporary market losses year after year is almost certainly better off investing for retirement rather than paying off a mortgage at today's interest rates (not to mention the home mortgage tax deduction). But I figure a household without that discipline is better off paying down the mortgage than having no savings vehicle at all.

I look forward to the day when we no longer have the option to pay down the mortgage as our primary savings vehicle. I figure by then our frugal habits will be so ingrained that we couldn't change if we tried.

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When Life Gives You Lemons
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