The Motley Fool Discussion Boards

Previous Page

Investing Books / The Millionaire Mind

URL:  https://boards.fool.com/1-they-carry-a-mortgage-on-their-homes-even-14449816.aspx

Subject:  Re: Ordinary People...Extraordinary Wealth Date:  2/28/2001  11:37 PM
Author:  lazyfrog Number:  19 of 220

1. They carry a mortgage on their homes even though they can afford to pay it off.
Keep your money working for you. Every dollar paid to the bank is one less that you have to invest.
Your house will grow in value no matter what.

I have a real problem with #1.


I just saw the show.

What's funny is, #1 was the only one I wholeheartedly agreed with. It may SEEM to make more sense to pay off your mortgage, but for most people it isn't. In your own example, it's a question of what you can do with that $83.

The way to look at is this. Your mortgage carries an interest rate of let's say 8%. If you put that $83 dollars toward you mortgage, essentially what you'd be doing is getting a return of 8% on your $83. Or you might choose to put that $83 in the market. You're probably going to make more than 8%. Possibly more like 10% to 15%.

Trust me the math works. (I've run spreadsheets on it myself).

But what I want to know is, what's up with Edelman's #5? Don't measure yourself against the market indexes? Well how that heck are you supposed to know if your money is in the best place it can be? The only way to do that is to measure yourself against some benchmark.

Edelman's "findings" are nice but I don't think they are very useful for the most part.
Copyright 1996-2022 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us