A clear reminder that strategically investing before aggressively paying down a low-rate mortgage can maximize wealth and create real-time lifestyle flexibility
Thanks! I agree wholeheartedly. Lifestyle flexibility is under-appreciated. Whether it’s to go on a once-in-a-lifetime adventure, take a work break or maybe just to cover a big unexpected cost, having cash you can access makes it possible.
James, excellent post, as usual. I decided to sell my home, grab the equity, invest and now I’m renting. My house sold at around 1 million with a small mortgage. Now I have no worries or sleepless nights about spending money on lawn care, landscaping, home repairs, etc. I can now go on vacation and close the apartment door and not care one bit about storms, break ins, etc. Also, when I pass my kids won;’t have the hassle of selling the house. Time will tell if the investment piece works out but I believe the market should out perform the value of the house.
We go to various Caribbean locations and when my wife lets me, I head out on my. Motorcycle across the Us. Then a bunch of time with the grandkids. The move wasn’t a tough call. Selling my yard tools and accumulated tools over the past 40 years was very liberating. Now instead of yard work I can enjoy the gym without the need to rush back home and “ tend” to something. The cost of rent is about the same as a moderately sized mortgage but no upfront cost to obtain a mortgage. And then the only other advantage is if we want to pack up and go somewhere else - I think that might be easier than trying to sell a house again. I think this plan will work out. Peace. Keep posting!!
Thanks for the story John. That's very cool. I love that you have built wealth and then figured how to build a life that designs for fewer worries and sleepless nights. It goes against the grain to go from home ownership to an apartment. But it sounds like makes a lot of sense in your situation and likely to pay off financially!
Where’s the next vacation you plan to take with that freedom?
I paid off my mortgage before really getting into investing. And I have done quite well with investing since. Psychologically, having a paid off mortgage made it easier to take calculated risks with stocks. Also, if I lose my job, I don’t have to worry about paying my mortgage.
I like that perspective. It’s been my experience that A.) learning how to take calculated risks and B.) learning how to be comfortable with those risks is an underappreciated skill in wealth building. And it absolutely requires a fall black pan and some financial buffer to be able to take risks well. If that's what you're using your house for, that's a really cool way to think about.
And for the record, sometimes I do wish that I had kept the mortgage as the interest rate was under 3% when I paid it off! Regardless, I agree with you that having a financial buffer of some sort is what makes it possible to take the sorts of calculated investment risks that can really pay off.
James, this is such a refreshing and necessary take. In a world that screams 'pay off your debt at all costs,' people often forget about the 'cost' of losing liquidity.
I love how you lined out the steps to build wealth without becoming 'house rich and cash poor.' Keeping those optionalities open while the math works in your favor is the ultimate stress-reducer. A clear roadmap on how to actually enjoy life today while securing tomorrow
A clear reminder that strategically investing before aggressively paying down a low-rate mortgage can maximize wealth and create real-time lifestyle flexibility
Thanks! I agree wholeheartedly. Lifestyle flexibility is under-appreciated. Whether it’s to go on a once-in-a-lifetime adventure, take a work break or maybe just to cover a big unexpected cost, having cash you can access makes it possible.
James, excellent post, as usual. I decided to sell my home, grab the equity, invest and now I’m renting. My house sold at around 1 million with a small mortgage. Now I have no worries or sleepless nights about spending money on lawn care, landscaping, home repairs, etc. I can now go on vacation and close the apartment door and not care one bit about storms, break ins, etc. Also, when I pass my kids won;’t have the hassle of selling the house. Time will tell if the investment piece works out but I believe the market should out perform the value of the house.
We go to various Caribbean locations and when my wife lets me, I head out on my. Motorcycle across the Us. Then a bunch of time with the grandkids. The move wasn’t a tough call. Selling my yard tools and accumulated tools over the past 40 years was very liberating. Now instead of yard work I can enjoy the gym without the need to rush back home and “ tend” to something. The cost of rent is about the same as a moderately sized mortgage but no upfront cost to obtain a mortgage. And then the only other advantage is if we want to pack up and go somewhere else - I think that might be easier than trying to sell a house again. I think this plan will work out. Peace. Keep posting!!
Thanks for the story John. That's very cool. I love that you have built wealth and then figured how to build a life that designs for fewer worries and sleepless nights. It goes against the grain to go from home ownership to an apartment. But it sounds like makes a lot of sense in your situation and likely to pay off financially!
Where’s the next vacation you plan to take with that freedom?
I paid off my mortgage before really getting into investing. And I have done quite well with investing since. Psychologically, having a paid off mortgage made it easier to take calculated risks with stocks. Also, if I lose my job, I don’t have to worry about paying my mortgage.
I like that perspective. It’s been my experience that A.) learning how to take calculated risks and B.) learning how to be comfortable with those risks is an underappreciated skill in wealth building. And it absolutely requires a fall black pan and some financial buffer to be able to take risks well. If that's what you're using your house for, that's a really cool way to think about.
And for the record, sometimes I do wish that I had kept the mortgage as the interest rate was under 3% when I paid it off! Regardless, I agree with you that having a financial buffer of some sort is what makes it possible to take the sorts of calculated investment risks that can really pay off.
James, this is such a refreshing and necessary take. In a world that screams 'pay off your debt at all costs,' people often forget about the 'cost' of losing liquidity.
I love how you lined out the steps to build wealth without becoming 'house rich and cash poor.' Keeping those optionalities open while the math works in your favor is the ultimate stress-reducer. A clear roadmap on how to actually enjoy life today while securing tomorrow
100%. The farther I get in my financial journey, the more optionality matters to me. It absolutely reduces stress.
I think people forget that you stop stressing out about mortgage debt if your liquid assets are many multiples larger!
So true and I couldn't agree more. Anything that reduces stress, keeps options available and increases wealth is a win.