[quote=cvmom]Good point, we did do mortgages on our first few homes. Then moved around the country with work, selling one and moving up to another. Only recently did we feel comfortable enough with our financial cushion to pay off the mortgage completely.
Judicial use of minimal mortgage debt, as several others have mentioned. But no car debt, student debt, credit card debt, etc…[/quote]
I agree unsecured debt is generally bad. I don’t have student loan debt or credit card debt either either. But I do have car debt. I can’t resist the low interest rate, especially when I can use that cash to buy investment properties that return 6%+ cash on cash.
My main point is, majority of the people who got to their financial goal gotten there with leverage. Most used mortgages as their main source of leverage. Mortgage is also the only source of leverage that allow you to only put 20% (or less) skin in the game. If I don’t leverage, in order for me to get to my $5M by 55 goal, I would need to save $151k/year and start at 22 years old. I would say that’s nearly impossible. Even if you extend that age to 65 years old, I would still need to save $116k/year for 43 years. That still seem impossible to me.
I have no problem with paying off your house once you’ve reached your nest egg goal. I too will probably do the same. But until then, if I pay of my house earlier, it would be that much harder for me to get to my nest egg goal. Especially when I’m not even at my peak earning years yet.
