paying off mortgage

[s.matthewmeyer]

I was wondering about paying off my mortgage or should I keep my money in a Bond Fund. I would like to be more debt free and since I am self employed the economy and all would I come out better if I didn't have the dept. My interest rate is in the high 4 percent on the mortgage. I have a 10 year mortgage and pay an extra $100 dollars a month. This will pay off the mortgage in 6 years.

[EEinNJ]

Paying off your mortgage is a can't-miss investment. Bond funds are headed for a fall and aren't yielding much right now anyway.

[jIM_Ohio]

Paying off your mortgage is a can't-miss investment. Bond funds are headed for a fall and aren't yielding much right now anyway.

Always beware of people which state an investment is can't miss.

Paying off a mortgage gives liquidity to cash flow at the expense of tying up current money (past earnings) into an illiquid asset. It can lower risk profile or raise a person's risk profile depending on the situation.


In case of OP, I think it lowers his risk profile- he has lower cash flow needs (and being self employed less expense is a great thing). His money is tied up into an asset which is not liquid (his house)... if he needs money to expand his business or needs money for another reason, its possible he will see the result of this risk. If he builds savings back up (with new, higher free cash flow) he can make that liquidity risk (of the house) go away.