The best way to give up your ‘day job’ is to watch my Live Show this Thursday @ 8pm CST (9pm EST / 6pm PST) at http://ajcfeed.com ….
Recently, I wrote a post that (I hope!) exploded the popular view peddled by the Ramsey/Orman/Frugal crowd: that you should pay down all debt, including your home loan. You will need to read that post to see why it’s such a bad idea.
As expected, the post generated a lot of reader comment, much centered on the theme that owning your own home outright is (a) better than doing nothing (true, but eating pizza every day is also – marginally – better than eating nothing) and (b) a great emotional ‘cushion’.
Money Monk summarized it perhaps most succinctly:
Either way is definitely not OK:
Sure, either way is better than NO way …
…. but, one way is clearly better than the other way!
The ‘catch 22′ here is that the very thing that these people THINK will make them secure (e.g. paying off their home loan) actually makes them much less so, in the long-term.
That doesn’t mean that you shouldn’t make emotionally-self-satisfying decisions … for example, owning your own home is not always a smart FINANCIAL decision, yet it’s one that I actively encourage people to make for exactly the EMOTIONAL reasons that Money Monk (and others) stated:
But, that does NOT mean that you should own the property outright …
… there is far more REAL SECURITY in knowing that you will retire with enough to live off than there is in the FALSE SECURITY of having ‘just’ $1 Mill net worth in, say, 20 years (usually wrapped up in your home ownership):
But, I’m not out to change EVERYBODY’s view … only SOME people’s: those who want to become Rich(er) Quick(er)