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Donkbaca:
the average dividend yield for S&P stocks is about 2%, so you would benefit from the dividend, plus any appreciation in the stock when you sell.  Lets say I bought 100 bucks of S&P stocks ten years ago, I would get 2 bucks in dividends per year.  That's 20 bucks.  Even if the stock is down 15%, I have made 5% on my investment, that is without re-investing the stock.  ... it makes a difference, especially when you consider that an investment in say, something like gold or another commodity pays no dividends and is subject to pure speculation, plus transaction costs; you can frequently find index etfs that trade commission free.  Savings accounts now go for what, 1%?  If inflation is running at about 2.5% so you are losing money keeping it in the bank

ChadTower:

Then you pay a chunky capital gains tax that you would not be paying when selling the primary residence you could have paid off instead.

Money can be made either way and it's all up to an individual's comfort levels with any given approach.  You could also pass on securities, not pay off your mortgage early, and buy investment real estate instead.  Or use it as capital to start your own business or provide capital to someone else to start a business.  There are tons of ways to invest and trying to compare them with hypotheticals could last forever without actually proving anything.

Donkbaca:
capital gains is 15% off of profit. You are assuming that you are selling your house for more than what you bought it for, hard to believe, especially considering the enourmous cost and time to sell.

I agree with you on the hypotheticals, I am just saying, paying off your mortgage is probably just about the worst investment you could make.  There is not much upside, the downside is that you have now spent a boatload of money on an asset that is not appreciating, and in many cases, is depreciating in value.

javeryh:
So putting it all on black at the casino isn't a sound investment strategy?

I honestly don't know what I'm doing when it comes to this stuff but you people talking about not carrying a mortgage are either nuts or wealthy.  It's just not realistic - especially where I currently live.  I guess if I wanted to move to Middle of Nowhere, USA I could swing a very cheap house but there's just no way the average person can afford less than a 30 year mortgage.  I mean, the average person can't even keep themselves out of credit card debt never mind being fiscally responsible enough to quickly pay off a house. 

I've been in my house for 7 years and I just refinanced a second time so I'm back up to 30 years but the monthly payments are almost $1,000 less than where I started.  Sure I'll be paying more in interest long term but the extra $1,000 a month helps me and my family live a little more comfortably NOW.  I might refinance again if it made sense.  Once the kids are out of college I'll probably be able to pay down the mortgage much quicker but for now I think I'm doing OK.

Donkbaca:
number one rule in finance: its always better to use other people's money.  There is nothing wrong with using leverage.

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