Why bet the house?
There was a day in the not too distant past, when home mortgages were uncommon. Go back a little further and they were non-existent.
As markets rise and fall (because that’s what markets do), the series of events that unfolds during the fall, to the person indebted is far more traumatic than the one who has little or no debt.
I am not advocating going back to no mortgages or not believing in taking a risk, because I love riding in rough water…as long as I can get back home again. Wealth creation is quantified by the amount of risk. Taking out a 15 year loan and then working extra hard to pay it off…now that makes sense.
I know a lot of people that have paid their mortgages off, including myself, and this recession was not as tumultuous of an event to those people…I’ve never seen anyone go bankrupt or into foreclosure that was debt free.
It’s okay to take on debt, just have a crystal clear plan on how you are going to pay it off…and then do pay it off. Walking away from obligations, filing bankruptcy; honorable it is not.
I have been in many homes and the best ones that I have seen are the ones that are paid off. You sleep better at night too.
