Thumb of Michigan | KnowAFarmer - 9/9/2015 12:12
As far as investing instead of paying off a house early, Dave asks, "If you had a paid for house, would you mortgage it to get money to buy mutual funds?"
Lots of "it all depends" on that one. If I could make the numbers work by borrowing some $ from a liability (the house) to buy an asset (mutual funds) I think I'd for sure take a second look at doing so.
There are a few other ways to backstop debt beside mutual funds, but the concept is the same. Does it have some risk? Well, yep it does. Not nearly as much as dumping all your dough into a liability though. In my mind anyway.
Some compare that thinking to a reverse mortgage. Those that do so don't understand how a reverse mortgage works, though.
Much of this comes right down to 2 things. Group one includes those are those that are comfortable with good debt and are willing to use it. They don't necessarily have being debt free as a goal, at least not one of their top goals. Group 2 includes those those who can't stand debt, only use it sparingly when theres no other option, and have being debt free as their number 1 goal. The second group usually can't figure out why the first group is different than them, and tend to consider them dolts or worse. Thats OK, everyone has an opinion. I think the biggest mistake those in group 2 make is that they think those in group one all are saddled with consumer debt or otherwise unproductive debt. Certainly not suggesting that a lot of citizens are saddled with a terrible debt problem, Dave Ramsey would probably help those folks. Its a prevalent issue. Its also a huge mistake on group 2's part to lump everyone into that category.
Edited by pat-michigan 9/9/2015 13:01
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Dave Ramsey coarse
