I’m Debt Free

[bmjohnson35]

Congrats!  Feels great, doesn't it!


We sold our home a few years back to take advantage of the crazy rise in real estate prices and become debt free.  Upon closing, we had an opportunity to take advantage of a low cost rental.  We searched around for a lower cost home that needed a little TLC while we were renting and paid cash.  The equity we were able to get out of our previous home largely paid for our present home.  This decision also provided us the opportunity to save and invest 50% of our income every since we sold the previous home. 

I understand the argument for keeping a low interest mortgage, but being debt free provides a sense of freedom  before you reach full FI and it does free up cash for more investing.   

B&M

   

[PhilB]

Congratulations! I am a firm believer in celebrating every step along the way, so I hope you enjoy your achievement!

People will say that paying off your mortgage instead of investing is more of an "emotional" decision than a "rational" one, but I don't think that's necessarily a healthy attitude. Emotional wellbeing is often seriously undervalued in Western culture, to our detriment. I think you are wise to maintain a balance between your mind and your heart.

+1
Being mortgage free results in a significant (if irrational) increase in happiness for many people and that isn't something that should be ignored.  Yes, on average, it delays FIRE - but so does eating anything more expensive than rice and beans, taking a holiday or having leisure time rather than a second job. 
OP has done something that involved saving lots of money which is great and should be celebrated.  OP has also done something that makes them happy and I would like to join with most of the other posters in being very happy for them.  Congratulations!

[Rosy]

1. CONGRATULATIONS to gfish - it's awesome to own your home clear and free!!! Well done!

2. @bmjohnson35 - wow, I love the opportunities you took advantage of once you were free of your mortgage. Great story!

3.@efree  - you are perfectly welcome to comment:).
I think it is vitally important to know exactly what consequences your choices have, especially when we are talking about something so important as your own home.
This may be a smart choice or a math vs emotion choice. It doesn't matter, we are all free to make our own choices, but I for one would like to know exactly what the consequences will/could be.
Before boarder42 talked about why not paying off your mortgage was the better choice I never knew that mathematically speaking this is generally true.

 

[golfreak12]

@goalphish2002 I'm so sorry about what has happened to your celebration thread. What you have achieved is amazing and worthy of being celebrated. Unfortunately that is not going to happen in this thread. It seems to happen a lot on this forum: someone starts an interesting thread, but it goes to shit quickly and there's no way to get it back on track. I wish there was a way to block posters with the emotional IQ of a kindergartner, but there isn't.

Just know that most of us are happy for you.

I guess I'll be another poster with the emotional IQ of a kindergartner, because I think it's great efree is carrying the torch of Boarder (RIP), and doing a service to forum newcomers. I joined about a year ago, and thanks to Boarder and others dishing out facepunches on mortgage payoff celebration threads, I learned that not only does paying off your mortgage early often delay FIRE, it can also be much riskier than having that money in investment accounts should an emergency arise.

It's just strange to see other mortgage payoff proponents circle the wagons so viciously and try to soothe the OP's feelings, which given in the original post the OP admitted it was a divisive topic and that they hadn't followed the order of investing, I doubt the OP was shocked and crushed by efree's response. The defenders lashed out like it was an attack on their choices rather than the OP's.

That said, I'll celebrate the OP's being debt-free and happy, and I'll celebrate efree's honest response.

Because this is a celebratory thread. The OP is debt-free.
If this thread was "I made the wisest decision paying my my mortgage" then people have every right to correct that view.
As someone said, they are many threads out there letting us know that paying off the mortgage is not the best possible decision. You don't need to jump in every mortgage-free celebratory thread and derail it.

[AnxietyFly]

"WE'RE DEDT FREE"... HAHAHA... I LOVE IT, I LOVE IT, I LOVE IT. You guys are weird!

[efree]

@goalphish2002 I'm so sorry about what has happened to your celebration thread. What you have achieved is amazing and worthy of being celebrated. Unfortunately that is not going to happen in this thread. It seems to happen a lot on this forum: someone starts an interesting thread, but it goes to shit quickly and there's no way to get it back on track. I wish there was a way to block posters with the emotional IQ of a kindergartner, but there isn't.

Just know that most of us are happy for you.

I guess I'll be another poster with the emotional IQ of a kindergartner, because I think it's great efree is carrying the torch of Boarder (RIP), and doing a service to forum newcomers. I joined about a year ago, and thanks to Boarder and others dishing out facepunches on mortgage payoff celebration threads, I learned that not only does paying off your mortgage early often delay FIRE, it can also be much riskier than having that money in investment accounts should an emergency arise.

It's just strange to see other mortgage payoff proponents circle the wagons so viciously and try to soothe the OP's feelings, which given in the original post the OP admitted it was a divisive topic and that they hadn't followed the order of investing, I doubt the OP was shocked and crushed by efree's response. The defenders lashed out like it was an attack on their choices rather than the OP's.

That said, I'll celebrate the OP's being debt-free and happy, and I'll celebrate efree's honest response.

Because this is a celebratory thread. The OP is debt-free.
If this thread was "I made the wisest decision paying my my mortgage" then people have every right to correct that view.
As someone said, they are many threads out there letting us know that paying off the mortgage is not the best possible decision. You don't need to jump in every mortgage-free celebratory thread and derail it.

Yes, and the OP didn't need to create this thread but he/she did it anyway. Are we allowed to do only the things we need to do? This forum wouldn't exist then.

And by the way, I was not the one who derailed this thread. My post was pretty short and I was careful to keep it respectful. This thread was derailed by those who started attacking me (which is against forum rules, by the way).

And I just want to say that I agree with what Rosy said. If a person has done the math and knows that prepaying the mortgage will likely delay their FIRE one year, two years, or more, and STILL chooses to do it then fine, it's an informed decision and I've got nothing against it. The problem is that very few people have done this even if they say they are "aware" that it's a "mathematically suboptimal" decision. I have trouble understanding how people would say "I am finally free of my mortgage and this will delay my FIRE two years. Let's celebrate it!" on a forum about early retirement.

[Just Joe]

@GoalPhish2020 - I want to be just like you when I grow up. (Debt free).

I know all the reasons not to pay off a mortgage according to Boarder42 gospel but frankly if I get laid off somehow, I want to know that the roof over my head will remain over my head. If a bad economy has killed my employer, its likely killed my investments too over the short term (two or several years).

Better IMHO to be able to feed ourselves with a minimum wage job (or 2) or a big garden or odd-jobs and keep the roof over our heads. Lower cost of living b/c everything but insurance and taxes are paid for, and smart or not - we could do without insurance for a while in a financial emergency. And we could rent out rooms too.

[EngagedToFIRE]

@goalphish2002 I'm so sorry about what has happened to your celebration thread. What you have achieved is amazing and worthy of being celebrated. Unfortunately that is not going to happen in this thread. It seems to happen a lot on this forum: someone starts an interesting thread, but it goes to shit quickly and there's no way to get it back on track. I wish there was a way to block posters with the emotional IQ of a kindergartner, but there isn't.

Just know that most of us are happy for you.

FYI.  In your account settings, there is a way to add users you don't like to your ignore list.  It works wonderfully.

[EngagedToFIRE]

@goalphish2002 I'm so sorry about what has happened to your celebration thread. What you have achieved is amazing and worthy of being celebrated. Unfortunately that is not going to happen in this thread. It seems to happen a lot on this forum: someone starts an interesting thread, but it goes to shit quickly and there's no way to get it back on track. I wish there was a way to block posters with the emotional IQ of a kindergartner, but there isn't.

Just know that most of us are happy for you.

I guess I'll be another poster with the emotional IQ of a kindergartner, because I think it's great efree is carrying the torch of Boarder (RIP), and doing a service to forum newcomers. I joined about a year ago, and thanks to Boarder and others dishing out facepunches on mortgage payoff celebration threads, I learned that not only does paying off your mortgage early often delay FIRE, it can also be much riskier than having that money in investment accounts should an emergency arise.

It's just strange to see other mortgage payoff proponents circle the wagons so viciously and try to soothe the OP's feelings, which given in the original post the OP admitted it was a divisive topic and that they hadn't followed the order of investing, I doubt the OP was shocked and crushed by efree's response. The defenders lashed out like it was an attack on their choices rather than the OP's.

That said, I'll celebrate the OP's being debt-free and happy, and I'll celebrate efree's honest response.

Because this is a celebratory thread. The OP is debt-free.
If this thread was "I made the wisest decision paying my my mortgage" then people have every right to correct that view.
As someone said, they are many threads out there letting us know that paying off the mortgage is not the best possible decision. You don't need to jump in every mortgage-free celebratory thread and derail it.

Yes, and the OP didn't need to create this thread but he/she did it anyway. Are we allowed to do only the things we need to do? This forum wouldn't exist then.

And by the way, I was not the one who derailed this thread. My post was pretty short and I was careful to keep it respectful. This thread was derailed by those who started attacking me (which is against forum rules, by the way).

And I just want to say that I agree with what Rosy said. If a person has done the math and knows that prepaying the mortgage will likely delay their FIRE one year, two years, or more, and STILL chooses to do it then fine, it's an informed decision and I've got nothing against it. The problem is that very few people have done this even if they say they are "aware" that it's a "mathematically suboptimal" decision. I have trouble understanding how people would say "I am finally free of my mortgage and this will delay my FIRE two years. Let's celebrate it!" on a forum about early retirement.

OP was celebrating being debt free.  If you are going to quote forum rules, you should be aware that you clearly broke the first rule and possibly rule #4 and that's why you got the responses that you did.

[EngagedToFIRE]

@GoalPhish2020 - I want to be just like you when I grow up. (Debt free).

I know all the reasons not to pay off a mortgage according to Boarder42 gospel but frankly if I get laid off somehow, I want to know that the roof over my head will remain over my head. If a bad economy has killed my employer, its likely killed my investments too over the short term (two or several years).

Better IMHO to be able to feed ourselves with a minimum wage job (or 2) or a big garden or odd-jobs and keep the roof over our heads. Lower cost of living b/c everything but insurance and taxes are paid for, and smart or not - we could do without insurance for a while in a financial emergency. And we could rent out rooms too.

Correct.  I'm generally a fan of paying off mortgages (but not making extra payments, only as a lump sum).  I use the same line of thinking.  That with no mortgage and no debt, cashflow radically changes.  Cashflow is king.  A massive stock market decline could mean going back to work for a few years, too.  Lots of things could mean going back to work.  But what's nice is, as you said, we could work absolutely anywhere and live comfortably.  We could mow yards or flip burgers and still have our roof over our head, kids in good schools, and relatively no stress knowing bills will always be paid.  Whether it's always the best financial decision compared to index funds?  Usually not.  But that really doesn't matter, as nobody here can see the future.  You are WAY ahead by being debt free.  Period.  No reason for others to be negative about it.

[efree]

OP was celebrating being debt free.  If you are going to quote forum rules, you should be aware that you clearly broke the first rule and possibly rule #4 and that's why you got the responses that you did.

I'm not trying to be a jerk, it's just kind of unavoidable when people are celebrating something and you say - hey, maybe it shouldn't be celebrated. But what's the alternative? Not to talk about it at all? I don't think so (for reasons I already mentioned upthread).

[Emerald]

Congrats to you!!!  It is a huge accomplishment!

I became debt free in April. My living expenses are now so low that my FI date has moved up by several years.  At the same time, I'm pretty much recession proof as I can work a minimum wage job and still pay the bills.  It.is.awesome.

[LoanShark]

Congrats! I’ve always felt that the delta between a mortgage and the opportunity cost of investing in the market was worth the peace of mind.

[TomTX]

I thought this thread would be about someone getting rid of credit card debt after discovering MMM. So you prepaid your mortgage instead of investing that money in index funds? I don't think that should be celebrated, sorry.

Well this is a downer. Too bad you couldn't have simply not responded.

I was going to ignore the controversial comments until you posted. Now I'm not. Congrats!

Why are "pay off the mortgage" people like you so sensitive? This isn't even the moderator enforced "safe space" y'all set up as it's own thread for mortgage payoff (Only! Discussion Keep OUT!) or the dedicated "celebrations thread" where one would expect just congratulations rather than discussion.

This is a general, new thread in "face punch central" of a discussion forum focused on efficiently reaching FIRE.

Paying off a low-interest, fixed mortgage is often a sub-optimal strategy for reaching FIRE in the most efficient way.

Are you going to complain next that someone questioned you on your new, leased F350 commuter vehicle you will be driving solo 50 miles a day each way?

Perhaps we should congratulate you on your "Dave Ramsey Approved" high-fee, high cost financial "adviser" because you're investing.

[EngagedToFIRE]

OP was celebrating being debt free.  If you are going to quote forum rules, you should be aware that you clearly broke the first rule and possibly rule #4 and that's why you got the responses that you did.

I'm not trying to be a jerk, it's just kind of unavoidable when people are celebrating something and you say - hey, maybe it shouldn't be celebrated. But what's the alternative? Not to talk about it at all? I don't think so (for reasons I already mentioned upthread).

Someone has a "I'm out of debt! YAY!!!" post.... and your comment, which is the first comment, is "this shouldn't be celebrated" and you don't view that as maybe a little "jerk-ish"?  Paid off mortgage and being out of debt is very much Mustachian.  Why wouldn't we celebrate it?  People can seek financial independence in many different ways, this is the way that was best for OP.

[EngagedToFIRE]

I thought this thread would be about someone getting rid of credit card debt after discovering MMM. So you prepaid your mortgage instead of investing that money in index funds? I don't think that should be celebrated, sorry.

Well this is a downer. Too bad you couldn't have simply not responded.

I was going to ignore the controversial comments until you posted. Now I'm not. Congrats!

Why are "pay off the mortgage" people like you so sensitive? This isn't even the moderator enforced "safe space" y'all set up as it's own thread for mortgage payoff (Only! Discussion Keep OUT!) or the dedicated "celebrations thread" where one would expect just congratulations rather than discussion.

This is a general, new thread in "face punch central" of a discussion forum focused on efficiently reaching FIRE.

Paying off a low-interest, fixed mortgage is often a sub-optimal strategy for reaching FIRE in the most efficient way.

Are you going to complain next that someone questioned you on your new, leased F350 commuter vehicle you will be driving solo 50 miles a day each way?

Perhaps we should congratulate you on your "Dave Ramsey Approved" high-fee, high cost financial "adviser" because you're investing.

Can you show me where MMM has claimed that a paid off mortgage and being debt free is face punch worthy?

[EngagedToFIRE]

Congrats! I’ve always felt that the delta between a mortgage and the opportunity cost of investing in the market was worth the peace of mind.

Agreed!  I don't think anyone paying off a mortgage around here is unaware that there might be some missed opportunity by paying off their mortgage instead of investing.  The people paying off mortgages have valued the peace of mind accordingly and felt it was worth it.  To reiterate to a couple other posters here, there is simply no correct answer.  Paying off a mortgage is not stupid.  Not paying off a mortgage is also not stupid.  There are 2 right answers and it depends on the person and their circumstances.  It doesn't always need to turn in to an argument from smug DPOYM folks, which might be why the forum decided on a "safe space" for it.  Because nobody needs or wants these nasty, smug posts clouding up positive threads.

[ReadySetMillionaire]

Congrats! I’ve always felt that the delta between a mortgage and the opportunity cost of investing in the market was worth the peace of mind.

Agreed!  I don't think anyone paying off a mortgage around here is unaware that there might be some missed opportunity by paying off their mortgage instead of investing.  The people paying off mortgages have valued the peace of mind accordingly and felt it was worth it.  To reiterate to a couple other posters here, there is simply no correct answer.  Paying off a mortgage is not stupid.  Not paying off a mortgage is also not stupid.  There are 2 right answers and it depends on the person and their circumstances.  It doesn't always need to turn in to an argument from smug DPOYM folks, which might be why the forum decided on a "safe space" for it.  Because nobody needs or wants these nasty, smug posts clouding up positive threads.

Exactly. Let's get back to the original post:

Let’s celebrate, not hate!  I realize that paying off a mortgage early is a divisive topic, but I felt it was necessary for my wife and me.  We paid off our vehicles, student loans, any remaining medical bills, and have no credit card debt.

First, OP clearly realizes the mortgage payoff issue. He's not a fool. He obviously made a personal decision based on his own mental and emotional wellbeing.

Second, OP did not just pay off his mortgage. He paid off vehicles, student loans, medical debt, and credit card debt.

If that is something that needs to be criticized on this forum, I'm in the wrong place.

[BlueHouse]

I'm not trying to be a jerk, it's just kind of unavoidable when people are celebrating something and you say - hey, maybe it shouldn't be celebrated. But what's the alternative? Not to talk about it at all? I don't think so (for reasons I already mentioned upthread).

Random poster:  "hey, I just lost 10 pounds"
Jerk:  "you're still fat, come back when you're at your optimal weight and I'll congratulate you"

[hoosier]

Congrats.  Feels great, doesn't it?  I paid mine off about 7 years ago.

I believe there are two balance sheets in life - financial and emotional.  Paying off you mortgage vs plowing money into investments didn't make a huge difference on the bottom line of my financial balance sheet, but it sure did on my emotional balance sheet.  Not owing anyone a dime for anything gives me an amazing sense of security that I value highly.

I haven't seen a lot of people saying "man, I really f'd up paying off my house and regret it" on here....or anywhere, really.

[dougules]

Congrats!  Don't listen to the haters. 

It really does surprise me sometimes the extent of how controversial paying off your mortgage is here.  It's almost as bad as bringing up politics. 

[I-Ranger]

Congrats! I’ve always felt that the delta between a mortgage and the opportunity cost of investing in the market was worth the peace of mind.

Agreed!  I don't think anyone paying off a mortgage around here is unaware that there might be some missed opportunity by paying off their mortgage instead of investing.  The people paying off mortgages have valued the peace of mind accordingly and felt it was worth it.  To reiterate to a couple other posters here, there is simply no correct answer.  Paying off a mortgage is not stupid.  Not paying off a mortgage is also not stupid.  There are 2 right answers and it depends on the person and their circumstances.  It doesn't always need to turn in to an argument from smug DPOYM folks, which might be why the forum decided on a "safe space" for it.  Because nobody needs or wants these nasty, smug posts clouding up positive threads.

Exactly. Let's get back to the original post:

Let’s celebrate, not hate!  I realize that paying off a mortgage early is a divisive topic, but I felt it was necessary for my wife and me.  We paid off our vehicles, student loans, any remaining medical bills, and have no credit card debt.

First, OP clearly realizes the mortgage payoff issue. He's not a fool. He obviously made a personal decision based on his own mental and emotional wellbeing.

Second, OP did not just pay off his mortgage. He paid off vehicles, student loans, medical debt, and credit card debt.

If that is something that needs to be criticized on this forum, I'm in the wrong place.

If suboptimal financial decisions aren't something that needs to be criticized on this forum, then I'm in the wrong place.

[ReadySetMillionaire]

If suboptimal financial decisions aren't something that needs to be criticized on this forum, then I'm in the wrong place.

Paying off student loans, vehicle debt, credit cards, medical debt, and a mortgage is "suboptimal."  What a time to be alive.

[I-Ranger]

If suboptimal financial decisions aren't something that needs to be criticized on this forum, then I'm in the wrong place.

Paying off student loans, vehicle debt, credit cards, medical debt, and a mortgage is "suboptimal."  What a time to be alive.

Indeed. I am thankful to the many sharp people on this forum who have dispelled the old myth that being "debt free" was the pinnacle of financial success.

[jps]

https://www.mrmoneymustache.com/2012/02/24/pay-down-the-mortgage-or-invest-more-a-winwin-question/

[I-Ranger]

https://www.mrmoneymustache.com/2012/02/24/pay-down-the-mortgage-or-invest-more-a-winwin-question/

MMM from that post: "To justify not paying off your mortgage, you have to demonstrate a genuine desire to get ahead through investment. That means having low living expenses (let’s say equal to or lower than mine), and a correspondingly high savings rate (50% or higher). At this point, I will grudgingly admit that you will probably do much better investing in Index funds rather than paying off your mortgage"

JLCollins in the comments: "However with rates at these exceptionally low levels, were I making the decision today, I’d keep the mortgage and leave the money invested in VTSAX for the higher long-term gains."

[ReadySetMillionaire]

Seriously, what don't you guys understand that personal finance is personal? That different persons can have different priorities? Is there simply one doctrinal law that we all must follow?

***

Is financial independence, indisputably, the highest priority? If you think so, why? I know plenty of friends who could give two shits about FI and they are incredibly happy with their lives. They save their 10% and they are happy to work to 60 just like their dads.

Is investing in index funds truly the correct decision (what about rental properties or active investing)? I have friends who don't want to bother with doing everything on their own, and happily pay a fee-only advisor to manage their money.  I have another friend who refuses to invest in the stock market and only buys rentals. Are they wrong?

Is never eating out truly a better long term decision than socializing? The other attorneys I know who enjoy their practices the most are the ones who are always at wing night, the bar association social events, golf outings, etc. These all cost money. Are they wasting it?

Is doing anything other than biking inarguably not correct? One of my friends makes $80,000 a year but drives an incredibly slick BMW. He loves the damn thing almost as much as I love my son (not that much, but you catch my drift). Is he wrong? If so, why? Why is his passion for cars incorrect?

***

People on here act as if there is a single correct answer to all of these questions -- as if MMM is the New Testament. You know how evangelicals cite the Bible to prove they are "right?" That's how hardcore "mustachians" sound when they fetish over FI, as if work is the worst thing in the world, and that we should all not spend anything on anything until we reach the virgin mountain of FI.

This is, of course, a bunch of hypocritical BS, because I have absolutely no doubt we all do things that aren't 100% "optimal." If you're eating anything other than rice and beans, you're being sub-optimal. If you subscribe to Netlfix and Hulu, you're being sub-optimal. If you take your family on a ten day trip to Europe, that will delay FI, and is sub-optimal. If you own a car, that's sub-optimal -- biking would be cheaper.

***

Of course, we all know ourselves. We know our mental and emotional well-being. Some of us can eat rice and lentils every day because it would make us go mad. Many of us go out with co-workers and friends to keep in touch. Many of us live in comfortable houses. Many of us drive reasonably nice cars (seems to me most on here own Toyotas, Hondas, or Suburus). Many of us pay a premium to live in districts with good local schools.

These are all personal decisions based on our own priorities. We find a balance. We are informed and we make deliberate decisions.

The mortgage payoff versus invest decision is just another one of those decisions. The pros and cons of doing so are well discussed on here, so I won't rehash them here. But to think that you are indisputably "right" solely because the hypothetical math on a spreadsheet says "you could theoretically have a higher net worth at [insert date]" is the height of narcissim. You are imposing YOUR beliefs and YOUR priorities on others, the same way someone could look at you and point out all the "sub-optimal" things you do.

***

What the OP in this thread did is not a per se incorrect decision, because these largely do not exist. Decisions are a reflection of our priorities. If someone prioritizes not having any debt versus hypothetical future returns, that is their right -- in much the same way it is my friend Paul's right to not care about FI, for my friend Ben to love his BMW, for my attorney colleagues to love spending hundreds a month at bar association events, etc.

Personal finances are personal. People have different priorities. There is no one correct answer. We are humans.

[haflander]

I'm slow clapping for the entire post ^ from RSM but the below is my favorite part.

I was getting some b42 vibes from this thread...I think RSM most clearly defined why I never cared much for b42. He always imposed his priorities onto others without any desire to think otherwise.

Who wants to worship a spreadsheet as if it's God? Why not turn yourself into an unfeeling robot while you're at it?

I'm 100% debt free and always want to do things in the most analytical optimal way.

However, a simple and happy life is the goal. 100% simplicity ≠ happiness. Same for vice versa. We all need to find our balance.

The mortgage payoff versus invest decision is just another one of those decisions. The pros and cons of doing so are well discussed on here, so I won't rehash them here. But to think that you are indisputably "right" solely because the hypothetical math on a spreadsheet says "you could theoretically have a higher net worth at [insert date]" is the height of narcissim. You are imposing YOUR beliefs and YOUR priorities on others, the same way someone could look at you and point out all the "sub-optimal" things you do.

[I-Ranger]

Seriously, what don't you guys understand that personal finance is personal? That different persons can have different priorities? Is there simply one doctrinal law that we all must follow?

***

Is financial independence, indisputably, the highest priority? If you think so, why? I know plenty of friends who could give two shits about FI and they are incredibly happy with their lives. They save their 10% and they are happy to work to 60 just like their dads.

Is investing in index funds truly the correct decision (what about rental properties or active investing)? I have friends who don't want to bother with doing everything on their own, and happily pay a fee-only advisor to manage their money.  I have another friend who refuses to invest in the stock market and only buys rentals. Are they wrong?

Is never eating out truly a better long term decision than socializing? The other attorneys I know who enjoy their practices the most are the ones who are always at wing night, the bar association social events, golf outings, etc. These all cost money. Are they wasting it?

Is doing anything other than biking inarguably not correct? One of my friends makes $80,000 a year but drives an incredibly slick BMW. He loves the damn thing almost as much as I love my son (not that much, but you catch my drift). Is he wrong? If so, why? Why is his passion for cars incorrect?

***

People on here act as if there is a single correct answer to all of these questions -- as if MMM is the New Testament. You know how evangelicals cite the Bible to prove they are "right?" That's how hardcore "mustachians" sound when they fetish over FI, as if work is the worst thing in the world, and that we should all not spend anything on anything until we reach the virgin mountain of FI.

This is, of course, a bunch of hypocritical BS, because I have absolutely no doubt we all do things that aren't 100% "optimal." If you're eating anything other than rice and beans, you're being sub-optimal. If you subscribe to Netlfix and Hulu, you're being sub-optimal. If you take your family on a ten day trip to Europe, that will delay FI, and is sub-optimal. If you own a car, that's sub-optimal -- biking would be cheaper.

***

Of course, we all know ourselves. We know our mental and emotional well-being. Some of us can eat rice and lentils every day because it would make us go mad. Many of us go out with co-workers and friends to keep in touch. Many of us live in comfortable houses. Many of us drive reasonably nice cars (seems to me most on here own Toyotas, Hondas, or Suburus). Many of us pay a premium to live in districts with good local schools.

These are all personal decisions based on our own priorities. We find a balance. We are informed and we make deliberate decisions.

The mortgage payoff versus invest decision is just another one of those decisions. The pros and cons of doing so are well discussed on here, so I won't rehash them here. But to think that you are indisputably "right" solely because the hypothetical math on a spreadsheet says "you could theoretically have a higher net worth at [insert date]" is the height of narcissim. You are imposing YOUR beliefs and YOUR priorities on others, the same way someone could look at you and point out all the "sub-optimal" things you do.

***

What the OP in this thread did is not a per se incorrect decision, because these largely do not exist. Decisions are a reflection of our priorities. If someone prioritizes not having any debt versus hypothetical future returns, that is their right -- in much the same way it is my friend Paul's right to not care about FI, for my friend Ben to love his BMW, for my attorney colleagues to love spending hundreds a month at bar association events, etc.

Personal finances are personal. People have different priorities. There is no one correct answer. We are humans.

Don't worry, no one is going to take away your right to extend your period of mandatory employment. You are free to make as many suboptimal decisions as you see fit.

Some of us like it and have personally benefited from posters pointing out paying off your mortgage is usually not the best strategy to reach FIRE faster. I'm sorry this causes you so much pain, but please don't impose your belief on us that this shouldn't be allowed. We are humans too.

And to me, the height of narcissism is thinking you are above criticism, but we agree to disagree.

[Lady Stash]

OP, congrats!!  This is such a huge milestone.  Enjoy the feeling & the new cash flow.

I paid my home off a year ago.  Life *feels* different knowing that I own my home free and clear, no matter what happens with the markets. 

Paying off a low-interest, fixed mortgage is often a sub-optimal strategy for reaching FIRE in the most efficient way.

You are right, odds are that you will do better investing $$ in the stock market rather than paying down your mortgage early.  You'll probably earn 7% in the stock market and may save only 3% paying off the mortgage. 

But consider this...
Odds are that you will lose money on your car insurance and your home insurance.  You are most likely to end up paying more than you ever get back (that's how the insurance company makes money after all).  So it's mathematically correct not to carry home owners or car insurance, by your reasoning.

What you aren't considering is the RISK.  I'm very willing to bet a large part of my retirement and investment money in the stock market.  I'm *NOT* willing to bet my primary home on the market.  I'm also not willing to go without home and car insurance.  If you invest money in the stock market rather than paying off your home you are effectively *betting* your home on the market.   If the market drops 50% or my bank goes out of business, I could lose my home.  It's a small risk, but to me the risk isn't worth it.  I'm willing to take a small loss of income to decrease my risk around losing my primary home.

If I had invested assets worth multiple times my home value, then I'd probably feel differently.  Since I don't, I love the security of knowing that my home is paid for, no matter what happens in the economy.
 

[Radagast]

What you aren't considering is the RISK.

Of course a lot of the controversy comes down to the method of paying it off. If you pay it off by making a multitude of early payments you are unquestionably (100% chance) increasing your risk, while at the same time most likely (like 65% chance) lowering your return, which makes this a terrible decision for all circumstances. If you save until you can pay it off with a single gigantic payment and still have a decent emergency fund, then you are lowering your risk and also lowering your expected return, which is an acceptable tradeoff.

But good job on the rest of the debts :D Nondischargeable student loans are the worst along with high interest rate debt.

[Bloop Bloop]

I hope everyone commenting on how paying off a mortgage is suboptimal is also working in investment banking. Because if you are wasting your time working in any other, financially sub-optimal occupation, you are just setting back your FIRE date by years and years.

[PurpleYogurt]

I thought this thread would be about someone getting rid of credit card debt after discovering MMM. So you prepaid your mortgage instead of investing that money in index funds? I don't think that should be celebrated, sorry.

Well this is a downer. Too bad you couldn't have simply not responded.

I was going to ignore the controversial comments until you posted. Now I'm not. Congrats!

Why are "pay off the mortgage" people like you so sensitive? This isn't even the moderator enforced "safe space" y'all set up as it's own thread for mortgage payoff (Only! Discussion Keep OUT!) or the dedicated "celebrations thread" where one would expect just congratulations rather than discussion.

This is a general, new thread in "face punch central" of a discussion forum focused on efficiently reaching FIRE.

Paying off a low-interest, fixed mortgage is often a sub-optimal strategy for reaching FIRE in the most efficient way.

Are you going to complain next that someone questioned you on your new, leased F350 commuter vehicle you will be driving solo 50 miles a day each way?

Perhaps we should congratulate you on your "Dave Ramsey Approved" high-fee, high cost financial "adviser" because you're investing.

I wasn't being sensitive at all. I didn't feel there was a need to post such a thing in a debt free topic. The OP paid off his mortgage, he wasn't asking for advice or opinion. Your last two sentences don't apply to me, far from it.

So you were going to ignore until you read my brief first post? I take that as being much more "sensitive" than my original post.

[haflander]

Nobody has an issue with you debating these strategies.  It's when a poster shits all over another posters positive thread that it becomes obnoxious and rude.  There are threads for this debate already.  You could even start another one if you want.  Go for it!  But when someone is saying "YAY!!! I'm out of debt" and the first response is "Your stupid (paraphrasing)" - that's just fucking rude.

+1. Thank you.

[I-Ranger]

<rant>This thread in a nutshell:

OP: We just had a baby, and we are absolutely thrilled.

Certain posters: What a terrible decision. Do you know that set you back 6.35248 years on your FIRE date? You'd better not celebrate your terrible judgment. We need to warn others about it so that they don't make the same terrible mistake.

@ReadySetMillionaire and @EngagedToFIRE have already pointed out, in painful detail, the deficiencies of thinking that there is one set definition and path to FIRE. @goalphish2002 didn't start this thread seeking advice. He or she accomplished something that a vast majority of the American public has not attained. We don't know the details or nuances of his or her situation, but that accomplishment is worthy of celebration.</rant>

Life's too short to be acrimonious. Moving on.

This post is just dripping with irony. If you look through this thread, you'll see all the acrimony is coming from the POYM club. RSM erupted into a rage as though someone had just called his/her baby ugly, and the overall collection of names that have been hurled at efree include: jerk, hater, emotional intelligence of a kindergartner, d-bag, debt-loving troll, obnoxious, fucking rude, smug, etc.

The smug part is even more delicious irony-and obvious projection-because i've known a handful people over the years who have paid off their mortgages, and they were all incredibly smug about it, as though they had beaten the system and the rest of us were morons. I think this is why the POYM club reacts so strongly. They get to be all haughty about it in their real lives, but then they come on a forum dedicated to early retirement and instead of the fawning praise, back pats, and jealousy they're used to eliciting, they find that not only are many unimpressed, but that their decision was likely riskier and less efficient-in a word, suboptimal. This is probably why the POYM club demands "no hate", "no discussion", and finds it necessary to set up safe spaces in order to get their ego-stroking fix, which, as evidenced by this thread being created, is still not enough.

Yes, b42 took the personal attacks too far, but the thin-skinned overreactions of the POYM club provided for some hilarious and educational debates, which kept me reading, and darned if I didn't learn a lot about payoff vs. non payoff. 

[ReadySetMillionaire]

This post is just dripping with irony. If you look through this thread, you'll see all the acrimony is coming from the POYM club. RSM erupted into a rage as though someone had just called his/her baby ugly, and the overall collection of names that have been hurled at efree include: jerk, hater, emotional intelligence of a kindergartner, d-bag, debt-loving troll, obnoxious, fucking rude, smug, etc.

The smug part is even more delicious irony-and obvious projection-because i've known a handful people over the years who have paid off their mortgages, and they were all incredibly smug about it, as though they had beaten the system and the rest of us were morons. I think this is why the POYM club reacts so strongly. They get to be all haughty about it in their real lives, but then they come on a forum dedicated to early retirement and instead of the fawning praise, back pats, and jealousy they're used to eliciting, they find that not only are many unimpressed, but that their decision was likely riskier and less efficient-in a word, suboptimal. This is probably why the POYM club demands "no hate", "no discussion", and finds it necessary to set up safe spaces in order to get their ego-stroking fix, which, as evidenced by this thread being created, is still not enough.

Yes, b42 took the personal attacks too far, but the thin-skinned overreactions of the POYM club provided for some hilarious and educational debates, which kept me reading, and darned if I didn't learn a lot about payoff vs. non payoff.

For the 30th time, it's all about time and place.

OP paid off student loan debt, credit card debt, medical debt, vehicle debt, and mortgage debt. To top it off, OP has index funds, a 401k, company stock, and his wife has a teacher's pension. If you cannot see that maybe, just maybe, this isn't the place for a mortgage payoff debate, then sorry, we're done here.

This forum is about encouragement and sharing our own personal journeys to FI. I'm growing incredibly weary of the holier than thou spreadsheet crowd.

[EngagedToFIRE]

This post is just dripping with irony. If you look through this thread, you'll see all the acrimony is coming from the POYM club. RSM erupted into a rage as though someone had just called his/her baby ugly, and the overall collection of names that have been hurled at efree include: jerk, hater, emotional intelligence of a kindergartner, d-bag, debt-loving troll, obnoxious, fucking rude, smug, etc.

The smug part is even more delicious irony-and obvious projection-because i've known a handful people over the years who have paid off their mortgages, and they were all incredibly smug about it, as though they had beaten the system and the rest of us were morons. I think this is why the POYM club reacts so strongly. They get to be all haughty about it in their real lives, but then they come on a forum dedicated to early retirement and instead of the fawning praise, back pats, and jealousy they're used to eliciting, they find that not only are many unimpressed, but that their decision was likely riskier and less efficient-in a word, suboptimal. This is probably why the POYM club demands "no hate", "no discussion", and finds it necessary to set up safe spaces in order to get their ego-stroking fix, which, as evidenced by this thread being created, is still not enough.

Yes, b42 took the personal attacks too far, but the thin-skinned overreactions of the POYM club provided for some hilarious and educational debates, which kept me reading, and darned if I didn't learn a lot about payoff vs. non payoff.

For the 30th time, it's all about time and place.

OP paid off student loan debt, credit card debt, medical debt, vehicle debt, and mortgage debt. To top it off, OP has index funds, a 401k, company stock, and his wife has a teacher's pension. If you cannot see that maybe, just maybe, this isn't the place for a mortgage payoff debate, then sorry, we're done here.

This forum is about encouragement and sharing our own personal journeys to FI. I'm growing incredibly weary of the holier than thou spreadsheet crowd.

Right?  It's as if the whole "time and place" thing just flies right over their head.  Nobody cares about the payoff debate on THIS thread.  I enjoy the discussion and have participated in both the payoff/don't payoff threads accordingly, because it's the right place for it.

Maybe 31 times will get through to these people?  I just want to pay off more mortgages simply to not be part of that crowd, if these are the people that are representing them, yuck.

[BlueHouse]

We paid off our vehicles, student loans, any remaining medical bills, and have no credit card debt.

This is awesome!  This in and of itself is fantastic and you're so far ahead of the average consumer.  But the fact that you've also paid off the mortgage -- the single biggest expense for most people, is a spectacular feat. 

What to do next?  Celebrate!  I've heard about mortgage-burning parties, but I don't know of anyone who has actually had one.  While I wouldn't recommend a big blowout, maybe have a burning with your SO to recognize what a HUGE achievement it is (and then go to the celebratory thread to bask in the congratulations without the hating). 


FYI to others who feel the need to comment on suboptimal strategy:  For me, I have a few more years that I must work for a variety of reasons.  I don't have to earn any more money during those years, I just have to earn my cost of living for the next few years.  In the meantime, I'm already maxing out all tax-advantaged accounts and saving a total of >$140K /year.  After putting $72K into tax-advantaged and another $40 into taxable, I just want another place to put the remaining money and I don't really have any other options than to pump it into my house.  That gives me the added advantage of reducing my annual expense after age 60, and it means that I will have a lower tax burden because I won't have to withdraw as much from my 401k to meet my (reduced) living expenses. 

I've run the numbers a bunch of times and for me, it's close, but paying the (primary) house off early is a winning strategy. 

[YK-Phil]

@goalphish2002 I'm so sorry about what has happened to your celebration thread. What you have achieved is amazing and worthy of being celebrated. Unfortunately that is not going to happen in this thread. It seems to happen a lot on this forum: someone starts an interesting thread, but it goes to shit quickly and there's no way to get it back on track. I wish there was a way to block posters with the emotional IQ of a kindergartner, but there isn't.

Just know that most of us are happy for you.

I guess I'll be another poster with the emotional IQ of a kindergartner, because I think it's great efree is carrying the torch of Boarder (RIP), and doing a service to forum newcomers. I joined about a year ago, and thanks to Boarder and others dishing out facepunches on mortgage payoff celebration threads, I learned that not only does paying off your mortgage early often delay FIRE, it can also be much riskier than having that money in investment accounts should an emergency arise.

It's just strange to see other mortgage payoff proponents circle the wagons so viciously and try to soothe the OP's feelings, which given in the original post the OP admitted it was a divisive topic and that they hadn't followed the order of investing, I doubt the OP was shocked and crushed by efree's response. The defenders lashed out like it was an attack on their choices rather than the OP's.

That said, I'll celebrate the OP's being debt-free and happy, and I'll celebrate efree's honest response.

Because this is a celebratory thread. The OP is debt-free.
If this thread was "I made the wisest decision paying my my mortgage" then people have every right to correct that view.
As someone said, they are many threads out there letting us know that paying off the mortgage is not the best possible decision. You don't need to jump in every mortgage-free celebratory thread and derail it.

Yes, and the OP didn't need to create this thread but he/she did it anyway. Are we allowed to do only the things we need to do? This forum wouldn't exist then.

And by the way, I was not the one who derailed this thread. My post was pretty short and I was careful to keep it respectful. This thread was derailed by those who started attacking me (which is against forum rules, by the way).

And I just want to say that I agree with what Rosy said. If a person has done the math and knows that prepaying the mortgage will likely delay their FIRE one year, two years, or more, and STILL chooses to do it then fine, it's an informed decision and I've got nothing against it. The problem is that very few people have done this even if they say they are "aware" that it's a "mathematically suboptimal" decision. I have trouble understanding how people would say "I am finally free of my mortgage and this will delay my FIRE two years. Let's celebrate it!" on a forum about early retirement.

What? You're still here! I think we all got your message.

Congrats to the OP on this important milestone.

[PurpleYogurt]

The smug part is even more delicious irony-and obvious projection-because i've known a handful people over the years who have paid off their mortgages, and they were all incredibly smug about it, as though they had beaten the system and the rest of us were morons. I think this is why the POYM club reacts so strongly. They get to be all haughty about it in their real lives, but then they come on a forum dedicated to early retirement and instead of the fawning praise, back pats, and jealousy they're used to eliciting, they find that not only are many unimpressed, but that their decision was likely riskier and less efficient-in a word, suboptimal. This is probably why the POYM club demands "no hate", "no discussion", and finds it necessary to set up safe spaces in order to get their ego-stroking fix, which, as evidenced by this thread being created, is still not enough.

This is exactly why I couldn't tell anyone in real life that we paid off the mortgage. I certainly didn't want to be seen as smug, beat the system, everyone else is a moron, haughty, demanding, need ego-stroking and suboptimal. Even though I never thought I'd have a paid off house at my age and was proud of getting it done. Even before we did it, if a dear friend told me they paid off their house, I'd be excited for them. Maybe even start dreaming of what I could do with all the interest and mortgage debt I was paying to the bank over the years.

Perhaps this is also why the OP thought he'd be safe to announce his accomplishment on a forum devoted to financial and early retirement topics.

[I-Ranger]

The smug part is even more delicious irony-and obvious projection-because i've known a handful people over the years who have paid off their mortgages, and they were all incredibly smug about it, as though they had beaten the system and the rest of us were morons. I think this is why the POYM club reacts so strongly. They get to be all haughty about it in their real lives, but then they come on a forum dedicated to early retirement and instead of the fawning praise, back pats, and jealousy they're used to eliciting, they find that not only are many unimpressed, but that their decision was likely riskier and less efficient-in a word, suboptimal. This is probably why the POYM club demands "no hate", "no discussion", and finds it necessary to set up safe spaces in order to get their ego-stroking fix, which, as evidenced by this thread being created, is still not enough.

This is exactly why I couldn't tell anyone in real life that we paid off the mortgage. I certainly didn't want to be seen as smug, beat the system, everyone else is a moron, haughty, demanding, need ego-stroking and suboptimal. Even though I never thought I'd have a paid off house at my age and was proud of getting it done. If a dear friend told me they paid off their house, I'd be excited for them. Maybe even start dreaming of what I could do with all the interest and mortgage debt I was paying to the bank over the years.

Perhaps this is also why the OP thought he'd be safe to announce his accomplishment on a forum devoted to financial and early retirement topics.

Yeah, many of the responders on this thread just congratulated the OP and said they had decided to do the same, no shots at efree taken. I imagine these people are like you and not the smug ones IRL. The smug ones, IMO, are the ones who fly off the handle when someone dares point out POYM is usually suboptimal. They take it personally.

I'm sure there are plenty of people who have paid their mortgage early, but no one knows about it. The reason people know that the smug ones have paid off their mortgage early is... they make sure to tell absolutely everyone about it! :)

[TomTX]

Can you show me where MMM has claimed that a paid off mortgage and being debt free is face punch worthy?

Appeal to authority. Common logical fallacy. Rejected.

[EngagedToFIRE]

Can you show me where MMM has claimed that a paid off mortgage and being debt free is face punch worthy?

Appeal to authority. Common logical fallacy. Rejected.

Right. Gotcha.  It's not as if you referenced MMM principles in the post I responded to and even brought up another finance writer.  Nor are we supposedly on a site discussing MMM principles.  But clearly you have been waiting for the right moment to spring your "Appeal to authority" mantra.  You win the debate!  Congrats!  It's over, you can move on now.

[ReadySetMillionaire]

Yeah, many of the responders on this thread just congratulated the OP and said they had decided to do the same, no shots at efree taken. I imagine these people are like you and not the smug ones IRL. The smug ones, IMO, are the ones who fly off the handle when someone dares point out POYM is usually suboptimal. They take it personally.

I'm sure there are plenty of people who have paid their mortgage early, but no one knows about it. The reason people know that the smug ones have paid off their mortgage early is... they make sure to tell absolutely everyone about it! :)

My own parents don't know that my wife and I paid off our cars, paid off her $90k in student loans, paid off $55k of my student loans this calendar year, that we have $150k in investments, or that we have almost $30k in cash. They also won't know when we pay off our mortgage.

Discussing financial accomplishments in real life is generally taboo. This forum is an outlet to unapologetically celebrate those accomplishments that are usually kept private.

This is why efree and others got the reaction they did. OP expressly stated that he could not tell a lot of people about his accomplishments and wanted to celebrate here. He also acknowledged that the mortgage payoff is debated. And yet people still felt the need to put him down -- "you're still fat."

It was rude, full stop.

I've made my point, repeatedly, so I'm out. Hope the don't pay off your mortgage crowd feels good about not sharing in the joy of OP's accomplishments and putting him down.

[Fishindude]

Congratulations, getting all that debt cleaned up is quite an accomplishment and gives you new freedom.

[BlueHouse]

Yes, b42 took the personal attacks too far, but the thin-skinned overreactions of the POYM club provided for some hilarious and educational debates, which kept me reading, and darned if I didn't learn a lot about payoff vs. non payoff.

This is the part that bothers me.  People who want to kill a celebration then blame the celebrants for being "thin-skinned".   Sir, if you knew the history, you would know that it took YEARS of asking b42 and others to not rain on other people's parades and multiple warnings from mods before they finally said No More. 

If you start a thread specifically to celebrate and then someone comes around and repeatedly, obsessively, annoyingly, and arrogantly tells you how stupid you are, then that person is a troll.  That's all there is to it.  So the mods did there jobs and stopped harassment and trolling.   It's not a "safe-space for snowflakes" as others have described.  It's not a place where opinions are quashed -- you can still have the debate there, you just have to express an opinion and then STFU if someone doesn't want to hear it.  b42 was all about winning and didn't have the intellectual or emotional ability to understand that different people have different situations.   

[TomTX]

Yes, b42 took the personal attacks too far, but the thin-skinned overreactions of the POYM club provided for some hilarious and educational debates, which kept me reading, and darned if I didn't learn a lot about payoff vs. non payoff.

This is the part that bothers me.  People who want to kill a celebration then blame the celebrants for being "thin-skinned".   Sir, if you knew the history, you would know that it took YEARS of asking b42 and others to not rain on other people's parades and multiple warnings from mods before they finally said No More. 

If you start a thread specifically to celebrate and then someone comes around and repeatedly, obsessively, annoyingly, and arrogantly tells you how stupid you are, then that person is a troll.  That's all there is to it.  So the mods did there jobs and stopped harassment and trolling.   It's not a "safe-space for snowflakes" as others have described.  It's not a place where opinions are quashed -- you can still have the debate there, you just have to express an opinion and then STFU if someone doesn't want to hear it.  b42 was all about winning and didn't have the intellectual or emotional ability to understand that different people have different situations.   

Certainly seems like a lot more animosity (repeated whining, told "you can talk, but say it once then Shut The Fuck Up", name calling, etc) coming from the POYM crowd.

Hell, you can't shut up complaining, whining and moaning about a poster who has been gone from the site for quite awhile now.

Again, if it weren't for POYM being jerks in this thread - I would never have joined the conversation.

[CheapScholar]

The problem with the DONT PAYOFF YOUR MORTGAGE crowd is that they often say things like “the math says paying off your mortgage is wrong” or “this person just delayed FIRE by two years”.  Boarder specifically always said the math this and the math that, and said people paying off mortgages were emotional.  But the fact is their math relies on historical averages of the stock market and the 4% rule.  I generally believe in the 4% rule holding up, but one also has to acknowledge it’s not guaranteed and that our modern stock market as we know it only has a century of history at best.  We don’t know what the future holds.  The stock market could have 10 years of negative returns starting today for all we know.  If FIRE relied on withdrawing from something guaranteed like CDs or T Bonds then it would be purely math.  But it’s not purely math when you’re relying on average returns and a stock market that can be influenced by a million variables.

[JohnPV]

Congrats!

I just joined the forums to try and get my financials in order as well.

Good job (:

[TomTX]

Boarder specifically always said the math this and the math that, and said people paying off mortgages were emotional.

LOL. POYM still railing against a long-gone poster instead of the discussion at hand. Poor beat-up strawman, unable to defend himself.

Anyway, OP - I hope that you do enjoy your mortgage-free life.