Various readers:

“Derb—You are not a fool. It’s true that you could borrow against your

house and invest the money somewhere and perhaps make a positive net return

doing so. (Making a greater return on your investment than you are paying in

interest.) But note, the people lending you the money in this scenario

believe the best thing for them to do with their money is lend it to you.”

“The only way I can look at retirement is if I don’t have to pay for

housing. As far as the investment angle goes I can see taking advantage of a

boom in the short term. But, no boom is going to last 30 years.”

“Mr. Derbyshire—I dare say you are, most emphatically, NOT a fool. Here’s

why: reverse mortgages.”

[Derb] Gotta look into that.

“Dear John—As an estate planning attorney, I can assure you that paying

off your mortgage is a very smart move. Especially if you now send that

monthly check to an investment account of some sort. The clients I have

that enter retirement with a mortgage on their homes, are the ones that end

up living hand to mouth.”

“[Quoting that dipwad economist] ‘All that money sitting there, doing

nothing.’ In regards to paying off a house, this demonstrates no

consideration for actual appreciation of the house. Rather a stupid

statement by a financial guy, unless his job is to make you borrow money.”

[Derb] “…unless his job is to make you borrow money…” Could it

possibly be?

“Derb—If you pay $10,000 this year in mortgage interest, you’ll get a tax

break of around $3500, assuming you’re in the top tax bracket. That means

you’re throwing $6500 away. Sounds pretty stupid to me.”

[Derb again] Look, I used to work in securities trading. I know that when

you take out a mortgage, you are hooking on to the end of a long chain of

intermediaries, all writing IOUs to each other, each one snatching a few

golden crumbs from my slice of cake as it passes along the chain from hand

to hand. I realise this helps keep the economy going, and provides lots of

indoor relief for the middle classes, but I’d just rather spend my money on

more tangible things.