I'm paying off my mortgage. Stupid idea? Here’s why I’m doing it
Property taxes buying another property in California is outrageous. No home would be cheaper than my current home. The home I’m paying off I’ve had for many years and was a low priced home. If I sell it, I’m resetting my property taxes to a much higher rate due to real estate prices being ridiculous right now
Ray Dalio and Buffet say the overall economy returns could be flat for the next three years or longer. Right or wrong, this simply plays into predicted risk on returns of buying stocks or paying off my mortgage. Neither answer will “lose” me money. It’s win-win, just which win is going to be larger.
location, location, location. It seems current property sellers have NOT realized rent control has an influence on their property selling price. I’m not going to purchase a home hundreds of miles in the middle of nowhere to get a return, which is what “real estate investors” are doing right now.
I don’t believe in the current market (This is all personal. I’m simply not seeing “skill”, timing, saving, or hard effort going into buying an investment to make money. It just feels like 2008 where everyone is an investor again and all the recommendations to “invest in REITS” is popular again.
In the current market, “popular finance personalities” are saying to purchase homes further outside the city center. These people are literally telling you to give up happiness for a commute and time in a car in order to own a home within your budget. Talk about non-sense. Owning a home isn’t smart, stupid, a dream, or anything like that. It’s a mathematical equation.
I’m going to try and time the market. (I know, losing idea) I believe the stock market is going to cool over the next 2-3 years. In that time I don’t believe the stock market is going to return 7%, which means my cash is better used paying down my 4% mortgage.
I can build back up a cash position to put into the stock market over the next 2-3 years. I don’t feel a rush to put cash in the market if I’m able to guarantee a 4% return paying off my mortgage.
My GUT says play it safe right now. My GUT told me to buy the cheapest home on the block and it has always kept me stress free. Now without a mortgage, I’m going to buy a little more financial security. I grew up poor and obviously owning my home outright will help me feel secure enough to take bigger risks with my career and entrepreneurship, which will produce returns far greater than the stock market or home ownership mortgage interest savings will over 30 years.
If you want to play a game of leverage in real estate recognize what your skillset is. My skills are cyber security, leadership, and business. It’s not managing tenants thousands of miles away. Earning 10% per property. I make my money by being the top cloud security engineer in the world. The more time I spend studying, implementing, and researching cyber attack and defense methods the greater my contribution is to the world.
I want to build a company. In order to start a company, having as little financial obligations as possible is critical. Knowing I can take the risk of starting a company and slogging along at a low pay will not break me.