That's fine, but not at all the point you were making earlier. You clearly said you would have more to invest by paying off your house. That is mathematically impossible.

Pay off you house in like 4 years then you have more to invest the next 25+ years...its simple

You don't seem to have strong math skills.

Don't pay mortgage put everything in Luna

You do not seem to have strong comprehension skills.

Nah, I've understood your position perfectly. It's not a difficult one to comprehend. What you don't realize is that it's wrong, because of very basic addition and subtraction.

You are missing risk from your equation.

The equation did not ask about expected return. It was how to maximize investable capital.

You said "Pay off the mortgage then you have an insane amount of money to invest.". I pointed out that paying off the mortgage will always result in less money being investable than if you didn't pay off the mortgage.

This post was edited by NetflixAdaptationWidow on May 15 2022 07:39pm

You are missing risk from your equation.

Okay but if he just invests it into a market ETF that mimics the S&P his beta is essentially one and if his risk-free rate is considered his mortgage rate whatever the difference is in the return of the S&P 500 lets say compared to that risk-free rate of 2% (probably got his mortgage at a low rate given the historical rates) is his risk premium.

Sure there's market turbulence right now, but we have historical averages to work with and with very rudimentary math its obvious if he has borrowed cheap money the risk premium of investing into a S&P fund returns more than paying down cheap money.

So unless you're highly risk-adverse in which case you're not going to invest into the market anyway even if you pay down your home or you're open to pulling margin on your investments of which is significantly more risky than debt on a home there's little argument here unless you think you can actually time the market of which historical data again suggests people absolutely cannot.

If anything having cheap money borrowed on a home at such a low rate is a prime period to invest. Essentially 4x leverage on something that has no risk of being margin called at lower than margin rates.

This post was edited by SBD on May 17 2022 08:05am