Archive for May, 2011
USA Today titled an article May 16, 2011, by Dennis Cauchon “Americans shed mortgage debt at record pace.” More intriguing is the spin put on it by Nicholas Carroll, a journalist on consumer finance and author of Walk Away From Debt for a Better Future. Carroll says:
“This is a form of economic stimulus that goes to Main Street rather than Wall Street. When freed from a mortgage payment, people’s first purchases tend to be necessities, such as socks and underwear.”
And that flies precisely in the face of what accountants and financial advisors have slathered on home buyers for decades.
- Don’t pay off the house
- You need the tax deduction
- Keep you mortgage and save for your kids’ college
- Other investments return more than does paying off your home
And on, and on, ad nauseum.
But this time, wisdom is coming from Main street, not Wall Street. So it makes sense the “stimulus” goes to Main street, no thanks to local gods, guides or governments.
We’ve been telling you that all along, folks. Though daily I still see people saying these acceleration programs don’t work. I haven’t yet seen one that does not work. Some may work better than others. The one thing that is sure not to work is doing nothing different.
Your greatest security in any economic crisis is owning your own home free and clear. Being mortgage-free and debt-free, and having a place to live, covers your base: shelter. You still need food and water. Generally those are easier to come by in small packages with less expenditure of energy than is a house. Pay off your mortgage as fast as you can. You can probably accomplish that in about a third the time of a conventional mortage. In other words, in 5-10 years.
It’s time being debt free, including your mortgage, gets some respect!