During challenging economic times, many want control of their finances by paying off liabilities, such as a mortgage. Although there could be instances where it would be productive to pay it off, I often disagree regarding the method. In most cases, I would delay paying off a mortgage if the money is productive elsewhere.
WHY? - Although many say “cash is king” (which is true in the short term), CASH IS RAPIDLY BECOMING TRASH!
THE CAUSE - With our government creating bailout packages left and right, we are quickly losing control of the value of our dollars because they are constantly printing more dollars. Since the dollar is not backed by gold anymore, fiat (paper) dollars lose value more quickly. It’s like adding water to your milk - although you have milk to drink, it doesn’t have quite the quality it had previously. As more dollars are printed, inflation results. As prices increase, we demand our wages to increase. As this inevitable cycle continues, cash becomes trash like it did in Germany and Brazil. Their money became virtually worthless over time!
THE SOLUTION - Why not keep your money secure by productively investing it outside of the home? (Warning - I am not recommending you never pay off your home and/or invest unwisely when it would have been more productively put in the home. However, I am opening your mind to possibilities.) Why not fill the bank’s glass full of watered-down milk rather than your hard-earned, whole milk? Your mortgage balance will not inflate over time, and therefore, become EASIER to pay off as dollars devalue. Put dollars into your home when dollars are worthless and take advantage of superior opportunities NOW!
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