Paying off your mortgage with an interest rate less than inflation is a mathematically verifiable horrible idea. You're short the dollar deeply. Keep that short position for as long as you can because on a long enough horizon you'll be right so long as the Fed continues to manipulate the market.
That doesn't necessarily mean lever up. But it does mean take that extra X% you'd put into your mortgage and place it in some CDs/Bonds/whatever. Or even better, if inflation is still higher than the current rate you could even use it to buy an investment property and then pay that off as slow as possible as well. Let the banks hang themselves being long the dollar!
Debt is only bad when you're losing. The problem is it takes a level of sophistication to understand when you're winning. Hence, the need for Ramsey-type all-or-nothing solutions.
I agree that people generally seem to lack a decent intuitive understanding of risk. They only look at the current state of affairs, and the upside of the bell curve. They don't seem to remember or factor in the likely potential negative side of those distributions and adjust their planning for better resilience.
> Paying off your mortgage with an interest rate less than inflation is a mathematically verifiable horrible idea.
This is often the case, but not always. It also doesn't account for the much better sleep I get at night, or the unshackled feeling I experience knowing I am debt free. There's an enormous psychological benefit that is not easily quantified.
That doesn't necessarily mean lever up. But it does mean take that extra X% you'd put into your mortgage and place it in some CDs/Bonds/whatever. Or even better, if inflation is still higher than the current rate you could even use it to buy an investment property and then pay that off as slow as possible as well. Let the banks hang themselves being long the dollar!
Debt is only bad when you're losing. The problem is it takes a level of sophistication to understand when you're winning. Hence, the need for Ramsey-type all-or-nothing solutions.